Agenda packet — City Council and Authorities Concurrent, June 6, 2023 (part 7 of 8)

• The temporary use of the parking lot for an event site does not involve physical changes or improvements to the property or surrounding neighborhood, and the site will be returned to its prior condition after conclusion of the temporary use.

(4) The facility will not impair the integrity or character of the zoning district in that:

• The proposed use is compatible with the General Plan land use designation of Community Mixed Use and zoning designation of Downtown Commercial (CD). The project will allow the American Legion to host their annual car show event over a two-year time period and is subject to conditions to preserve the integrity of the zoning district in which the property is located.

(5) The facility will not create a significant increase in the traffic to and from the premises or in the on- street parking within five hundred (500) feet in that:

• While the event is open to the public their will not be a significant increase in traffic or parking impacts, as there will still be parking available in the immediate are on-street.

APPROVED SUBJECT TO THE FOLLOWING CONDITIONS:

1. The Special Permit will be for two occurrences of an annual car show, one on June 10, 2023 and one date to be determined in 2024;

2. The applicant shall provide Planning Division staff the date of the intended 2024 car show a minimum of 30 days in advance of the event.

3. The applicant shall comply with all Zoning Ordinance regulations regarding temporary and permanent structures and obtain all necessary Building and/or Fire Department permits;

4. If proposed, the applicant shall obtain an amplified music permit and shall comply with City Code Section 9.10.040, noise and sound regulation;

5. The applicant shall obtain temporary sign permits for all temporary signs advertising events;

6. The applicant shall comply with Fire Department directives and requirements;

7. There shall be no “searchlight” beams, streamers, or roof-mounted balloons during the term of this Special Permit;

8. This permit is subject to revocation by the Planning Division for violation of any of its conditions of approval, and;

9. At the conclusion of the event, the parking lot shall be cleaned and returned to its prior condition.

Approved:

_____________________________ Dated: June 6, 2023
Andrew Crabtree
Director of Community Development

I:\PLANNING\2023\Project Files Active\PLN23-00030 2700 Mission College Blvd (Special Permit)\Special Permit.doc 9?8 Homestead Rd - Google Maps
Go gle Maps 958 Homestead Rd
Install Type 3 Barricades within parking lot
at driveway to close access from
Homestead Road if parking lot will be
closed to public parking . Do not install
barricades on sidewalk.

Imagery ©2018 CNES / Airbus, DigitalGlobe, U.S. Geological Survey, Map data ©2018 Google 50 ft 958 Homestead Rd
Santa Clara, CA 95050
https:/ /www.google.com/maps/place/95 8+Homestead+ Rd, +Santa+Clara, +CA +95050/@3 7. .. . 5/112018 9S.8 Homestead Rd - Google Maps
Go gle Maps 958 Homestead Rd
958 Homestead Rd
Santa Clara, CA 95050

Page 1 ends

Map data ©2018 Google 20 ft
https://www.google.com/maps/place/958+Homestead+Rd, +Santa+Clara, +cA+95050/@37.... 5/1/2018 City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-530 Agenda Date: 6/6/2023

REPORT TO COUNCIL

SUBJECT
Informational Report Regarding Bi-Annual Project Status Report of the GIS Services Program

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
The City has made significant progress in establishing an enterprise GIS program. On October 29, 2019, Arini Geographics was awarded a contract for Enterprise GIS Consulting Services. The contract was awarded as a three-year professional services agreement for the initial term of the contract, with an additional two-year term. We are in year one of the two-year term. Council has requested a bi-annual project status report of GIS services. The current reporting period is November 2022 to April 2023.

DISCUSSION
With location a common attribute across numerous city services and assets, the City’s Enterprise GIS Program is a framework of people, process and technology enabling geospatial and asset information across departments managed in a single system. Integrating this information and making it available to staff and the public enables operational effectiveness, data driven decision making, cross departmental and regional coordination, citizen engagement and transparency.

Efforts are focused on (1) projects and (2) day-to-day operations as below.

Projects - Accomplishments during this reporting timeframe are noted with narratives following the table below:

Project Current Reporting
Period Nov 2022-
April 2023
Next Reporting
Period May 2023-
Nov 2023
Arbor Day Celebration Tree Mapping App Complete
Enterprise GIS Governance & Stakeholder
Engagement - infoMap Users Support Group
Complete
Sewer Video Inspection Integration Complete
Stadium Common Operational Picture Upgrade In Progress* Completion Planned 2024
GIS-Based Pipeline Map Books In Progress Completion Planned 2024
Water Lateral Data Collection In Progress Completion Planned Parkways and Boulevards Asset Management Completion Planned Parcel Document Access via infoMap Initiate
SVP 20-Year Load Impact Estimate Initiate
Web Map Viewer Upgrade: infoMap 4.0 Initiate
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Project Current Reporting
Period Nov 2022-
April 2023
Next Reporting
Period May 2023-
Nov 2023
Arbor Day Celebration Tree Mapping App Complete
Enterprise GIS Governance & Stakeholder
Engagement - infoMap Users Support Group
Complete
Sewer Video Inspection Integration Complete
Stadium Common Operational Picture Upgrade In Progress* Completion Planned 2024
GIS-Based Pipeline Map Books In Progress Completion Planned 2024
Water Lateral Data Collection In Progress Completion Planned Parkways and Boulevards Asset Management Completion Planned Parcel Document Access via infoMap Initiate
SVP 20-Year Load Impact Estimate Initiate
Web Map Viewer Upgrade: infoMap 4.0 Initiate
*Continued from the last period
· Earth Day and Arbor Day Celebration Tree Mapping App: To support the Arbor Day Celebration held by the city, an interactive tool was created to introduce schoolchildren to mapping technology. Using ArcGIS Online and the ArcGIS Field Maps mobile app, we allowed the young event attendees to map trees in Santa Clara’s Central Park. Staff led groups of school children in a tree mapping exercise. Over 200 local school children from 5 local schools participated in the event.
· Enterprise GIS Governance - infoMap User Support Group: Created an internal cross departmental infoMap User Group. infoMap, is the City’s internal web map viewer. These monthly meetings allow the GIS team to educate and communicate directly with users citywide, collecting improvement suggestions and tracking reported issues. This group allows users to collaborate and request new datasets and for the GIS team to communicate upgrades and new features.
· Sewer Video Inspection System Integration (ITpipes): Per request from the Water and Sewer Department, the Sewer Video Inspection System was integrated into Enterprise GIS. By adding maps and data to the mobile pipeline inspection management system, Water and Sewer can now track progress of the inspections and proactively locate areas of improvement, enabling informed preventative maintenance. The ITpipes application has been upgraded to take full advantage of this GIS integration.

Projects In Progress
· Complete the Upgrade to the Stadium Common Operational Picture: The COP is a comprehensive real-time web-based application providing multi agency coordination and a shared view of stadium operations. This reduces response times, improves situational awareness, and enhances overall coordination. The GIS team provides live situational awareness critical to public safety for events at Levi’s Stadium. This upgrade effort started in August 2021 to align with enterprise GIS technology upgrades completed last year and will continue to completion through the 2023 - 2024 NFL Season. These efforts will also help prepare the public safety response for the upcoming major events based on the city’s successful use of the COP during Super Bowl 50.
· GIS-Based Utility Pipeline Map Books: To improve the timeliness, quality and upkeep of GIS data and pipeline utility network models and asset inventories, managed by the Water & Sewer Department (WSD). Currently the map books are updated manually in AutoCAD. WSD requested the IT department to provide GIS-based production of printed map books used by field crews and engineers to maintain assets or construct new assets. Replacing the current CAD-based City of Santa Clara Printed on 6/2/2023Page 2 of 5
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production process with GIS will make for more accurate datasets as asset updates are captured faster, reduce duplication of effort, and ensure that printed map books are closer to the digital representation use by field inspection teams. Phase 1, the update of the Sanitary Sewer System data, is due to be completed in the next reporting period. · Water Service Lateral Data Collection: to fulfill a federal EPA mandate for the Water and Sewer Department to collect information on lead-based service lines within the city-maintained water system. WSD Department reached out to IT team to create a GIS based data collection application that will support field teams to input and record the required data at the water meters and service connection line, using mobile devices, which connect to a cloud-based GIS database. This will allow the Water and Sewer Department to efficiently collect and submit the data to the federal government. The development of the mobile app has been completed with feedback from the Water and Sewer Department. Launch is planned in the next reporting period including technical assistance and data collection progress tracking.

Planned projects over the next six months
· Parkways and Boulevards Asset Management: Working with the Department of Public Works Streets Division, this initiative will catalog all boulevard islands and parkways in the City. Over 300 features will be digitized and made available for workorder generation through enterprise asset management. This allows the Streets Division to track all work performed on each feature and tally the cost of all maintenance activities for these city-owned assets. This project is targeted for completion in 2023.
· Parcel Document Access via infoMap: To enable quick location-based access to documents related to City current and historical parcels through infoMap leading to significant City staff productivity gains and better customer service. Per request from the Community Development Division, an integration will be implemented between infoMap and the Electronic Document Management System (Laserfiche) repository where City documents are stored. This integration will provide access to documents which reside in Laserfiche but are not available through the city’s online permitting portal.
· Silicon Valley Power 20-Year Load Impact Estimate: Through geospatial analysis, this proposed project is anticipated to produce a better estimation of the potential energy consumption at the individual parcel level.
· Web Map Viewer Upgrade infoMap 4.0: infoMap, the City’s internal web map viewer, allows for easy web-based access to all GIS data layers and contains a one-click analysis tools that generates mailing lists, locate addresses, and parcels, in addition to creating property reports containing all city data for each home in Santa Clara. This upgrade will ensure that this access is maintained and continues to function efficiently and smoothly.

Day-to-Day Operations
By maintaining and improving data for most city departments into one centralized database known as the Enterprise Geospatial Repository (EGR), the GIS team supports critical City workflows and daily data-based decision-making. The EGR is the system of record for geolocated assets, supporting public safety, utilities operations, community development, parks maintenance, capital investments, City of Santa Clara Printed on 6/2/2023Page 3 of 5
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and public outreach. It is currently comprised of over 280 diverse layers of geospatial and attribute information, covering the city and beyond. Layers include but are not limited to pipeline utilities, trees, public safety, city facilities, General Plan, parks assets and more.

City Enterprise GIS Basemap - The core of the EGR, the Enterprise GIS Basemap is the City’s foundational map data layers (including but not limited to addresses, streets, parcels, ownership, general plan and zoning designations, multiyear aerial imagery and key-related attributes). These layers make daily city business possible, from building permits to field work orders to environmental compliance and sustainability to core public safety activities such as 911 calls.

Statistics and information related to Enterprise GIS activities can be found in the infographic below (Attachment 1), indicating Enterprise GIS Basemap updates since October 16, 2022, records count in the EGR by department, as well as infoMap usage statistics by functionality.

System Updates and Data - critical system updates are continually being performed in several areas, listed below.
· MapSantaClara : A web-based application providing tailored access and reporting functionality to the public (<https://map.santaclaraca.gov/>). This popular app received over 20,000 visits over the current reporting period offering insights to the public on GIS related data. The property report and census data workflows were updated during this reporting period. · Open Data Geospatial Portal : A web-based repository providing public access to GIS datasets, the Open Data Portal benefits the community by providing access to important datasets for mapping, analysis and reporting (https://public-gis-missioncity.opendata.arcgis.com/ ). In this
reporting period, data was updated to match current records, including commonly requested data such as parcels, addresses, zoning codes, and streets.
· Story Maps: Specialized web-based GIS interactive maps that facilitate information dissemination and increase the level of service to the public, including Development Projects ( <http://santaclaraca.gov/devprojects>
) and Live Traffic Cameras (
<http://santaclaraca.gov/trafficcam>). Partnering with the Comms Team and Community Development Department, the Development Projects application was updated to showcase how the city is growing. In addition, the Live Traffic Cameras story map, having been successfully operational for the past decade, has a refreshed application architecture in support of live public camera access and reliability.
· Public Safety: GIS integrations and dedicated datasets are in place supporting the Police and Fire Departments, and are being maintained with regularity, including map data for the Computer Aided Dispatch (CAD) system and police mobile data computers (MDCs). The GIS team supports GPS functionality built into every response vehicle, as well as the central command capabilities for events at Levi’s Stadium and around the city.
· Enterprise Permitting: GIS integration with the Enterprise Permit Management System provides location validation for over 500,000 existing permit records. Using web map data services, Basemap datasets are available for search to confirm the status of addresses and parcels where citizens require permits to build or modify their homes and businesses.

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· Enterprise Asset Management (EAM) : New assets continue to be mapped and added to the EAM Program, including boulevard islands, which will allow work orders to be assigned to these City areas and maintenance activities to be tracked. This in turn works to enhance preventative maintenance efforts, in addition to keeping the city clean. · Regional GIS Collaboration and Coordination : Collaboration with neighboring cities, the County of Santa Clara, and other government agencies to ensure regional timely and quality data acquisition and sharing. Through an ongoing agreement, the City receives fresh annual high- resolution aerial imagery, which is the foundational GIS layer for the City Basemap. · Steady State GIS: Fulfilled numerous requests from departments, including the Council Districts boundary update; printable wall maps of Police Beats to aid new officers during their training, orientation, operations, and reporting; analysis and map of available undeveloped City-owned properties North of US 101; map of citywide permitted accessory dwelling units; geospatial and property ownership data request to aid the Housing Element Update program; and General Plan Amendment updates.

ENVIRONMENTAL REVIEW
This is an informational report only and no action is being taken by the City Council, and no environmental review under the California Environmental Quality Act (“CEQA”) is required.

FISCAL IMPACT
There is no cost to the City associated with this report other than administrative time and expense.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

RECOMMENDATION
Note and file the Informational Report regarding the Bi-annual Project Status Report of the GIS Services Program.

Reviewed by: Gaurav Garg, Director of Information Technology/CIO Approved by: Jōvan D. Grogan, City Manager

ATTACHMENTS

1. Infographic - Enterprise Geospatial Program Activity City of Santa Clara Printed on 6/2/2023Page 5 of 5
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November 1,2022 - April 15, 2023
0 5,000 10,000 20,000 30,000 40,000

FREQUENCY
Search by Address
Other
Create Custom Radius
Find an Intersection
Conflict of Interest
Search by Owner
COI - Planning
Select Addresses
Multi-Address Radius
Select Parcels
Create a Radius
Multiple APN Radius
Workflow
InfoMap Usage by Functionality
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000

FREQUENCY
Create a Report
Search by Address
Print a Map
Search by Parcel
Find an Intersection
Register a Camera
Permit Reports
Other
Workflow
MapSantaClara Usage by Functionality
0 500,000 1,000,000 1,500,000
Community Development
Public Safety
Water and Sewer
Police
Streets
Business System Integration
Parks and Recreation
Fire
Silicon Valley Power
Citywide
EGR Record Count by Department
2,761 Address Updates
Addresses Updated
InfoMap (http://infomap.santaclaraca.gov/) provides City Staff easy access to up-to-date and accurate GIS data, and printable maps and reports. These services and their supporting data facilitate operations in land records, public works, fire services, emergency management, law enforcement, planning and development, elections, health and human services, and many others.

MapSantaClara (https://map.santaclaraca.gov/), an
interactive city map, provides the City’s residents, businesses, and developers with quick access to information about Santa Clara.

Enterprise Geospatial Repository
Enterprise Geospatial Program Activity
The number of addresses updated represents address points that have been edited. An edit includes when an address is newly created, repositioned, or has an attribute change. This value is dependent on requests from stakeholders.
:

I
• I
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-601 Agenda Date: 6/6/2023

REPORT TO STADIUM AUTHORITY BOARD

SUBJECT
Action on Stadium Authority Bills and Claims for the Month of April 2023

BOARD PILLARS
Enhance Community Engagement and Transparency
Ensure Compliance with Measure J and Manage Levi’s Stadium

BACKGROUND
Disbursements made by the Stadium Authority are based on invoices submitted for payment. Prior to payment, staff reviews all disbursement documents to ensure that the invoiced goods or services have been provided.

The Bills and Claims listing represents the cash disbursements required of normal and usual operations during April 2023. Budget control is set by the Stadium Authority Board through the budget adoption process.

DISCUSSION
Effective August 31, 2022, the Stadium Authority and Stadium Manager agreed to the timely payment of Shared Stadium Expenses and other budgeted expenses in accordance with the Annual Stadium Authority Budget, except for buffet expenses invoiced pursuant to Section 4.6.1 of the Stadium Lease. The Stadium Authority maintains the right to confirm and dispute submitted charges from the 2021-22 fiscal year and subsequent years during a fiscal-year-end reconciliation/true-up. This is primarily done to address any concerns regarding improper allocation, calculation, lack of support, or failure to comply with applicable contracts or laws, among other reasons. The Stadium Authority may raise such questions with respect to any charge at any time before a fiscal year-end reconciliation/true-up and the Stadium Manager must assess and respond to such questions in good faith.

At its March 7, 2023 meeting, the Stadium Authority Board adopted the Santa Clara Stadium Authority Fiscal Year 2023-24 Operating, Debt Service, and Capital Budget which runs from April 1, 2023 to March 31, 2024. Expenses paid in April 2023 include:
· Payments totaling $141,875.53 to the City of Santa Clara for reimbursement of General and Administrative (G&A) City payroll costs (e.g.: Executive Director’s Office (City Manager’s Office), Counsel’s Office (City Attorney’s Office), and Treasurer’s Office (Finance Department)) · Payment totaling $1,381,156.04 to Forty Niners Stadium Management Co, LLC for April 2023 Stadium Manager Expenses
· Payment totaling $20,844,381.00 to Stadium Funding Trust for Term A Loan - Principal & Interest
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· Payment totaling $105,432.27 to Cupertino Electric for CapEx Project - Distribution - High Voltage (PMSGT, Battery & 12KV Main Circuit Breakers)
· Payment totaling $8,542.33 to Dell Marketing L.P. for CapEx Project - IT: Replacement of end- of-life end User Equipment
· Payment totaling $389,291.00 to Devcon Construction, Inc for CapEx Project - New Seating (Bowl Padded Seat Replacement)
· Payment totaling $58,840.45 to EyeP Solutions, Inc for the following:
o $15,500.00 for CapEx Project - Software Upgrade to Genetec 5.8 o $41,486.66 for CapEx Project - Bowl Camera Upgrade/Refurbishment o $1,853.79 for CapEx Project - License Plate Reader at Vehicle Entry Gates · Payment to Hanson Bridgett LLP for Legal Services (March 2023) · Payment totaling $4,863.99 to InTWO, Inc for FMS Monthly Services (March 2023) · Payment totaling $17,519.75 to M. Arthur Gensler Jr. & Associates, Inc for the following:
o $1,710.00 for CapEx Project - Smoke Evacuation System - Fire Smoke Curtain Replacement
o $1,925.00 for CapEx Project - Overhead Doors, Motors, Sensors, and Track Replacements
o $13,884.75 for CapEx Project - Concrete Replacements
· Payment totaling $1,319.76 to Pivot Interiors for an Office Chair (SCSA)

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.

FISCAL IMPACT
The fiscal impact to the Stadium Authority is itemized above.

COORDINATION
This report has been coordinated with the Stadium Authority Counsel’s Office.

RECOMMENDATION
Approve the list of Stadium Authority Bills and Claims for April 2023.

Reviewed by: Kenn Lee, Treasurer
Approved by: Jōvan D. Grogan, Executive Director
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23-601 Agenda Date: 6/6/2023

ATTACHMENTS

1. April 2023 SCSA Bills and Claims
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Payment Date Vendor Invoice No. Description Fund Amount 4/17/2023 Bank of America N/A March 2023 Bank Fees (Account 0444) CapEx 1,613.84 4/17/2023 Bank of America N/A March 2023 Bank Fees (Account 0425) Operating 323.68 1,937.52
4/19/2023 City of Santa Clara N/A B2306 SCSA Admin Payroll Costs Operating 78,260.99 4/28/2023 City of Santa Clara N/A B2307 SCSA Admin Payroll Costs Operating 63,614.54 141,875.53
4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Security Operating 119,983.70 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Stadium Ops Operating 348,892.49 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Engineering Operating 206,615.90 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Guest Services Operating 49,481.86 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Groundskeeping Operating 49,879.59 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - SBL Sales & Service Operating 179,299.00 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Insurance Operating 69,787.22 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Utilities Operating 247,842.84 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Use of StadCo TI Operating 538.22 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Naming Rights Operating 46,808.74 4/3/2023 Forty Niners Stadium Management Co, LLC SLS-23967 April 2023 Stadium Manager Expenses - Other G&A Operating 62,026.48 1,381,156.04
4/15/2023 Stadium Funding Trust N/A Term A Loan - Principal & Interest Debt Service 20,844,381.00 4/12/2023 Cupertino Electric 90081 CapEx Project - Distribution - High Voltage (PMSGT, Battery & 12KV Main Circuit Breakers) CapEx 50,974.20 4/12/2023 Cupertino Electric 91683 CapEx Project - Distribution - High Voltage (PMSGT, Battery & 12KV Main Circuit Breakers) CapEx 54,458.07 105,432.27
4/18/2023 Dell Marketing L.P. 10647699784 CapEx Project - IT: Replacement of end-of-life end User Equipment CapEx 1,556.47 4/18/2023 Dell Marketing L.P. 10653785166 CapEx Project - IT: Replacement of end-of-life end User Equipment CapEx 6,985.86 8,542.33
4/10/2023 Devcon Construction, Inc 87899 CapEx Project - New Seating (Bowl Padded Seat Replacement) CapEx 389,291.00 4/10/2023 EyeP Solutions, Inc 23-83 CapEx Project - Software Upgrade to Genetec 5.8 CapEx 15,500.00 4/10/2023 EyeP Solutions, Inc 23-84 CapEx Project - Bowl Camera Upgrade/Refurbishment CapEx 41,486.66 4/10/2023 EyeP Solutions, Inc 23-114 CapEx Project - License Plate Reader at Vehicle Entry Gates CapEx 1,853.79 58,840.45
4/28/2023 Hanson Bridgett LLP 1344905 March 2023 Legal Services Operating 4/18/2023 InTWO, Inc 29978 FMS Monthly Services (March 2023) Operating 4,863.99 4/10/2023 M. Arthur Gensler Jr. & Associates, Inc 1051368 CapEx Project - Smoke Evacuation System - Fire Smoke Curtain Replacement CapEx 1,140.00 4/10/2023 M. Arthur Gensler Jr. & Associates, Inc 1054617 CapEx Project - Smoke Evacuation System - Fire Smoke Curtain Replacement CapEx 570.00 4/10/2023 M. Arthur Gensler Jr. & Associates, Inc 1051369 CapEx Project - Overhead Doors, Motors, Sensors, and Track Replacements CapEx 1,400.00 4/10/2023 M. Arthur Gensler Jr. & Associates, Inc 1054621 CapEx Project - Overhead Doors, Motors, Sensors, and Track Replacements CapEx 525.00 4/10/2023 M. Arthur Gensler Jr. & Associates, Inc 1054625 CapEx Project - Concrete Replacements CapEx 13,884.75 17,519.75
4/10/2023 Pivot Interiors PJIN-000083755 Office Chair (SCSA) Operating 1,319.76 April 2023 Total

Santa Clara Stadium Authority
Bills and Claims
Expenses Paid by Wire or ACH Transfer
For the Month of April 2023

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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-206 Agenda Date: 6/6/2023

REPORT TO COUNCIL

SUBJECT
Public Hearing: Adoption of a Resolution Approving the Levy of Benefit Assessment upon the City of Santa Clara Parking Maintenance District No. 122 - Franklin Square

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
Parking Maintenance District No. 122 (PMD 122) was formed in 1965 for the parking lots, arcades, fountains, sidewalks, landscaping, irrigation, lights, and utilities within Franklin Square, which is bounded by Benton Street, Homestead Road (formerly known as Liberty Street), Monroe Street, and Jackson Street. From 1965 - 2002, the cost of maintenance and operation of PMD 122 was divided between the City and property owners. There have been several changes in how maintenance and operation costs have been collected over the years and in 2002 the City Council passed a motion at a public hearing in which the City assumed all future costs for operation and maintenance and in May 2003 adopted Resolution 7026. Under the collection method contained in Resolution 7026, the property owners contribute annually to pay for capital repairs of the parking lot and associated walkways. The fixed annual contribution from the property owners totals $14,200, less the earned interest on the accumulating balance. The City, through the General Fund, is responsible for covering the costs for annual maintenance and operations of PMD 122 and that has continued to be the arrangement through the present day.

On April 18, 2023, Council adopted a Resolution of Intention (Resolution No. 23-9217) related to the proposed maintenance assessments for PMD 122. In addition, the Resolution established June 6, 2023 as the date that City Council would hear testimony and act upon the attached Resolution (Attachment 1) and Director’s Report (Attachment 2).

DISCUSSION
The proposed FY 2023/24 assessment to property owners will be $12,019. Per the terms of PMD 122, accrued interest earned in FY 2021/22 in the amount of $2,181 will be used to reach the $14,200 annual requirement. These funds are placed into an account that generates interest income and are used to pay for capital repair projects as needs arise. At the end of FY 2021/22 the interest- bearing account contained $156,961.

The final recommended operating budget is $136,990 for FY 2023/24, which is $531 less than the FY 2022/23 expenditure budget, primarily due to a small decrease to interfund services which includes overhead. The operating budget includes funding for routine maintenance and operation performed by the Department of Public Works as well as contractors, which is all funded by the General Fund.

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are no proposed Capital outlay expenditures to cover maintenance and improvements of parking lots and associated walkways in FY 2023/24. Both parking lots at the complex were resurfaced and striped during the summer of 2019. The work was funded by previously collected property owner assessments.

Proposition 218 requires that written ballots be sent and returned if there are proposed increases greater than any previously approved assessments. Since the proposed assessments of $12,019 ($14,200 minus $2,181 in interest) for FY 2023/24 are less than the greatest previously approved assessments, no ballots and approvals are required from the property owners. Therefore, staff recommends overruling any protests if received. The assessments to the property owners cannot be sent out until the Director’s Report is approved at a public hearing.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.

FISCAL IMPACT
Approval of the assessment maintains the funding source for future capital repairs to parking lots and walkways located within Franklin Square. The City’s General Fund remains as the funding source for routine maintenance and operating costs for the Downtown Parking Maintenance District. The total proposed FY 2023/24 expenditure budget for Parking Maintenance District No. 122 is $136,990.

COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.

On May 24, 2023, the Notice of Public Hearing for the June 6, 2023 Council meeting was published in the Santa Clara Weekly. In addition, the notice was posted at the City Clerk’s Office, as well as at the public information desk at each City of Santa Clara public library and mailed to all property owners within the District.

ALTERNATIVES

1. Adopt a Resolution approving the levy of benefit assessment upon the City of Santa Clara Parking Maintenance District No. 122 and approving, confirming, and adopting the Director’s Report for FY 2023/24.

2. Do not adopt a Resolution to move forward with collecting the property owner assessments for FY 2023/24.

City of Santa Clara Printed on 6/2/2023Page 2 of 3
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23-206 Agenda Date: 6/6/2023

RECOMMENDATION
Alternative 1: Adopt a Resolution approving the levy of benefit assessment upon the City of Santa Clara Parking Maintenance District No. 122 and approving, confirming, and adopting the Director’s Report for FY 2023/24.

Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jōvan D. Grogan, City Manager

ATTACHMENTS

1. Resolution

2. Director’s Report FY 2023/24

3. Notice of Public Hearing
City of Santa Clara Printed on 6/2/2023Page 3 of 3
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Resolution/PMD 122 Resolution Page 1 of 6
Rev: 11/22/17
RESOLUTION NO. _____

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA

APPROVING THE LEVY OF BENEFIT ASSESSMENT UPON THE

CITY OF SANTA CLARA PARKING MAINTENANCE DISTRICT
NO. 122 AND APPROVING, CONFIRMING AND ADOPTING
DIRECTOR’S REPORT FOR FISCAL YEAR 20 23/24

BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, pursuant to Chapter 16.10, Article VI, Sections 16.10.490 and 16.10.500 of the Santa Clara City Code (“City Code”), on May 6, 2003, Council adopted Resolution No. 7026, “A Resolution of Intention to Order that the Alternative Method for the Levy of Benefit Assessment be made Applicable to City of Santa Clara Parking Maintenance District No. 122, Providing for Notice of Hearing Thereon, Approving Director's Report and Providing for Notice of Hearing on Director's Report;”
WHEREAS, the Council did declare in Resolution No. 23-9217 its intention to order that the amount necessary to pay the costs and expenses of the maintenance and operation of the public automobile parking places, covered pedestrian lanes and walkways, fountains and landscaping in the District be raised by an annual special benefit assessment apportioned according to benefits among the several lots or parcels of property within the City of Santa Clara Parking Maintenance District (“District”) in accordance with the formula therefore, and more particularly set forth in the Resolution of Intention in accordance with and pursuant to the City Code;
WHEREAS, notice of hearing any and all protests in relation to the levy of benef it assessments and the formula and Report was given by causing a copy of the Resolution of Intention to be duly posted, published and mailed in the time, form and manner provided by in the Code all as more particularly appears from the certificates and aff idavits thereof on file in the office of the City Clerk; whereupon the hearing thereon was duly and regularly held at the time and plac e advertised in the Resolution of Intention;
WHEREAS, pursuant to Sections 10107 and 10108 of Chapter 2, Division 12 of t he Streets and Resolution/PMD 122 Resolution Page 2 of 6
Rev: 11/22/17
Highways Code of the State of California, and Chapter 26 of Part 3 of Division 7 of said Code, all as provided in Chapter 16.10 of the Code of the City of Santa Clara, on the 30th day of March, 1965, this Council adopted its Resolution No. 1581 , a Resolution creating "City of Santa Clara Parking Maintenance District No. 122" (“Parking Maintenance District”) in the City for the purpose of paying the costs and expenses of acquiring, constructing, reconstructing, installing, extending, enlarging, repairing, improving, maintaining and operati ng public automobile parking places, covered pedestrian lanes and walkways, fountains, and landscaping therein then existing or thereafter to be constructed in and for the Parking Maintenance District, and of benefit to said maintenance district, but not of benefit to the City of Santa Clara as a whole, including the cost of necessary repairs, replacements, water, fuel, power, gas, electric current, care, supervision and any and all other items necessary for the proper maintenance and operation thereof, and all additions, improvements and enlargements thereto which may thereafter be made;
WHEREAS, said proceedings provided that this Council shall, in addition to all other taxes, annually fix and levy a special assessment tax upon the real property (land and improvements) within the Parking Maintenance District as therein provided, sufficient to raise a determined amount of money to pay all or part of said costs of maintenance and operation; WHEREAS, the Director of Public Works (“Director”) did cause a written report (“Report”) to be prepared and filed with the City Clerk of the City, which provides the basis for the levy of benefit assessments for the cost and expenses of maintenance and operation on all lots or parcels of property within the District which the Report sets forth the amounts to be provided in the budget for maintenance and operation, a description of each lot or parcel of property by a legal description, assessor's parcel number or other descri ption sufficient to identify the same, and the amount of the assessment to be levied for the fiscal year 2022/23 against each lot or parcel of property;
WHEREAS, Proposition 218 passed on November 5, 1996, added Articles XIIIC and XIIID to Resolution/PMD 122 Resolution Page 3 of 6
Rev: 11/22/17
the State of California Constitution which requires the property owners within a Maintenance District to approve the continuation of the Maintenance District, and annually approve any increase in assessments. On June 24, 1997, a sufficient vote of ballots was received as revised in order to approve the continuation of the Maintenance District; WHEREAS, procedures of approval require the preparation of a report on how the assessments were prepared and based, but this year a written ballot need not be returned to the Direct or’s Office in order to determine the approval of the proposed assessment for the Maintenance District because this year’s assessment is not greater than the greatest previously approved assessment amount;
WHEREAS, persons interested, objecting thereto, filed written protests with the Director at or before the time set for hearing, and all persons interested, desiring to be heard were given an opportunity to be heard and all matters and things pertaining thereto were fully heard and considered by the Council;
WHEREAS, the Council has remedied and corrected any errors or informalities in the Dire ctor's Report and has revised and corrected any of the acts or determinations of the various City officials as contained therein, and is fully informed of the contents; and, WHEREAS, said Council is fully informed in the matter.

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That a weighted vote, based on the assessment to each property, was not needed to approve the proposed annual assessments for said District because this year’s assessment is less than the greatest previously approved assessment.

2. That all written protests, objections and other written communications regarding the amount of the assessment, the formula for the assessment levy, and the Director’s Report were read at a noticed public hearing and all persons desiring to be heard were fully heard, and each of them are hereby overruled.

Resolution/PMD 122 Resolution Page 4 of 6
Rev: 11/22/17

3. That the public interest and convenience require that the cost and expenses of acquiring, constructing, reconstructing, installing, extending, enlarging, repairing, improving, maintaining, and operating public automobile parking places, covered pedestrian lanes and walkways, fountains and landscaping therein now existing or hereafter to be c onstructed in and for the District and of benefit to the District, but not of benefit to the City as a whole, including the cost of necessary repairs, replacements, water, fuel, power, gas, electric current, care, supervision and any and all other items necessary for the proper maintenance and opera tion thereof, and of all additions, improvements and enlargements thereto which may hereafter be made, be raised by an annual special benefit assessment in accordance with and pursuant to the provisions for the alternative method for the levy of benefit assessments in maintenance districts in said City as provided in Chapter 16.10, Article VI, of the Code on all lots or parcels of property within the District.

4. That the costs and expenses of capital repairs to the parking lots and internal walkways within the District shall annually be assessed either partly or wholly upon the several lots and parcels of property within the District benefited thereby by apportioning the costs and expenses according to benefits among the several lots or parcels of property within the District in accordance with the following formula:

A. Each assessment shall be determined on the basis of the gross floor area of the building located upon the lot or parcel of property assessed.

B. For the purposes of the formula herein, gross floor area shall mean that area computed from the outside dimensions of the building, including all and not excluding corridors and other design features, and aggregated for each additional story or mezzanine f loor and any basement area.

5. That the formula for the apportionment of benefits in the annual assessment levies be, and it is hereby, finally approved, confirmed, and adopted by this Council.

6. That the Director's Report and assessment roll, and each of the assessments therein as Resolution/PMD 122 Resolution Page 5 of 6
Rev: 11/22/17
duly revised and corrected be, and they are hereby, approved, confirmed, and adopted.

7. That the special benefit assessments shall be levied and collected annually upon the last equalized secured and utility tax rolls upon which ad valorem property taxes are collected. They shall be in addition to all other ad valorem property taxes levied, and shall be collected together with, and not separate therefrom, and enforced in the same manner and by the same person and at the same time and with the same penalties and interest as are said ad valorem property taxes. All laws applicable to the collection and enforcement of ad valorem property taxes shall be applicable to the special benefit assessment levy, and the assessed lot or parce l of property, if sold for taxes, shall be subject to redemption in the same manner as such real property is redeemed from the sale for ad valorem property taxes, and if not redeemed, shall in like manner pass to the purchaser.

8. That the Report together with the certificate of the City Clerk as to the fact and date of approval, confirmation and adoption by this Council, shall forthwith be delivered to the Director of Finance of this City who shall thereafter deliver the Report to the officer of the County of Santa Clara designated by law to extend ad valorem property taxes upon the tax roll, and the proper County officer shall cause to be posted to the tax rolls, in the column provided therefor, the amount of each of the special benefit assessments proposed to be levied and collected for said fiscal year as set forth in said Report as confirmed.

9. T hat the City Clerk shall forward a certified copy of this Resolution to the Director of Finance of the City and to the officer designated by law to extend ad va lorem property taxes upon the tax roll on which they are collected.
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Resolution/PMD 122 Resolution Page 6 of 6
Rev: 11/22/17

10. Effective date. This resolution shall become effective immediately.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE ___ DAY OF _________, 2023, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST: ______________________________

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA

Attachments incorporated by reference:

1. Director’s Report FY 2023/24

DIRECTOR'S REPORT

CITY OF SANTA CLARA

PARKING DISTRICT NO. 122 MAINTENANCE DISTRICT

FISCAL YEAR 2023/24

June 6, 2023

ASSESSMENT FORMULA

Fiscal Year 2023/24
City of Santa Clara, California

Parking District No. 122 M aintenance District
The formula upon which the annual assessment levy, for the payment of the costs and expenses of maintaining and operating the improvements, and providing funds for future parking lots and associated walkways, exceptional maintenance and improvements, within Parking District No. 122 Maintenance District, including the costs and expenses incidental thereto, will be apportioned according to benefits among the several lots or parcels of property within the Maintenance District for the Fiscal Year 2023/24 is as follows:
- Costs and expenses are to be shared between the City and property owners as below:
a. City shall pay for the operation and maintenance cost on a 100% basis. b. Property owners shall pay $14,200 annually, less interest from prior years' property owners operation and maintenance assessments as of June 30, 2002, to be kept in a fund to be used towards future exceptional maintenance and improvements of parking lots and associated walkways and appurtenances.
- Each assessment shall be determined on the basis of the gross floor area of the building located upon the lot or parcel of property assessed. - For the purposes of the formula herein, gross floor area shall mean that area computed from the outside dimensions of the building and not excluding corridors and other design features and aggregated for each additional story or mezzanine floor and any basement area.

DIRECTOR'S REPORT
ASSESSMENT for Fiscal Year 2023/24 City of Santa Clara, California

Parking Distr ict No. 122 Maintenance District

I, Craig Mobeck, Director of Public Works for the City of Santa Clara, California, pursuant to the provisions of Section 16.10.490 of the Code of the City of Santa Clara, hereby make this report and following benefit assessment to cover the costs and expenses of maintaining and operating the improvement within Parking District No. 122 Maintenance District of said City, including the costs and expenses incidental thereto, to be paid by said Maintenance District.

The amount to be paid therefor by said Maintenance District for the Fiscal Year 2023/24 is as follows:

Expenditures
As
Preliminarily
Approved
As Finally
Approved

Routine Maintenance & Operation $ 133,269.00 $ 136,990.00 Exceptional Maintenance and Repairs $ 0.00 $ 0.00 TOTAL COST $ 133,269.00 $ 136,990.00

Funding for FY 2023/24 Expenditures
Exceptional Maintenance & Improvement
From Fund Balance Reserve $0.00 $ 0.00 Contribution from City General Fund (001) $ 133,269.00 $ 136,990.00 TOTAL $ 133,269.00 $ 136,990.00

Property Owner Assessment
Owner's Annual Assessment $14,200.00 $14,200.00
Less Accrued Interest of Owner’s Fund
Balance [$2,181.00] [$2,181.00]

TOTAL NET ASSESSMENT $12,019.00 $12,019.00
(Goes to Fund Balance Reserve)

And I do hereby assess and apportion the amount said costs and expenses, including the costs and expenses incidental thereto, upon the several lots or parcels of property liable therefor and benefited thereby, in proportion to the benefits to be received by such lots or parcels of property, from the maintenance and operation thereof and more particularly set forth in the list hereto attached and by reference made a part hereof.

Each lot or parcel of land is described in the assessment list by reference to its parcel number as shown on the assessor's maps of the County of Santa Clara for the Fiscal Year 2023/24 to the right of the parcel numbers and include all of such parcel.

Date:_______________ ________________________________ Craig Mobeck, Director of Public Works

BUDGET

Fiscal Year 203/24
City of Santa Clara, California

Par king District No. 122 Maintenance District

Expenditures
As
Preliminarily
Approved
As Finally
Approved

Maintenance & Operation: $ 133,269.00 $ 136,990.00 Labor, materials, supplies, and equipment to maintain Parking
Maintenance District No. 122
including, but not limited to water,
sewer, and electrical costs,
sweeping of parking lots and mall
area, maintenance of pavement,
striping, landscaping, mall fountains,
City supervision (50% of labor and
fringe benefits of Street Maintenance
Worker III).

Exceptional Maintenance and
Improvements of Parking Lots
and Associated Walkways
$ 0.00 $ 0.00

TOTAL COST $ 133,269.00 $ 136,990.00

Funding for FY 2023/24 Expenditure

Owner's Reserve for
Exceptional Maintenance &
Improvement Fund Balance:
[$ 0.00] [$ 0.00]

Contribution from City
General Fund (001): [$133,269.00] [$136,990.00]

Owner's Annual
Assessment $14,200.00 $14,200.00

Less Accrued Interest on
Owners' Fund Balance: [$2,181.00] [$2,181.00]

Total Net Assessment:

$12,019.00

ASSESSMENT

Fiscal Year 2023/24
City of Santa Clara, California

Parking D istrict No. 122 Maintenance District

Name & Address of Owner

Assessor's
Parcel
Number

(2) As
Finally
Confirmed

(1) As
Preliminarily
Approved

Gross Floor
Area (sq. ft.)

% of Total
Floor Area

Green Valley Corporation
777 N. First Street, 5th Floor
San Jose, CA 95112
269-22-111 $2,512.81 $2,512.81 13,305.22 20.907

Ramiro Hermosillo Trust
3121 Riddle Rd.

San Jose, CA 95117
269-22-110 $1,328.46 $1,328.46 7,034.13 11.053

John DeMartini Trustee & Et al.
477 9th Avenue Ste 107
San Mateo, CA 94402
269-22-108 $1,607.90 $1,607.90 8,513.76 13.378

David DeLozier Trustee
1162 Carmel Way
Santa Clara, CA 95050
269-22-098 $1,406.22 $1,406.22 7,445.88 11.700

T & I Real Estate Solutions
364 Appian Way
Union City, CA 94587
269-22-103 $ 262.01 $ 262.01 1,387.35 2.180

Alice May-Wan Chan
20015 Bella Vista
Saratoga, CA 95070
269-22-102 $ 151.20 $ 151.20 800.59 1.258

Ross L. Peterson Et al.
10 Enterprise Dr.

Corte Madera, CA 94925
269-22-105 $ 378.48 $ 378.48 2,004.02 3.149

ASSESSMENT

Fiscal Year 2023/24
City of Santa Clara, California

Parking District No. 122 Maintenance District

Name & Address of Owner

Assessor's
Parcel
Number

(2) As Finally
Confirmed

(1) As
Preliminarily
Approved

Gross Floor
Area (sq. ft.)

% of Total
Floor Area
Robert Freitas Et al.
255 Washington Street
Milpitas, CA 95035
269-22-104 $ 314.42 $ 314.42 1,664.82 2.616

Gillmor Properties LLC
1201 Franklin Mall
Santa Clara, CA 95050
269-22-113 $ 406.36 $ 406.36 2,151.67 3.381

Thomas Mitchell Trustee & Et al.
1291 Franklin Mall
Santa Clara, CA 95050
269-22-106 $1,506.35 $1,506.35 7,976.00 12.533

Vitarelli Family LP
925 Circle Drive
Santa Clara, CA 95050
269-22-101 $ 416.46 $ 416.46 2,205.13 3.465

Vitarelli Family LP
925 Circle Drive
Santa Clara, CA 95050
269-22-100 $ 232.93 $ 232.93 1,233.34 1.938

Gillmor Properties LLC
1201 Franklin Mall
Santa Clara, CA 95050
269-22-115 $1,138.08 $1,138.08 6,026.07 9.469

Gillmor Properties LLC
1201 Franklin Mall
Santa Clara, CA 95050
269-22-114 $ 357.32 $ 357.32 1,892.02 2.973
TOTAL
$12,019.00 $12,019.00 63,640.00 100%
I, the Assistant City Clerk of the City of Santa Clara, hereby ce rtify th at the foregoing assessment in the amounts set forth in Column (2) unless Column (2) is blank, in whi ch event the amounts in Column (1) apply, was approved and confirmed by the City Council of said City o n
, 2023.

__
Nora Pimentel, MMC
Assistant City Clerk
City
of Santa Clara

City of Santa Clara
Regarding the Levy of Benefit Assessment Applicable to the Santa Clara Parking Maintenance District No. 122, and Approval of Distribution of Director’s Report Fiscal Year 2023/24

NOTICE IS HEREBY GIVEN that the Director of Public Wo rks has requested a repor t, in writing, to be prepared and filed with the City Clerk, which provides the basis for the levy of benefit assessments for the costs of maintenance and operation on all lots or parcels of property within said maintenance distric t. Said report sets forth the amounts to be provided in the budget for maintenance and operation; a description of each lot or parcel of property in the maintenance district, by a legal description, assessor's parcel number or other description sufficient to identify the same; and the amount of assessment to be levied for the fiscal year 202 3/24 against each lot or parcel of property. Said report is open to public inspection.

Said report will be heard by the Council at its meeting to be held on Tuesday, June 6, 2023, at 7:00 p.m. or as soon as thereafter as the matter may be heard in chambers and virtually, at which time said Council will examine said report and hear all persons interested therein. The City of Santa Clara is conducting City Council meetings in a hybrid manner in-person (City Hall Council Chambers, 1500 Warburton Avenue, Santa Clara) and continues to have methods for the public to participate remotely. o Via Zoom:
o https://santaclaraca.zoom.us/j/99706759306 Meeting ID: 997-0675-9306 o Phone 1(669) 900-6833
How to Submit Written Public Comment Before City Council Meeting:

1. Use the eComment tab located on the City Council Agenda page https://santaclara.legistar.com/Calendar.aspx.
eComments are directly sent to the iLegislate application used by City Council and staff, and become part of the public record. eComment closes 15 minutes before the start of a meeting.

NOTE: Please note eComments and Emails received as public comment will not be read aloud during the meeting.

Any interested owner, objecting to the amount of the assessment on any lot or parcel of property owned by him, may file with the City Clerk at or before the hour fixed for hearing a protest, in writing, signed by him, describing the lot or parcel of proper ty so that it may be identified, and stating the grounds of his/her protest, and may appear at said hearing and be heard in regard thereto.

Americans with Disabilities Act (ADA): In accordance with the requirements of Title II of the Americans with Disabilities Act of 1990 ("AD A"), the City of Santa Clara will not discriminate against qualified individuals with disabilities on the basis of disability in its services, programs, or activities, and will ensure that all existing facilities will be made accessible to the maximum exte nt feasible. The City of Santa Clara will generally, upon request, provide appropriate aids and services leading to effective communication for qualified persons with disabilities including those with speech, hearing, or vision impairments so they can part icipate equally in the City’s programs, services, and activities. The City of Santa Clara will make all reasonable modifications to policies and programs to ensure that people w ith disabilities have an equal opportunity to enjoy all of its programs, services, and activities.

Agendas and other written materials distributed during a public meeting that are public record will be made available by the City in an appropriate alternati ve format. Contact the City Clerk’s Office at 1 -408-615-2220 with your request for an alternative format copy of the agenda or other written materials.

Individuals who re quire an auxiliary aid or service for effective communicati on, or any other disability-related modification of policies or procedures, or othe r accommodation, in order to participate in a program, service, or activity of the City of Santa Clara, should contact the City’s ADA Coordinator at 408-615-3000 as soon as possible but no later than 48 hours before the scheduled event.

Please see the above-mentioned options citizens may participate in the upcoming

hearing. Submit written and/or oral comments directly to the City Clerk, 1500 Warburton Avenue, Santa Clara, California, 95050; telephone 408-615-2220.

Nora Pimentel, MMC, Assistant City Clerk

City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-209 Agenda Date: 6/6/2023

REPORT TO COUNCIL

SUBJECT
Public Hearing: Adoption of a Resolution Approving the Levy of Benefit Assessment Upon the Santa Clara Convention Center Complex - Maintenance District No. 183

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
The original lease agreements between the Redevelopment Agency of the City of Santa Clara, Santa Clara Convention Hotel Limited Partnership (Hotel) and SCCC Associates II (Techmart) provided for the formation of the Santa Clara Convention Center Complex - Maintenance District No. 183 (MD 183). These agreements also served to apportion the funds necessary to maintain and operate the common improvements serving the Convention Center, Hotel, and Techmart. Hudson Techmart Commerce Center LLC currently owns Techmart, Hyatt Regency Santa Clara is the current Hotel owner, and the Convention Center building is owned by the City of Santa Clara. Each of these three parties are responsible for a share of the maintenance assessment, which is set by the annual budget.

In June 1986, Council Adopted Resolution 5081 that formed MD 183 and established the mechanism for funding maintenance and operations on an annual basis. There are two components of this annual funding. The first component is the overall cost of maintaining and operating the general infrastructure consisting of things such as pavement, sidewalk, walkways, covered walkways, signs, landscaping etc. In addition to the cost of maintaining and operating the common areas, the proposed total cost includes expenses relating to the City's cost to administer MD 183, insurance, and utilities. The cost for these items is split by 39.64 percent to the City of Santa Clara (City), 22.94 percent to the Hyatt Regency Hotel (Hyatt), and 37.42 percent to Hudson Techmart Commerce Center LLC (Techmart). The second component includes the cost of maintaining and operating permanent parking controls such as fixed signage, electronic signage, and other parking related equipment. The costs for these items are allocated 30.04 percent to the City, 22.12 percent to the Hyatt, and 47.84 percent to Techmart. The third and final component includes the costs for maintaining and operating temporary parking controls such as moveable barriers, temporary parking attendants and guards, adjustable gates, and signage. The costs for these items are allocated by

78.72 percent to the City, 10.64 percent to the Hyatt, and 10.64 percent to Techmart.

A Director’s Report for each maintenance district is required to be prepared each fiscal year by the Director of Public Works, setting forth the budget for the ensuing year, the formula for the annual assessment levy and a description of each property, including the amount of assessment to be levied against each lot. A copy of the Director’s Report for the District for FY 2023/24 has been prepared and is attached (Attachment 1). This Report has also been filed with the City Clerk.

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23-209 Agenda Date: 6/6/2023
Proposition 218, passed by the voters of California in November 1996, made significant changes to the method and manner of approving assessments for maintenance districts. Proposition 218 requires that written ballots be sent and returned if there are proposed increases greater than any previously approved assessments. A written majority of ballots, weighted according to the proportional financial obligation, needs to be received to approve any proposed annual increase.

Copies of the Director’s Report were mailed to each of the owners in Maintenance District No. 183 apprising them of the proposed formula, including the amount of the individual assessment. Staff notified property owners and any interested tenants about scheduled meetings on April 5, 2023 and May 3, 2023 to discuss the Director’s Report and the assessment district procedures.

DISCUSSION
On April 18, 2023, the City Council adopted a Resolution of Intention (Resolution No. 23-9218, Attachment 2) related to the proposed FY 2023/24 special benefit assessments for MD 183, which is bounded by Tasman Drive, Great America Parkway, and San Tomas Aquino Creek. In addition, the Resolution of Intention established June 6, 2023 as the date that City Council would hear testimony and act upon the attached report prepared by the Director of Public Works.

Per Proposition 218 requirements, since the proposed FY 2023/24 operational and maintenance costs of $1,774,119 is approximately $104,000 less than the greatest previously approved assessments, ballots and approvals are not required from all members of MD 183. Decreases are due to the proposed road work which was already budgeted in FY 2022/23 and scheduled for completion in FY 2023/24. Members of PMD 183 reviewed and discussed the proposed budget.

FISCAL IMPACT
The total expenditure budget in the FY 2023/24 Proposed Operating Budget for the Convention Center Maintenance District Fund is $1,919,119. Of that, $145,000 is prior year’s surplus that is budgeted in FY 2023/24 for asphalt paving rehabilitation work. The remaining budget of $1,774,119 reflects a decrease in the total cost for operation and maintenance. In FY 2023/24, the proposed budget includes the assessments from the three property owners totaling $1,774,119.

The proposed assessments by property owner are as follows: $805,383 from the City of Santa Clara (Santa Clara Convention Center); $374,265 from the Hyatt Regency Hotel; and $594,471 from the Hudson Techmart Commerce Center. The funds to pay for the proposed assessment for the City’s portion (formerly that of the Redevelopment Agency) are budgeted as a transfer from the General Fund.

COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board City of Santa Clara Printed on 6/2/2023Page 2 of 3
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23-209 Agenda Date: 6/6/2023
outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> .

ALTERNATIVES

1. Adopt a resolution approving the levy of benefit assessment upon the Santa Clara Convention Center Complex - Maintenance District No.183, and approving, confirming, and adopting the Director’s Report for FY 2023/24.

2. Do not adopt a Resolution to move forward with collecting the property owner assessments and provide Staff with further direction on funding the assessments.

RECOMMENDATION
Alternative 1:

Adopt a resolution approving the levy of benefit assessment upon the Santa Clara Convention Center Complex - Maintenance District No. 183, and approving, confirming, and adopting the Director’s Report for FY 2023/24.

Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jōvan D. Grogan, City Manager

ATTACHMENTS

1. Director’s Report FY 2023/24

2. Resolution No. 23-9218

3. Notice of Public Hearing

4. Resolution
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DIRECTOR’S REPORT

CITY OF SANTA CLARA

SANTA CLARA CONVENTION CENTER COMPLEX

MAINTENANCE DISTRICT NO. 183

FISCAL YEAR 2023/2024

4/18/23

COUNCIL APPROVED: (proposed June 6, 2023)

Director of Public Works/City Engineer

2 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California
SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023/2024

DIRECTOR'S REPORT

The Director of Public Works/City Engineer of the City of Santa Clara, California, pursuant to the provisions of Section 16.10.490 of the Code of the City of Santa Clara, hereby make s this report and the following special benefit assessment to cover the costs and expenses of maintaining and operating the improvements within Santa Clara Convention Center Complex Maintenance District No. 183 of said City, including the costs and expenses incidental thereto, to be paid by said Maintenance District.

The amount to be paid therefore by said Maintenance District for the Fiscal Year 2023-24 is as follows:

As F
inally Confirmed

Maintenance and Operations $1,639,119

Permanent Parking Controls $15,000
Reserve for Dynamic Parking Controls $265,000
Exceptional Improvements $0
Funds Advanced by and to be Repaid to City $0
TOTAL COST $1,919,119
Less Amount of Surplus From Prior Years:

Convention Center $57,478
Hyatt Corporation - A Delaware Limited Liability Corporation $33,263 Hudson Techmart Commerce Center L.L.C $54,259
Amount of Reserves: $0
Amount of Contribution: $0

BALANCE OF ASSESSMENT $1,774,119

And I do thereby assess and apportion the amount of said costs and expenses, including the costs and expenses incidental thereto, upon the several lots or parcels of property liable therefore and specially benefited thereby, in proportion to the benefits to be received by each lot or parcel of property, from the maintenance and operation thereof and more particularly set forth in the list hereto attached and by reference made a part hereof.

Each lot or parcel of land is described in the assessment list by reference to its parcel number as shown on the assessor's maps of the County of Santa Clara for Effective Roll Year 2023-24 to the right of the parcel numbers and include all of such parcel.

I hereby certify to the best of my professional knowledge and experience that each of the identified benefiting properties located within the District receives a special benefit over and above the benefits conferred to the public at large and that the amount of the assessment is proportional to the benefits specially received or enjoyed by each parcel or property within the District.

Date: ___________________________ _____________________________________________ Director of Public Works
City of Santa Clara
3 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California
SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023-24

DIRECTOR'S REPORT

TABLE 1. BUDGET

Category Estimated
Cost Description Of Category

Maintenance and
Operation
1,639,119 Labor, materials, supplies and equipment to maintain and operate Maintenance District No. 183 including,
but not limited to water, sewer, electrical and other
utility costs, sweeping of parking lots, maintenance of pavement and sidewalks, pavement striping, signs,
fountains, landscaping, storm drains, lighting, space
frames, parking structure, bridges, other common
improvements, City supervision and management of
maintenance district, insurance, contingencies, and
incidental expenses.

Permanent Parking
Controls
$15,000 Labor, materials, supplies and equipment to maintain and operate fixed directional signs, electronic signs,
automatic vehicle counting devices, cashiering
stations, ticket printer, dispensers, card readers, cashier booths, including regularly scheduled parking
attendants and guards.

Dynamic Parking
Controls
$265,000 Labor, materials, supplies and equipment to maintain and operate movable barriers and barrier placement,
special parking attendants and guards, implementation
of adjustable gates, special directional signs, and
implementation of electronic signs.

Exceptional
Improvements
$0 Special improvement project benefiting special parcel.

Funds Advanced by
and to be Repaid to
City
$0 For deficits which occurred in prior years
TOTAL COST $1,919,119
Less Amount of Surplus From Prior Years:

City of Santa Clara $57,478
Hyatt Regency Hotel Santa Clara $33,263
Hudson Techmart Commerce Center L.L.C $54,259
Amount of Reserves: $0
Amount of Contribution: $0

BALANCE OF ASSESSMENT $1,774,119
4 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California

SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023-24

DIRECTOR'S REPORT

TABLE 2. PROPERTY OWNERS TO BE ASSESSED

Name & Address of Owner
Assessor's
Parcel
Number
As
Preliminarily
Approved
As Finally
Confirmed

City of Santa Clara
1500 Warburton Avenue
Santa Clara, CA 95050
Santa Clara Convention Center (Convention
Center)
104-55-017 $862,861 $805,383

Hyatt Corporation as agent of IA Lodging Santa
Clara TRS, L.L.C dba Hyatt Regency Santa Clara
Erin Henry – General Manager
5101 Great America Parkway
Santa Clara, CA 95054
(Hotel)
104-55-005
104-55-012
$407,528 $374,265

Hudson Techmart Commerce Center L.L.C
Rebecca Agbuya, Senior Director
2055 Gateway Place, Suite 200
San Jose, CA 95110
(Techmart)
104-55-013 $648,730 $594,471
TOTAL $1,919,119 $1,774,119

Also Send Copy of Director’s Report To:

Hyatt Regency Santa Clara
Erin Henry– General Manager
5101 Great America Parkway
Santa Clara, CA 95054

Hudson Techmart Commerce Center L.L.C
Rebecca Agbuya, Senior Director
2055 Gateway Place, Suite 200
San Jose, CA 95110

5 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California

SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023-2024

DIRECTOR'S REPORT

TABLE 3. BUDGET/ASSESSMENT COMPARISON

Budget for Fiscal Year 2022-2023 Budget for Fiscal Year 2023-2024 Total
Assessment
Reduced by
Proportion
From Prior
Year’s Surplus
Net Assessment Total
Assessment
Reduced by
Proportion
From Prior
Year’s Surplus
Net Assessment

City of Santa Clara
(Convention Center)
$842,700 $0 $842,700 $862,861 $57,478 $805,383

Hyatt Regency Hotel
Santa Clara
$399,353 $0 $399,353 $407,528 $33,263 $374,265

Hudson Techmart Commerce
Center L.L.C
$636,066 $0 $636,066 $648,730 $54,259 $594,471
TOTAL $1,878,119 $0 $1,878,119 $1,919,119 $145,000 $1,774,119

6 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California

SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023-2024

DIRECTOR'S REPORT

TABLE 4. FORMULA FOR ASSESSMENT LEVY

Category Estimated
Expenditure
City of Santa Clara
(Conv. Center)
Hyatt Regency
Hotel Santa Clara
Hudson Techmart
Commerce Center

39.64% 22.94% 37.42%
I. Maintenance and Operations 1,494,119 $592,269 $342,751 $559,099

30.04% 22.12% 47.84%
II. Permanent Parking Controls $15,000 $4,506 $3,318 $7,176

78.72% 10.64% 10.64%
III. Dynamic Parking Controls $265,000 $208,608 $28,196 $28,196

IV. Exceptional Improvements $0 $0 $0 $0

V. Funds Advanced by/to be Repaid to City $0 $0 $0 $0

VI. Surplus Funds from Prior Year $0 $57,478 $33,263 $54,259 TOTAL ASSESSMENT $862,861 $407,528 $648,730

4I:\MD #183 Convention Center\Assessments\2024April\MD#183 Director's Report 23-24Apr.doc Resolution of Intention for MD No. 183 for FY 2023-24 and Set Public Hearing for June 6, 2023 Page 1 of 5 Rev: 11/22/17

RESOLUTION NO. 23-9218

A RESOLUTION OF THE CITY OF SANTA CLARA,

CALIFORNIA, OF INTENTION TO ORDER THAT THE

ALTERNATIVE METHOD FOR THE LEVY OF BENEFIT

ASSESSMENT BE MADE APPLICABLE TO CITY OF SANTA

CLARA CONVENTION CENTER COMPLEX MAINTENANCE
DISTRICT NO. 183, PROVIDING FOR NOTICE OF HEARING

THEREON, APPROVING THE DISTRIBUTION OF THE
DIRECTOR’S REPORT, AND PROVIDING FOR NOTICE OF
HEARING ON DIRECTOR’ S REPORT FOR FISCAL YEAR
2023-24
BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, pursuant to Chapter 16.10 of "The Code of the City of Santa Clara, California” ("City Code"), the City Council of the City of Santa Clara, California ("Council") adopted Resolution No. 5081 on June 3, 1986, creating "City of Santa Clara Convention Center Complex Maintenance District No. 183" ("District") in the City of Santa Clara, California ("City").

Resolution No. 5081 also ordered that the costs and expenses of maintaining and operating the on-site public improvements ("Public Improvements") on the property within t he District, including the cost of necessary repairs, replacements, fuel, power, electrical current, care, supervision and any and all other items necessary for the proper maintenance and operation of the Public Improvements be raised by the levy of an annual special benefit assessment apportioned according to special benefits conferred among the parcels of property within the District in accordance with a formula set forth in Resolution No. 5081, and in accordance with and pursuant to the provisions for the alternative method for the levy of benefit assessments in maintenance districts in the City as provided in the City Code; WHEREAS, the Council adopted Ordinance No. 1401 on April 8, 1980, which provided for an alternative method for annually fixing and levying a special benefit assessment within maintenance districts located in the City for said purpose; //
//
Resolution of Intention for MD No. 183 for FY 2023-24 and Set Public Hearing for June 6, 2023 Page 2 of 5 Rev: 11/22/17

WHEREAS, in the opinion of this Council, the annual costs of maintenance and operation of the Public Improvements shall be appropriately financed pursuant to the provisions of Ordinance No. 1401 and Resolution No. 5081 and related provisions of the City Code; WHEREAS, pursuant to the provisions of Resolution No. 5081, the City 's Director of Public Works has made and filed with the City Clerk a writt en report ("Director’s Report") setting forth the budget, the formula for the annual assessment levy, a description of each lot or parcel of property to be assessed and the amount of the assessment to be levied against each lot or parcel of property in ac cordance with said formula for Fiscal Year 2023-24. The costs of operation, maintenance, and servicing of improvements to be funded by the District are apportioned to each parcel in proportion to the special benefit it receives; WHEREAS, City Staff met wit h the affected property owners on March 1, 2023 to discuss the Director’s Report;
WHEREAS, Articles XIIIC and XIIID of the California Constitution (Proposition 218) requires majority approval of the property owners within the District for any increase in the rate used to calculate the assessment or changes in the methodology by which the assessment is calculated, if t hat change increases the amount of the assessment imposed on any person or parcel;
WHEREAS, the Director’s Report, Ballot, and public hearing notice are to be sent out at least 45 days in advance of the public hearing to all property owners, and any tenants within the District who are responsible for paying each assessment;
WHEREAS, in the event of an assessment that is greater than any previous assessment, a majority weighted vote of the Ballots (weighting determined by an amount of assessment paid), must be received in order to approve any proposed increase in assessment; WHEREAS, for Fiscal Year 2023-24, the assessments are not increasing and therefore, Proposition 218 requirements does not apply; and
Resolution of Intention for MD No. 183 for FY 2023-24 and Set Public Hearing for June 6, 2023 Page 3 of 5 Rev: 11/22/17

WHEREAS, the Council has duly considered the Director’s Report and finds that it is suff icient and does not require modification.

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA A S FOLLOWS:

1. That the recitals set forth above are true and correct and by this reference, the Council makes them a part hereof.

2. That the public interest and convenience require and this Council hereby orders that the costs and expenses of acquiring, c onstructing, reconstructing, installing, extending, enlarging, repairing, improving, maintaining and operating the Public Improvements now existing or hereafter to be constructed in and for the District which benefit the District as a whole, including the cost of necessary repairs, replacements, water, fuel, power, gas, electric current, care, supervision and any and all other items necessary for the proper maintenance and operation thereof, and of all additions, improvements and enlargements thereto which may hereafter be made, be raised by an annual special benefit assessment in accordance with and pursuant to the provisions for the alternative method for the levy of benefit assessments in maintenance districts in the City, as provided in Section 16.10.490 and Section 16.10.500 of the City Code, on all lots or parcels of property within the District.

3. That the costs and expenses of maintaining and operating the Public Improvements within the District shall annually be assessed, either partly or wholly, upon the benefited lots and parcels of property within the District by apportioning the costs and expenses according to benefits in proportion to the special benefits received by each lot or parcel of property within the District in accordance with the formula set forth in EXHIBIT "B" of Resolution No. 5081. //
//
//
//
Resolution of Intention for MD No. 183 for FY 2023-24 and Set Public Hearing for June 6, 2023 Page 4 of 5 Rev: 11/22/17

4. That the City Manager caused a budget to be prepared for the costs of the expenses of maintaining and operating the Public Improvements during fiscal year 2023-24 and the Director of Public Works prepared and filed a Director’s Report with the City Clerk which provides the basis for the levy of benefit assessments for the cost of maintenance and operation on all lots or parcels of property within the District.

5. NOTICE IS HEREBY GIVEN tha t on Tuesday, June 6, 2023, at 4:00 p.m., at its regular meeting place in the Council Chambers at City Hall, 1500 Warburton Avenue, Santa Clara, California, the Council will hold a public hearing during which it will hear any and all evidence and protests relating to said alternative method for the levy of benefit assessments and said formula for the District, and if the assessment is greater than any previous as sessment, certify any ballots received and determine any weighted vote necessary, examine said D irector’s Report and hear all persons interested therein. Any interested property owner, who objects to the alternative method for the levy of benefit assessments, the formula, or to the amount of the assessment on any lot or parcel of property owned by him/her, may file a signed written protest with the City Clerk before the commencement of the Council meeting during which the public hearing will be held, descr ibing the lot or parcel of property owned by him/her so that it may be identified and stating the grounds of his/her protest. The property owner may appear at the hearing and be heard with regard to his/her protest.

6. The City Clerk is hereby authorized and directed to a) post a copy of notice of hearing on or near the Council Chamber door or any bul letin board in or adjacent to the City Hall and b) publish a copy of notice of hearing at least once in a newspaper of general circulation, pursuant to City Code Section 16.10.490(p).
//
//
//
//

7. The Director of Public Works is hereby authorlzed and directed to give notice of said hearing by mailing a copy of this Resolution of Intention and Director's Report , postage prepaid to record owners of any lot or parcel of property subject to a benefit assessment to pay said costs of maintenance and operation , as determined by the last assessment roll. This Resolution will be available for public inspection in the City Clerk 's office ; and said mailing shall be done at least forty-five (45) days , and posting and publ ication shall be completed not less than ten (10) days , prior to the date fixed (June 6, 2023) for the hearing .

8. Effective date . This resolution shall become effect ive immediately .

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA , CALIFORNIA , AT A AND A REGULAR MEETING THEREOF HELD ON THE 18TH DAY OF APRIL , 2023 , BY THE FOLLOWING VOTE:

AYES : COUNCILORS :

NOES : COUNCILORS :

ABSENT : COUNCILORS :

ABSTAINED : COUNCILORS :

Attachments incorporated by reference :

1. Director's Report
Becker , Chahal, Hardy , Jain , Park , and Watanabe ,
and Mayor Gillmor
None
None
None
ATTEST : ~
NORAPIMENTE( c

ASSISTANT CITY CLERK

CITY OF SANTA CLARA
ResolUtlon of Intention for MD No. 183 for FY 2023-24 and Set Public Hearing for June 6, 2023 Rev: 11 /22/17

Page 5 of 5 ends

DIRECTOR’S REPORT

CITY OF SANTA CLARA

SANTA CLARA CONVENTION CENTER COMPLEX

MAINTENANCE DISTRICT NO. 183

FISCAL YEAR 2023/2024

4/18/23

COUNCIL APPROVED: (proposed June 6, 2023)

Director of Public Works/City Engineer

2 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California
SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023/2024

DIRECTOR'S REPORT

The amount to be paid therefore by said Maintenance District for the Fiscal Year 2023-24 is as follows:

As Finally Confirmed

Maintenance and Operations $1,639,119

Convention Center $57,478
Hyatt Corporation - A Delaware Limited Liability Corporation $33,263 Hudson Techmart Commerce Center L.L.C $54,259
Amount of Reserves: $0
Amount of Contribution: $0

BALANCE OF ASSESSMENT $1,774,119

DIRECTOR'S REPORT

TABLE 1. BUDGET

Category Estimated
Cost Description Of Category

Exceptional
Improvements
$0 Special improvement project benefiting special parcel.

Funds Advanced by
and to be Repaid to
City
$0 For deficits which occurred in prior years
TOTAL COST $1,919,119
Less Amount of Surplus From Prior Years:

City of Santa Clara $57,478
Hyatt Regency Hotel Santa Clara $33,263
Hudson Techmart Commerce Center L.L.C $54,259
Amount of Reserves: $0
Amount of Contribution: $0

BALANCE OF ASSESSMENT $1,774,119
4 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California

SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023-24

DIRECTOR'S REPORT

TABLE 2. PROPERTY OWNERS TO BE ASSESSED

Name & Address of Owner
Assessor's
Parcel
Number
As
Preliminarily
Approved
As Finally
Confirmed

City of Santa Clara
1500 Warburton Avenue
Santa Clara, CA 95050
Santa Clara Convention Center (Convention
Center)
104-55-017 $862,861 $805,383

Hyatt Corporation as agent of IA Lodging Santa
Clara TRS, L.L.C dba Hyatt Regency Santa Clara
Eron Hodges – General Manager
5101 Great America Parkway
Santa Clara, CA 95054
(Hotel)
104-55-005
104-55-012
$407,528 $374,265

Hudson Techmart Commerce Center L.L.C
Rebecca Agbuya, Senior Director
2055 Gateway Place, Suite 200
San Jose, CA 95110
(Techmart)
104-55-013 $648,730 $594,471
TOTAL $1,919,119 $1,774,119

Also Send Copy of Director’s Report To:

Hyatt Regency Santa Clara
Eron Hodges – General Manager
5101 Great America Parkway
Santa Clara, CA 95054

Hudson Techmart Commerce Center L.L.C
Rebecca Agbuya, Senior Director
2055 Gateway Place, Suite 200
San Jose, CA 95110

5 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California

SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023-2024

DIRECTOR'S REPORT

TABLE 3. BUDGET/ASSESSMENT COMPARISON

City of Santa Clara
(Convention Center)
$842,700 $0 $842,700 $862,861 $57,478 $805,383

Hyatt Regency Hotel
Santa Clara
$399,353 $0 $399,353 $407,528 $33,263 $374,265

Hudson Techmart Commerce
Center L.L.C
$636,066 $0 $636,066 $648,730 $54,259 $594,471
TOTAL $1,878,119 $0 $1,878,119 $1,919,119 $145,000 $1,774,119

6 SANTA CLARA CONVENTION CENTER COMPLEX
MAINTENANCE DISTRICT NO. 183
City of Santa Clara, California

SPECIAL BENEFIT ASSESSMENT for Fiscal Year 2023-2024

DIRECTOR'S REPORT

TABLE 4. FORMULA FOR ASSESSMENT LEVY

Category Estimated
Expenditure
City of Santa Clara
(Conv. Center)
Hyatt Regency
Hotel Santa Clara
Hudson Techmart
Commerce Center

39.64% 22.94% 37.42%
I. Maintenance and Operations 1,494,119 $592,269 $342,751 $559,099

30.04% 22.12% 47.84%
II. Permanent Parking Controls $15,000 $4,506 $3,318 $7,176

78.72% 10.64% 10.64%
III. Dynamic Parking Controls $265,000 $208,608 $28,196 $28,196

IV. Exceptional Improvements $0 $0 $0 $0

V. Funds Advanced by/to be Repaid to City $0 $0 $0 $0

VI. Surplus Funds from Prior Year $0 $57,478 $33,263 $54,259 TOTAL ASSESSMENT $862,861 $407,528 $648,730

4I:\MD #183 Convention Center\Assessments\2024April\MD#183 Director's Report 23-24Apr.doc Notice of Public Hearing #183 2023.doc

City of Santa Clara
Notice of Public Hearing Regarding the Levy of Benefit Assessments Applicable to the Santa Clara Convention Center Maintenance District No. 183, and Approval of Distribution of Director's Report Fiscal Year 2023-24
NOTICE IS HEREBY GIVEN that the City Council of the City of Santa Clara has determined and fixed its regularly scheduled meeting of June 6, 2023 at 7:00 p.m., or as soon thereafter as the matter may be heard in chambers and virtually as the location, date and time to conduct a public hearing to consider the passage of a resolution as follows: "a Resolution of the City of Santa Clara, California, approving the levy of benefit assessment upon the Santa Clara Convention Center Complex Maintenance District No. 183, and approving, confirming and adopting Director’s Report for Fiscal Year 2023 -2024.” The purpose of the public hearing is to provide City staff with an opportunity to present the City Council and the public with information concerning the proposed assessments ($968,736 total) to the property operators, to pay towards maintenance repairs of the Santa Clara Convention Maintenance District No. 183 and the proposed determination of the City to pay all of the remaining costs ($805,383) for routine maintenance and operation of the property and improvements of the Santa Clara Maintenance District No. 183. A total of 3 operators pay for the assessments. The public may submit written comments prior to, or make oral presentations, at the public meeting.

The City of Santa Clara is conducting City Council meetings in a hybrid manner (in-person and continues to have methods for the public to participate remotely). o Via Zoom:
o https://santaclaraca.zoom.us/j/99706759306 Meeting ID: 997-0675-9306 o Phone 1(669) 900-6833
How to Submit Written Public Comment Before City Council Meeting:

2. By email to [email protected] by 12 p.m. the day of the meeting. Those emails will be forwarded to the Council and will be uploaded to the City Council Agenda as supplemental meeting material. Emails received after the 12 p.m. cutoff time up through the end of the meeting will form part of the meeting record. Please identify the Agenda Item Number in the subject line of your email. NOTE: Please note eComments and Emails received as public comment will not be read aloud during the meeting.As always, the public may view the meetings on SantaClaraCA.gov, Santa Clara City Television (Comcast cable channel 15 or AT&T U-verse channel 99), or the livestream on the City’s YouTube channel or Facebook page.

A copy of the above Resolution and Director's Report will be made available for public inspection in the City Clerk's Office, City Hall, 1500 Warburton Avenue, Santa Clara, California.

Americans with Disabilities Act (ADA): In accordance with the requirements of Title II of the Americans with Disabilities Act of 1990 ("ADA"), the City of San ta Clara will not discriminate against qualified individuals with disabilities on the basis of disability in its services, programs, or activities, and will ensure that all existing facilities will be made accessible to the maximum extent feasible. The Cit y of Santa Clara will generally, upon request, provide appropriate aids and services leading to effective communication for qualified persons with disabilities including those with speech, hearing, or vision impairments so they can participate equally in the City’s programs, services, and activities. The City of Santa Clara will make all reasonable modifications to policies and programs to ensure that people with disabilities have an equal opportunity to enjoy all of its programs, services, and activities.

Agendas and other written materials distributed during a public meeting that are public record will be made available by the City in an appropriate alternative format. Contact the City Clerk’s Office at 1 -408-615-2220 with your request for an alternative format copy of the agenda or other written materials.

Individuals who require an auxiliary aid or service for effective communication, or any other disability - related modification of policies or procedures, or other accommodation, in order to participate in a program, service, or activity of the City of Santa Clara, should contact the City’s ADA Coordinator at 408 -615-3000 as soon as possible but no later than 48 hours before the scheduled event.

Notice of Public Hearing #183 2023.doc

Please see the above-mentioned options citizens may participate in the upcoming hearing. Submit written and/or oral comments directly to the City Clerk, 1500 Warburton Avenue, Santa Clara, California, 95050; telephone 408-615-2220.

Nora Pimentel, Assistant City Clerk

Resolution/Assessment Dist 183 Page 1 of 5
Rev. 11/22/17; Typed 4.17.23
RESOLUTION NO. 23-

A RESOLUTION OF THE CITY OF SANTA CLARA,

CALIFORNIA, APPROVING THE LEVY OF BENEFIT

ASSESSMENT UPON THE SANTA CLARA CONVENTION
CENTER COMPLEX MAINTENANCE DISTRICT NO. 183, AND
APPROVING, CONFIRMING, AND ADOPTING DIRECTOR’S
REPORT FOR FISCAL YEAR 2023-24
BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, pursuant to the provisions of Chapter 16, Article II, Division 5.1 of the Santa Clara City Code (“City Code”) on May 13, 1986, Council adopted Resolution No. 5068, “A R esolution of Intention to Form Santa Clara Convention Center Complex Maintenance District No. 183 and to Order that the Alternative Method for the Levy of Benefit Assessments be Made Applicable Thereto;”
WHEREAS, after proceedings to that end duly held on June 3, 1986, the Council adopted Resolution No. 5081, “A Resolution of Intention to Order that the Alternative Method for the Levy of Benefit Assessments be Made Applicable to City of Santa Clara Convention Center Complex Maintenance District No. 183, Providing for Notice of Hearing Thereon, Approving Director’s Report, and Providing for Notice of Hearing on Director’s Report;” WHEREAS, pursuant to Article VI of C hapter 16.10 of t he City Code ), the City Manager or designee has caused to be prepared a budget for the costs and expenses of maintaining and operating within the City of Santa Clara Convention Center Complex Maintenance District No. 183 (“District”) the local public improvements for the fiscal year 2023-24, including (a) the gross amount required for the costs and expenses of maintaining and operating the improvements; (b) the surplus balance available at the end of the preceding fiscal year for such purposes; (c) the amount, if any, to be contributed to pay any part of the costs and expenses; (d) t he amount, if any, to be repaid to the City for funds advanced by it to pay deficiencies which occurred in prior years; and (e) the balance of the amount necessary to pay the costs and expenses; WHEREAS, pursuant to Resolution No. 23-9218 and the City C ode, th e Director of Public Resolution/Assessment Dist 183 Page 2 of 5
Rev. 11/22/17; Typed 4.17.23
Works has made and filed with the City Clerk a written report (“Director’s Report”) for fiscal year 2023-24, which provides the basis for the levy of benefit asses sments for the cost of maintenance and operation on all lots or parc els of propert y within the District, and the Director’s Report sets forth the budget, the formula or formulae for the annual assessment levy, a description of each lot or pa rcel of property in the District, Assessor's Parcel Number or other description sufficient to identify the same, the amount of assessment to be levied for fiscal year 2023-24 against each lot or parcel of property, and such other information as will be nec essary or useful in applying the formula or formulae;
WHEREAS, on April 18, 2023 this Council duly considered the Director’s Report and found that each and every part thereof was sufficient and that neither the Director’s Report nor any part thereof requir ed modification , a nd ordered that the Director’s Report shall be open to pu blic inspection;
WHEREAS, Proposition 218 passed on November 5, 1996, added Articles XIIIC and XIIID to the State of California Constitution which requires property owners within the District to annually approve any assessment increase that is more than any previous assessment; WHEREAS, procedures of approval required the preparation of a Director’s Report on how the assessments were prepared and based;
WHEREAS, pursuant to Resolution No. 23-9218 and the provisions of the City Code, notice of hearing any and all protests in relation to the Director’s Report and any of the matters contained therein was given by causing notice of public hearing to be posted at Santa Clara City Hall on April 21, 2023, published in the Santa Clara Weekly, a newspaper of general circulation, on May 24, 2023, and mailed to all property owners in the Maintenance District on April 21, 2023, as provided by the City Code, all as more particularly appears from the cert ificates and affidavits thereof on f ile in the office of the City Clerk of the City, whereupon the hearing on the Report was duly and regularly held at the time and place advertised in the notice and in Resolution No . 23-9218;
Resolution/Assessment Dist 183 Page 3 of 5
Rev. 11/22/17; Typed 4.17.23
WHEREAS, the Director’s Repor t, an d public hearing meeting notice were timely provided to the entities within the District who are responsible for paying the assessments; WHEREAS, for Fiscal Year 2023-24, the assessments are not increasing and therefore, Proposition 218 ballot requirements do not apply;
WHEREAS, persons interested, objecting thereto, filed written protests with the City at or before the time set for hearing, and all persons interested, desiring to be heard were given an opportunity to be heard and all matters and things pe rtaining ther eto we re fully heard and considered by the Council; and
WHEREAS, the Council has remedied and corrected any errors or informalities in the Director’s Report and has revised and corrected any of the acts or determinations of the various C ity officials as contained therein and is fully informed of the contents.

NOW THEREFORE, BE IT F URTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That a weighted vote, based on the assessment to each property, was not needed to approve the proposed annual assessm ents for said District because this year’s assessment is not greater than the greatest previously approved assessment.

2. That all written protests, objections and other written communications were read at a noticed public hearing and all persons desiring to b e h eard were ful ly heard, and that no majority protest exists.

3. T hat the Director’s Report and each and every part thereof contained all the matters and things called for by Resolution No. 5081 and the City Code, including the budget, the formula or formulae for the annual assessment levy, Ass essor's P arcel Num ber or o ther d escription sufficient to identify the same, the amount of the assessment to be levied against each lot or parcel of land in accordance with the formula or formulae, and such other information as will be necessary or useful in applying the formula adopted by the Council.

Resolution/Assessment Dist 183 Page 4 of 5
Rev. 11/22/17; Typed 4.17.23

4. That the Director’s Report and assessment roll, and each of the assessments therein as duly revised and corrected be, and they are hereby approved, confirmed and adopted.

5. That the special benefit assessments shall be levied and collected annually upon the last equalized secured and utility tax rolls upon which ad valorem property taxes are collected. They shall be in addition to all other ad valorem property taxes levied, and shall be collected together with, and not separate therefrom, and enforced in the same manner and by the same persons and at the same time and with the same penalties and interest as are ad valorem property taxes. All laws applicable to the collection and enforcement of the ad valor em property taxes shall be applicable to the special benefit assessment levy, and the assessed lot or parcel of property, if sold for taxes, shall be subject to redemption in the same manner as such real property is redeemed from the sale for ad valorem pr operty taxes, and if not redeemed, shall in like manner pass to the purchaser.

6. That the Director’s Report, together with a certified copy of this Resolution, shall forthwith be delivered to the Director of Finance of this Cit y, w ho shall thereafter deli ver th e Director’s Report to the officer of the County of Santa Clara designated by law to extend ad valorem property taxes upon the tax roll. Proper County officer shall cause to be posted to the tax rolls, in a column provided therefor, the amount of each of the special benefit assessments proposed to be levied and collected for the fiscal year as set forth in the Director’s Report as confirmed.

7. That the City Clerk shall forward a certified copy of this Resolution and D irector’s Report to the City Manag er, Director of Public Works, and Director of Finance of this City and to the officer designated by law to extend ad valorem property taxes upon the tax roll on which they are collected.

8. Constitutionality, severability . If a ny s ection, subsection, sente nce, cla use, p hrase, or word of this r esolution is for any reason held by a court of competent jurisdiction to be unconstitutional or invalid for any reason, such decision shall not affect the validity of the Resolution/Assessment Dist 183 Page 5 of 5
Rev. 11/22/17; Typed 4.17.23
remaining portions of the resolution. The City of Santa Clara, California, hereby declares that it would have passed this resolution and each section, subsection, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more section(s), subs ection(s), sentence(s), clause(s), phrase(s), or word(s) be declared invalid.

9. Effective date. This resolution shall become effective immediately.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CL ARA, CALIFORNIA, AT A REGULAR ME ETING THEREOF HELD ON THE 6 DAY OF JUNE 2023, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST: __________________________

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA

Attachments incorporated by reference:

1. Director’s Report

City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-447 Agenda Date: 6/6/2023

REPORT TO COUNCIL

SUBJECT
Public Hearing: Action on Resolutions Approving Water, Sewer and Recycled Water Amended Rates to be Effective July 1, 2023

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
In November 1996, California voters approved Proposition 218, which amended the State Constitution to establish a new category of fees and charges referred to as “property-related fees and charges” and created new procedural requirements for their adoption. Under these requirements, water, sewer, and recycled water service proposed fees or charges are subject to a written notice and public hearing not less than 45 days after the mailing of the notice, and protest procedure for their approval. At the public hearing, all protests against the proposed fees or charges are tabulated and if protests are presented by a majority of utility customers (50% plus 1), the fees or charges cannot be imposed. If there is not a majority of utility customers protesting the proposed fees or charges, Council can make and act on a motion to approve increases. The required number of protests needed to deny Council the option to approve rate increases is 11,910.

The City updates the rates it charges Santa Clara residents and businesses for water, sewer, and recycled water services on an annual basis. Each of these three utilities is self-sustaining and rates are adopted to pay for revenue requirements associated with operations and maintenance (O&M) costs, capital improvement program (CIP) projects and, when possible and feasible, the funding for reserves associated with the respective utility systems.

Staff is seeking approval of the attached resolutions assigning water and recycled water rates (Attachment 1), and sewer rates (Attachment 2) to be effective July 1, 2023.

The Water & Sewer Utilities Department engaged Black & Veatch Management Consulting, LLC (Black & Veatch) to conduct an ongoing study of water, sewer, and recycled water rates charged to City residents and businesses.

DISCUSSION
In the fall of 2021, the City conducted a competitive procurement, and in December 2021, entered into a new agreement with Black & Veatch for consulting services related to rate setting for the next five (5) years.

As in years past, Black & Veatch conducted a cost-of-service analysis for all three utilities, projected three years of rates and created a ten-year financial plan to fund O&M and capital expenditures with City of Santa Clara Printed on 6/2/2023Page 1 of 4
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23-447 Agenda Date: 6/6/2023
adequate reserves. Black & Veatch also updated the Rate Study (Attachment 3) to reflect funding reserves analysis and financial plans on cost-of-service analyses. The methodology in the rate study allocates cost components of each utility’s operation and capital costs to customers and customer classes within each utility based on their use of the respective utilities.

Water Rates
The potable water rates charged to Santa Clara residents and businesses are primarily driven by wholesale water purchases, O&M costs, and capital improvements for rehabilitation and replacement of aging infrastructure. The San Francisco Public Utilities Commission (SFPUC) voted on May 9, 2023 to raise the rates it charges to its wholesale customers by 9.7% for FY 2023/24. On May 16, 2023, the Santa Clara Valley Water District (Valley Water) Board adopted a 14.5% increase for FY 2023/24. The City’s Water Utility is proposing to complete approximately $20.3 million in CIP projects over the next five years to address aging infrastructure and ensure ongoing water quality standards are met. These costs, including O&M costs, have resulted in the need to propose an 8.7% increase in the potable water rate. For an average residential customer that uses 12 units (1 unit=1 HCF=748 gallons) of water, the monthly water bill will increase by $7.68. In addition, there is a 5.9% average increase in minimum monthly charges for the water meter based on its size.

Sewer Rates
The sewer rates charged to Santa Clara customers are primarily driven by the City’s contribution to the capital and O&M costs at the San José-Santa Clara Regional Wastewater Facility (RWF), of which the City is a co-owner. O&M and capital costs on the City’s collection system are also drivers of sewer rates. The RWF has been undergoing a large rehabilitation/replacement project that may last upwards of 30 years. Santa Clara’s share of this project’s costs is currently budgeted to be approximately $98 million over the next five (5) years. The Sewer Utility issued $50 million in financing in 2020, in the form of a rolling line of credit to mitigate the rate impacts of the RWF capital project and to ensure generational equity as the project is funded; $20 million has been drawn to date. The City is currently working on the competitive process to re-finance that debt in the form of a fixed-rate credit facility and will return to Council in July for consideration on that issuance. The costs associated with the Sewer Utility have resulted in the need to propose a 3.1% increase for single family residential customers. Based on the cost-of-service analysis, multi-family residential customers, will see a proposed 2.7% increase to their sewer rate. Non-residential customers will see a proposed average 8.0% increase to their sewer rates, however the actual increase for individual customers will be based on their customer class.

If proposed rates are adopted, single family residential customers will see their monthly sewer bill increase by $1.46 and multi-family residential customers will see their monthly sewer bill increase by $1.19.

Recycled Water Rates
The recycled water rates charged to City customers are primarily driven by wholesale rates charged by the City of San José through South Bay Water Recycling (SBWR). SBWR’s rates are tied to the groundwater charge levied by Valley Water. Per SBWR’s letter dated May 15, 2023, the rates charged to the City of Santa Clara to purchase recycled water will increase by 15.4%. These costs along with O&M costs, have resulted in the need to propose a 10.0% increase in the recycled water rate. Recycled water is used by non-residential customers for irrigation, dual plumbing, and various industrial processes.

City of Santa Clara Printed on 6/2/2023Page 2 of 4
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23-447 Agenda Date: 6/6/2023

ENVIRONMENTAL REVIEW
The action being considered is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Public Resources Code section 21080(b)(8) and CEQA Guidelines section 15273 as it concerns the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges that are for the purpose of (A) meeting operating expenses, (B) purchasing or leasing supplies, equipment, or materials, (C) meeting financial reserve needs and requirements, or (D) obtaining funds for capital projects necessary to maintain service within existing service areas.

As described above, the proposed rate increases will cover operations and maintenance (O&M) costs, capital improvement program (CIP) projects and the funding of reserves associated with the respective utilities’ systems.

FISCAL IMPACT
The proposed rates are assumed in the FY2023/2024 Proposed Operating Budget. Failure to adopt the proposed rates will result in lower than expected revenues and the need to amend the upcoming budgets by further drawing down reserve funds for the three utilities and to change the ten-year financial outlook for each of the utilities.

COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.

Additionally, On April 11, 2023, which is not less than 45 days before the public hearing, as required by Article XIII D of the California Constitution (Proposition 218), notices were mailed to all 23,817 current utility customers in the City Utility Billing System. Also, staff reached out to utility customers via social media platforms and through the utility rates page on the City’s website.

ALTERNATIVES

1. Adopt the Proposed Resolutions Establishing Water Rate Schedule 2023-01, Recycled Water Rate Schedule 2023-02 and Sewer Rate Schedule S-23

2. Do Not Adopt the Proposed Resolutions Establishing Water Rate Schedule 2023-01, Recycled Water Rate Schedule 2023-02 and Sewer Rate Schedule S-23 and Direct Staff to Return to Council with Necessary Budget Amendments.

RECOMMENDATION
Alternative 1: Adopt the Proposed Resolutions Establishing Water Rate Schedule 2023-01, Recycled Water Rate Schedule 2023-02 and Sewer Rate Schedule S-23 Reviewed by: Gary Welling, Director, Water & Sewer Utilities Approved by: Jōvan D. Grogan, City Manager
City of Santa Clara Printed on 6/2/2023Page 3 of 4
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23-447 Agenda Date: 6/6/2023

ATTACHMENTS

1. Proposed Resolution Establishing Water Rate Schedule 2023-01 & Recycled Water Rate Schedule 2023-02

2. Proposed Resolution Establishing Sewer Rate Schedule S-23

3. Draft 2023 Water and Sewer Rate Study Report by Black & Veatch Management Consulting, LLC City of Santa Clara Printed on 6/2/2023Page 4 of 4
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Resolution/Establishing Water Rate Schedule 2023-01
&Recycled Water Rate Schedule 2023-02
Rev: 11/22/17

Page 1 of 3 ends

RESOLUTION NO. _

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA
ESTABLISHING WATER RATE SCHEDULE 2023-01 AND
RECYCLED WATER RATE SCHEDULE 2023-02 FOR CITY

SERVICE

BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, all water furnished to utility customers by the City of Santa Clara shall be charged, paid for and supplied only in accordance with such applicable schedules, rules and regulations as the City Council shall adopt pursuant to the provision of Section 13.15.020 [entitled "Water Rates to be Determined by City Council"] of "The Code of the City of Santa Clara, California" ("SCCC") and the Rules and Regulations for Water Service of the City of Santa Clara; WHEREAS, Article XIII D of the California Constitution requires that increases to property related fees and charges, including water service rates, be approved by the City Council at a Public Hearing conducted not less than 45 days after mailing notice of the proposed rate increase;
WHEREAS, notice of a Public Hearing to be held on June 6, 2023 was mailed to water utility customers on April 11, 2023, which is more than 45 days prior to the Public Hearing; WHEREAS, the notice was sent to 23,817 utility customers; WHEREAS, the Council has reviewed the Water Rate Schedule 2023-01 and Recycled Water Rate Schedule 2023-02 (the "Rate Schedules") attached and incorporated into this Resolution by reference;
WHEREAS, the amounts shown on the Rate Schedules reflect the actual costs to provide utility services; and,
WHEREAS, on June 6, 2023, the Council conducted a Public Hearing, at which it reviewed all protests regarding the proposed rate increases.
-
Resolution/Establishing Water Rate Schedule 2023-01
&Recycled Water Rate Schedule 2023-02
Rev: 11/22/17

Page 2 of 3 ends

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That based on a tabulation of all the protests received prior to the close of the Public Hearing, XXXX protests were received, which does not constitute a majority of affected water utility customers.

2. In accordance with Article XIIID § 6 of the California Constitution and as set forth in the accompanying Agenda Report, incorporated herein by this reference, the City Council finds:

A. The revenue derived from the Water Rates and Recycled Water Rates, as stated in the attached Rate Schedules, do not exceed the funds required to cover the operating and capital improvement project expenses for the provision of water; B. The revenue derived from the Water Rates and Recycled Water Rates will not be used for any purpose other than the provision of water and recycled water and related capital improvement projects;
C. The Water Rates and Recycled Water Rates will not exceed the proportional cost of the service attributable to each parcel;
D. The Water Rates and Recycled Water Rates are only charged for water service and programs that are currently available;
E. The Water Rates and Recycled Water Rates are not charged for general governmental services.

3. That Water Rate Schedule 2023-01 and Recycled Water Rate Schedule 2023-02, attached to this Resolution and incorporated by this reference, are hereby adopted and shall be effective per Section 4 of this Resolution.

Resolution/Establishing Water Rate Schedule 2023-01
&Recycled Water Rate Schedule 2023-02
Rev: 11/22/17

Page 3 of 3 ends

4. All previously adopted water rate schedules, to the extent that they are inconsistent with those contained herein, are superseded by those charges provided for hereinabove as follows:

Commencing with the billing cycle for water service provided on or after July 1, 2023, and each subsequent billing cycle thereafter as set forth in Water Rate Schedule 2023-01 and Recycled Water Rate 2023-02.

5. Effective date. This resolution shall become effective immediately.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE 6th DAY OF JUNE, 2023, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST:

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA

Attachments incorporated by reference:

1. Water Rate Schedule 2023-01

2. Recycled Water Rate Schedule 2023-02
City of Santa Clara Water Rate Schedule 2023-01 Page 1 of 2

CITY OF SANTA CLARA
WATER RATE SCHEDULE 2023-01
(Replaces Water Rate Schedule 2022-01)
ADOPTED BY RESOLUTION NO. 23-XXX, June 6, 2023

RATE W-1, METERED POTABLE WATER SERVICE

Applicable to all metered potable water service provided by the City of Santa Clara

(1) MONTHLY QUANTITY CHARGES:

All potable water use, $7.97 per Hundred Cubic Feet (HCF). The Monthly Quantity Charge recovers the annual cost to operate the Water Utility, including groundwater charges, treated water purchased from others for resale, and energy for pumping. (2) MINIMUM MONTHLY METER RATES:

The minimum monthly meter rate includes a consumption allowance to recover fixed cost elements and accommodate water considered essential for health and safety.

WATER METER SIZE MINIMUM CHARGE($)
5/8 x 3/4 inch 21.48
1 inch 33.66
1 ½ inch 64.10
2inch 100.64
3inch 198.07
4inch 307.67
6inch 612.14
8 inch 977.49
10inch 1,464.63
12inch 2,058.33
RATE W-2, FIRE SERVICE

(1) MONTHLY FIRE SERVICE CHARGE:

SERVICE SIZE

MONTHLY CHARGE($)
2 inch 2.95
4 inch 16.71
6 inch 49.15
8 inch 104.68
10 inch 188.23
12 inch 304.21
City of Santa Clara Water Rate Schedule 2023-01 Page 2 of 2 (2) SPECIAL CONDITIONS:

Fire Service charges are imposed for maintenance and operation of the metering components, including capital replacement. No charge will be made for water used to extinguish fires or for testing. Any other usage of water through leakage or for general use shall result in the imposition of regular water service rates (RATE W -1) for a minimum of three (3) billing cycles or longer, until such time as illicit use of water through the fire service connection has ceased.

Continued water usage through a fire service is a violation of City's Rules and Regulations and may cause interruption of service.

RATE W-3, CROSS CONNECTION CONTROLS

Applicability - Applicable to all service connections where a public cross connection control device has been required by the City or County Health Department. (1) MONTHLY CHARGE:

SIZE OF SERVICE MONTHLY CHARGE ($)
1 inch 6.73
2 inch 10.78
3 inch 21.55
4 inch 33.67
6inch 67.34
8 inch 107.75
10 inch 161.63
City of Santa Clara Recycled Water Rate Schedule 2023-02 Page 1 of 2

CITY OF SANTA CLARA
RECYCLED WATER RATE SCHEDULE 2023-02
(Replaces Recycled Water Rate Schedule 2022-02)
ADOPTED BY RESOLUTION NO. 23-XXX, June 6, 2023

RATE RW-1, METERED RECYCLED WATER SERVICE

Applicable to all metered service connections served by the City of Santa Clara Recycled Water System, except for those specified recycled water uses described in Rate RW-2.

(1) MONTHLY QUANTITY CHARGES:

All use: $4.53 per Hundred Cubic Feet (HCF).

(2) MINIMUM MONTHLY METER RATES:

The minimum monthly meter rate includes a consumption allowance to recover fixed cost elements and accommodate water considered essential for health and safety.

WATER METER SIZE MINIMUM CHARGE($)
5/8 x 3/4 inch 16.64
1 inch 27.03
1 ½ inch 53.02
2inch 84.21
3inch 167.37
4inch 260.93
6inch 520.82
8 inch 832.68
10inch 1,248.50
12inch 1,755.27
RATE W-2, FIRE SERVICES

Applicable to separate fire services (automatic sprinklers, private fire hydrants, etc.) required by the City of Santa Clara or insurance underwriters.

(1) MONTHLY FIRE SERVICE CHARGE:

SERVICE SIZE

MONTHLY CHARGE($)
2 inch 2.95
4 inch 16.71
6 inch 49.15
8 inch 104.68
10 inch 188.23
12 inch 304.21
City of Santa Clara Recycled Water Rate Schedule 2023-02 Page 2 of 2 (2) SPECIAL CONDITIONS:

Continued water usage through a fire service is a violation of City's Rules and Regulations and may cause interruption of service.

RATE W-3, CROSS CONNECTION CONTROLS

Applicable to all service connections where a public cross connection control device has been required by the City or County Health Department.

(1) MONTHLY CHARGE:

SIZE OF SERVICE MONTHLY CHARGE ($)
1 inch 6.73
2 inch 10.78
3 inch 21.55
4 inch 33.67
6inch 67.34
8 inch 107.75
10 inch 161.63

Resolution No. 23-XXXX/Sewer Rate Schedule (S-23)
Rev: 11/22/17

Page 1 of 3 ends

RESOLUTION NO. ______

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA

ESTABLISHING MONTHLY SEWER SERVICE CHARGES AND
SEWER RATE SCHEDULE S-23

BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, Section 13.10.090, entitled “Rates – Users Within the City”, of "The Code of the City of Santa Clara" (“SCCC"), provides that the City Council may by resolution establish and amend the monthly sewer service charges;
WHEREAS, Article XIII D of the California Constitution requires that utility customers be given a minimum of 45 days notice of any proposed rate increase; WHEREAS, notice of a Public Hearing to be held on June 6, 2023 was mailed to utility customers on April 11, 2023, which is more than 45 days prior to the Public Hearing; WHEREAS, the notice was sent to 23,817 utility customers; WHEREAS, the Council has reviewed the Sewer Rate Schedule S-23 (attached) and incorporated into this Resolution by reference;
WHEREAS, the amounts shown on the Schedule S-23 reflect the actual costs to provide utility services; and,
WHEREAS, on June 6, 2023, the Council conducted a Public Hearing, at which it reviewed all protests regarding the proposed rate increases.

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That based on a tabulation of all protests received prior to the close of the Public Hearing, XX protests were received, which do not constitute a majority of affected utility customers.

2. That, In accordance with Article XIIID § 6 of the California Constitution and as set forth in the accompanying Agenda Report, incorporated herein by this reference:

Resolution No. 23-XXXX/Sewer Rate Schedule (S-23)
Rev: 11/22/17

Page 2 of 3 ends

A. The revenues derived from the Sewer Rates, as stated in the attached Schedule S-23, do not exceed the funds required to cover the operating and capital improvement project expenses for the provision of sewer services;
B. The revenues derived from the Sewer Rates will not be used for any purpose other than the provision of sewer services and related capital improvement projects; C. The Sewer Rates will not exceed the proportional cost of the service attributable to each customer class;
D. The Sewer Rates are only charged for sewer programs that are currently available;
E. The Sewer Rates are not charged for general governmental services.

3. That Sewer Rate Schedule S-23, attached to this Resolution and incorporated by this reference, are hereby adopted and shall be effective per Section 4 of this Resolution.

4. All previously adopted sewer rate schedules, to the extent that they are inconsistent with those contained herein, are superseded by those charges provided for hereinabove as follows:

Commencing with the billing cycle for sewer service provided on or after July 1, 2023, and each subsequent billing cycle thereafter as set forth in Sewer Rate Schedule S-23.

5. Effective date. This resolution shall become effective immediately.

Resolution No. 23-XXXX/Sewer Rate Schedule (S-23)
Rev: 11/22/17

Page 3 of 3 ends

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE 6th DAY OF JUNE, 2023, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST:

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA

Attachments incorporated by reference:

1. Sewer Rate Schedule S-23
Sewer Rate Schedule S-23 Page 1 of 3
SCHEDULE S-23

MONTHLY SEWER SERVICE CHARGES
EFECTIVE JULY 1, 2023
(REPLACES SCHEDULE S-22)

A. Residential Users:

Single Family dwelling units including accessory dwellings: $48.28 per month

Multiple dwelling unit structures including, but not limited to, duplexes, retirement homes, mobile home courts, college dormitories, and apartments: $45.88 per month per dwelling unit

B. Miscellaneous Users:

For all users other than residential users and major commercial and industrial users, the monthly service charges per month shall be as follows, depending on the appropriate North American Industrial Classification System (NAICS) class:

NAICS CLASS

DESCRIPTION

SERVICE
CHARGE
$/HCF1
SEWAGE

VOLUME AS A

PERCENTAGE

OF METERED

WATER USE
111998, 311XXX, 3121XX Food and Kindred Products $13.45 70% 322:XXX Paper $13.82 80%
211112, 325:XXX Industrial Chemical $10.02 90%
332812, 332813 Metal Plating $4.50 90%
332XXX, 333:XXX,
3341 IX, (excepting 332812,
332813, 333314)

Machinery Manufacturers

$8.16

90%
334XXX, 335XXX, 33632X
(excepting 33451X, 33411X,
334611)

Electric & Electronic Equip.

$5.55

90%
4411XX, 4412XX, 4471XX Auto Dealers & Service Station $6.76 90% 722110, 722410 Restaurants $13.70 90%
721XXX Motels & Hotels $7.09 90%
561740, 811490, 8123XX Laundries $6.02 90%

1 References the volume of sewage discharged. HCF=one hundred cubic feet=748 gallons Sewer Rate Schedule S-23 Page 2 of 3
811l XX, 812930 Repair Shops & Car Washes $5.15 90%
713:XXX Amusement Parks $6.15 90%
621:XXX, 622XXX,
623:XXX Hospitals & Convalescent Homes $6.72 90%
611:XXX Schools & Colleges $6.54 24%
8131XX Churches $5.55 35%
Commercial/Industrial/Miscellaneous not otherwise specified in this schedule of charges
$5.87 90%

In no case shall the minimum charge be less than $48.28 per month.

C. Major Commercial and Industrial Users are those having (1) a sewage discharge of at least 25,000 gallons per day, or (2) having a daily discharge which is intermittent or irregular in strength, amount or nature. Major Commercial and Industrial Users shall have monthly sewer charges, which may consist of any or all of the following charges:

Annual Capital Cost Recovery:

Volume: $1,147,617 per million gallons per day of flow capacity BOD
2: $85,145 per 1,000 pounds per day of BOD removal capacity SS3: $77,042 per 1,000 pounds per day of SS removal capacity NH3 4: $466.740 per 1,000 pounds per day of NH 3 removal capacity

Operating and Maintenance Cost Recovery:

Volume: $3,315 per million gallons
BOD: $502 per 1,000 pounds
SS: $625 per 1,000 pounds
NH3: $5,125 per 1,000 pounds

2 Biochemical Oxygen Demand: This is the quantity of oxygen utilized in the biological oxidation of organic matter under standard laboratory conditions for 5 days at a temperature of 20 degrees Centigrade. The determination of the charge for BOD is as follows: BOD in parts per million x 8.34 x volume in million gallons = pounds of BOD. 3 Suspended Solids – That which either floats on the surface or is in suspension in sewage and which is determined by laboratory filtering. The determination of the charge for Suspended Solids is as follows: SS in parts per million x

8.34 x volume in million gallons = pounds of Suspended Solids

4 Ammonia is that form of nitrogen in the tri-negative oxidation state which is chemically definable as the compound NH3. The determination of the charge for Ammonia is as follows: NH 3 in parts per million x 8.34 x volume in million gallons = pounds of Ammonia.

Sewer Rate Schedule S-23 Page 3 of 3
The volume of sewage shall be based upon a fixed percentage of water usage noted, or based on standard methods acceptable to the Director.

The City may require the installation of special metering and sampling devices whenever the Director deems that such devices are required to determine the volume and/or strength of the sewage discharge. A customer may also request the installation of a special metering device.

Whenever special metering devices are installed, they shall be devices approved by the Director, and the cost of furnishing and installing said devices shall be borne by the customer.

DRAFT

WATER AND SEWER RATE STUDY

BLACK & VEATCH PROJECT NO. 410918

PREPARED FOR

City of Santa Clara, CA
6 JUNE 2023

~ . BLACK&VEATCH
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents i

Table of Contents
Legal Notice ............................................................................................................................................ 1

1.0 Executive Summary ................................................................................................................. 1-1

1.1 Water System......................................................................................................................... 1-1

1.2 Recycled Water System ........................................................................................................ 1-1

1.3 Sewer System ........................................................................................................................ 1-1

1.4 Financial Plan ........................................................................................................................ 1-2

1.4.1 Water Utility ........................................................................................................... 1-2

1.4.2 Recycle Water Utility ............................................................................................. 1-3

1.4.3 Sewer Utility ........................................................................................................... 1-4

1.5 Adequacy of Existing Rates to Meet Costs of Service ........................................................ 1-5

1.6 Cost of Service Analysis ....................................................................................................... 1-5

1.7 Rate Design ............................................................................................................................ 1-6

1.7.1 Water and Recycled Water Utilities ...................................................................... 1-6

1.7.2 Sewer Utility ........................................................................................................... 1-8 Water and Recycled Water Utilities ....................................................................................................... 1-1

2.0 Revenue and Revenue Requirements ....................................................................................... 2-1

2.1 Customer and Water Consumption ...................................................................................... 2-1

2.1.1 Customer Classes ................................................................................................. 2-1

2.1.2 Minimum Bills ........................................................................................................ 2-1

2.1.3 Water Consumption .............................................................................................. 2-2

2.2 Revenue under Existing Rates .............................................................................................. 2-3

2.3 Other Revenue ....................................................................................................................... 2-5

2.4 Operating and Maintenance Expenses ................................................................................ 2-5

2.5 Capital Improvement Program ............................................................................................. 2-6

2.5.1 Capital Improvement Financing Plan ................................................................... 2-7

2.6 Transfers ................................................................................................................................ 2-8

2.7 Reserves ................................................................................................................................. 2-8

2.8 Projected Operating Results ................................................................................................. 2-9

3.0 Cost of Service Analysis .......................................................................................................... 3-1

3.1 Functional Cost Components ............................................................................................... 3-2

3.2 Allocation to Cost Components ........................................................................................... 3-3

3.2.1 System Base, Max Day, and Max Hour Allocations ............................................ 3-3

3.2.2 Allocation of Operating and Maintenance Expenses .......................................... 3-4

3.2.3 Allocation of Capital Investments ........................................................................ 3-5

3.3 Units of Service ...................................................................................................................... 3-5

3.4 Cost of Service Allocations ................................................................................................... 3-6

3.4.1 Units Costs of Service ........................................................................................... 3-6

3.4.2 Distribution of Costs of Service to Customer Classes ....................................... 3-6 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents ii

4.0 Rate Design ............................................................................................................................. 4-1

4.1 Existing Rates ........................................................................................................................ 4-1

4.2 Proposed Rates ..................................................................................................................... 4-1

4.2.1 Monthly Service Charge ........................................................................................ 4-1

4.2.2 Fire Service ............................................................................................................ 4-3

4.2.3 Cross Connection .................................................................................................. 4-3

4.2.4 Consumption Charge ............................................................................................ 4-4

4.3 Typical Monthly Costs under Proposed Charges ................................................................ 4-5

4.4 Neighboring Water Utilities ................................................................................................... 4-5 Sewer Utility ......................................................................................................................................... 4-1

5.0 Revenue and Revenue Requirements ....................................................................................... 5-1

5.1 CUSTOMER AND WATER CONSUMPTION PROJECTIONS ................................................ 5-1

5.1.1 Customer Classes ................................................................................................. 5-1

5.1.2 Equivalent Dwelling Units ..................................................................................... 5-1

5.1.3 Minimum Bills ........................................................................................................ 5-2

5.1.4 Contributed Sewage Flow ..................................................................................... 5-2

5.1.5 Major Users ........................................................................................................... 5-3

5.2 Revenue under Existing Rates .............................................................................................. 5-4

5.3 Other Revenue ....................................................................................................................... 5-6

5.4 Operating and Maintenance Expenses ................................................................................ 5-6

5.5 Debt Service Requirements................................................................................................... 5-7

5.6 Capital Improvement Program ............................................................................................. 5-7

5.6.1 Capital Improvement Financing Plan ................................................................... 5-8

5.7 Transfers ................................................................................................................................ 5-8

5.8 Reserves ................................................................................................................................. 5-9

5.9 Projected Operating Results ................................................................................................. 5-9

6.0 Cost of Service Analysis .......................................................................................................... 6-1

6.1 Functional Cost Components ............................................................................................... 6-1

6.2 Allocation to Cost Components ........................................................................................... 6-2

6.2.1 Volume and Strength Allocations ........................................................................ 6-2

6.2.2 Allocation of Operating and Maintenance Expenses .......................................... 6-2

6.2.3 Allocation of Capital Investments ........................................................................ 6-3

6.3 Units of Service ...................................................................................................................... 6-3

6.4 Cost of Service Allocations ................................................................................................... 6-4

6.4.1 Units Costs of Service ........................................................................................... 6-4

6.4.2 Distribution of Costs of Service to Customer Classes ....................................... 6-4

7.0 Rate Design ............................................................................................................................. 7-1

7.1 Existing Rates ........................................................................................................................ 7-1

7.2 Proposed Rates ..................................................................................................................... 7-1

7.2.1 Monthly Service Charge ........................................................................................ 7-1 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents iii

7.2.2 Consumption Charge ............................................................................................ 7-2

7.2.3 Major Users ........................................................................................................... 7-2

7.3 Typical Monthly Costs under Proposed Charges ................................................................ 7-3

7.4 Neighboring Sewer Utilities ................................................................................................... 7-3 Appendix A – Ten-Year Financial Plan ................................................................................................. 7-1 Water Utility ......................................................................................................................................... 7-1 Recycled Water Utility ......................................................................................................................... 7-2 Sewer Utility ......................................................................................................................................... 7-3

LIST OF TABLES
Table 1-1 Proposed Revenue Adjustments ......................................................................................... 1-5 Table 1-2 Proposed Three-Year Water Rate Schedule ........................................................................ 1-7 Table 1-3 Proposed Three-Year Recycled Water Rate Schedule........................................................ 1-8 Table 1-4 Proposed Three-Year Sewer Rate Schedules ..................................................................... 1-9 Table 2-1 Minimum Bills ....................................................................................................................... 2-1 Table 2-2 Billed Water Consumption ................................................................................................... 2-3 Table 2-3 Existing Water and Recycled Water Rates .......................................................................... 2-4 Table 2-4 Projected Revenue under Existing Rates ............................................................................ 2-5 Table 2-5 O&M Expenses ...................................................................................................................... 2-6 Table 2-6 Capital Improvement Projects ............................................................................................. 2-7 Table 2-7 Construction Fund Financing Plan (Water) ......................................................................... 2-7 Table 2-8 Construction Fund Financing Plan (Recycled Water) .......................................................... 2-8 Table 2-9 Operating Fund (Water) ...................................................................................................... 2-12 Table 2-10 Operating Fund (Recycled Water) ...................................................................................... 2-13 Table 3-1 Cost of Service Revenue from Rates (Water) ..................................................................... 3-1 Table 3-2 Cost of Service Revenue from Rates (Recycled Water) ..................................................... 3-2 Table 3-3 Allocation of O&M Expenditures (Water) ............................................................................ 3-4 Table 3-4 Allocation of O&M Expenditures (Recycled Water) ............................................................ 3-4 Table 3-5 Allocation of Capital Costs (Water) ..................................................................................... 3-5 Table 3-6 Allocation of Capital Costs (Recycled Water) ..................................................................... 3-5 Table 3-7 Units of Service (Water and Recycled Water) ..................................................................... 3-1 Table 3-8 Units Cost of Service (Water) .............................................................................................. 3-1 Table 3-9 Distribution of Costs to Customer Classes (Water) ........................................................... 3-2 Table 3-10 Units Cost of Service (Recycled Water) .............................................................................. 3-3 Table 3-11 Distribution of Costs to Customer Classes (Recycled Water) ........................................... 3-3 Table 4-1 Costs within the Minimum Monthly Service Charge for FY 2024 (Water) ........................ 4-1 Table 4-2 Proposed Minimum Monthly Service Charge (Water) ........................................................ 4-2 Table 4-3 Costs within the Minimum Monthly Service Charge for FY 2024 (Recycled Water) ..................................................................................................................................... 4-2 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents iv

Table 4-4 Proposed Minimum Monthly Service Charge (Recycled Water)......................................... 4-2 Table 4-5 Costs within the Fire Service Charge for FY 2024 .............................................................. 4-3 Table 4-6 Proposed Fire Service Charge .............................................................................................. 4-3 Table 4-7 Costs within the Cross-Connection Charge for FY 2024 ................................................... 4-4 Table 4-8 Proposed Cross Connection Charge ................................................................................... 4-4 Table 4-9 Proposed Consumption Charges ......................................................................................... 4-4 Table 4-10 Typical Monthly Bill (Water) .................................................................................................. 4-5 Table 4-11 Typical Monthly Bill (Recycled Water) .................................................................................. 4-5 Table 5-1 EDUs ...................................................................................................................................... 5-2 Table 5-2 Minimum Monthly Service Bills ........................................................................................... 5-2 Table 5-3 Contributed Sewage Flow .................................................................................................... 5-3 Table 5-4 Major Users ............................................................................................................................ 5-4 Table 5-5 Existing Sewer Rates ............................................................................................................. 5-5 Table 5-6 Projected Revenue under Existing Rates ............................................................................. 5-6 Table 5-7 O&M Expenses ....................................................................................................................... 5-7 Table 5-8 Long-Term Debt Service ........................................................................................................ 5-7 Table 5-9 Capital Improvement Projects .............................................................................................. 5-8 Table 5-10 Construction Fund Financing Plan ....................................................................................... 5-8 Table 5-11 Operating Fund (Sewer) ...................................................................................................... 5-12 Table 6-1 Cost of Service Revenue from Rates .................................................................................... 6-1 Table 6-2 Allocation of O&M Expenditures ........................................................................................... 6-3 Table 6-3 Allocation of Capital Costs ................................................................................................... 6-3 Table 6-4 Units of Service ...................................................................................................................... 6-1 Table 6-5 Units Cost of Service ............................................................................................................. 6-1 Table 6-6 Distribution of Costs to Customer Classes ......................................................................... 6-1 Table 7-1 Proposed Monthly Service Charge ....................................................................................... 7-1 Table 7-2 Proposed Consumption Charges ......................................................................................... 7-2 Table 7-3 Proposed Major User Charges.............................................................................................. 7-3 Table 7-4 Typical Monthly Bill ............................................................................................................... 7-3

LIST OF FIGURES
Figure 1-1 Water Operating Cashflow .................................................................................................... 1-3 Figure 1-2 Recycled Water Operating Cash Flow ................................................................................. 1-4 Figure 1-3 Sewer Operating Cash Flow .................................................................................................. 1-5 Figure 2-1 Water Sales ........................................................................................................................... 2-2 Figure 2-2 Status Quo Operating Cash Flow (Water) ........................................................................... 2-9 Figure 2-3 Status Quo Operating Cash Flow (Recycled Water) ......................................................... 2-10 Figure 2-4 Water Operating Cash Flow ............................................................................................... 2-14 Figure 2-5 Recycled Water Operating Cash Flow ............................................................................... 2-14 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents v

Figure 4-1 Comparison to Neighboring Water Utilities ......................................................................... 4-6 Figure 5-1 Status Quo Operating Cash Flow ....................................................................................... 5-10 Figure 5-2 Sewer Operating Cash Flow ................................................................................................ 5-13 Figure 7-1 Comparison to Neighboring Sewer Utilities ......................................................................... 7-4

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Legal Notice LN-1

Legal Notice
Black & Veatch has prepared this report for the City, and it is based on information not within the control of Black & Veatch. The City has not requested Black & Veatch to make an independent analysis, verify the information provided to us, or render an independent judgment of the validity of the information provided by others. Because of this, Black & Veatch cannot, and does not, guarantee the accuracy thereof to the extent that such information, data, or opinions were based on information provided by others.

In conducting these analyses and in forming an opinion of the projection of future fi nancial operations summarized in this report, Black & Veatch made certain assumptions on the conditions, events, and circumstances that may occur in the future. The methodology utilized in performing the analyses follows generally accepted practices for such projections. Such assumptions and methodologies are reasonable and appropriate for the purpose for which they are used. While we believe the assumptions are reasonable and the projection methodology valid, actual results may differ materially from those projected, as influenced by the conditions, events, and circumstances that occur. Such factors may include the utilities’ ability to execute the capital improvement program as scheduled and within budget, regional climate and weather conditions affecting the demand for water, discharge of sewage flow, and adverse legislative, regulatory, or legal decisions (including environmental laws and regulations) affecting the utilities’ ability to manage the system and meet water quality requirements.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-1

1.0 Executive Summary
The City of Santa Clara (City) commissioned Black & Veatch Management Consulting, LLC (Black & Veatch) to perform an update of the Water and Sewer Rate Study (Study) for its Water, Recycled Water, and Sewer Utilities. The Study included the development of a three-year financial plan, a cost-of-service analysis, and the design of rates. In addition, a ten-year financial plan was developed to provide the City with a high-level view of each utility’s operations. The specific objectives of the Study were to:
 Evaluate the adequacy of projected revenues under existing rates to meet projected revenue requirements.
 Develop sound financial plans for the utilities covering a three and ten-year period for both ongoing operations and planned capital improvements.
 Allocate the utilities’ projected revenue requirements to the various customer classes in accordance with their respective service requirements.
 Develop a suitable rate schedule that produces revenues adequate to meet financial needs while recognizing customer costs of service and regulatory considerations such as Proposition 218 and applicable judicial decisions.

1.1 Water System
The Water Utility provides water services to approximately 26,000 residential, commercial, irrigation, educational, and agricultural customers. The City obtains potable water from three primary sources: local groundwater, surface water from the Santa Clara Valley Water District (Valley Water) and imported water from the Hetch Hetchy watershed through the San Francisco Public Utilities Commission (SFPUC). The water system infrastructure consists of 335 miles of transmission and distribution mains, 7 storage tanks totaling 28.8 million gallons of storage capacity, 19 active wells, and 3 booster pump stations.

1.2 Recycled Water System
The Recycled Water Utility, operating since 1989, provides recycled water services to ove r 361 commercial, irrigation, and industrial customers. The City obtains recycled water from South Bay Water Recycling. The recycled water comes from the San Jose-Santa Clara Regional Wastewater Facility (RWF), an advanced tertiary treatment facility located in San Jose, of which the City is a co-owner. The recycled water infrastructure within the City limit boundary mainly consists of 33miles of recycled water pipelines.

A portion of the recycled water from the RWF supplies the Valley Water’s Silicon Valley Advanced Water Purification Center for advanced treatment (microfiltration, reverse osmosis, and advanced oxidation) to create a mix of high-quality recycled water that is blended back into the recycled water system.

1.3 Sewer System
The Sewer Utility provides sewer services to approximately 26,000 residential, commercial, industrial, and municipal customers. Services include the construction and maintenance of the sewer system and installing sewer lateral clean-outs at the property line. Sanitary sewer flows in the City are collected and transported through more than 288 miles of sewer main by way of six pumping stations to the San Jose - Santa Clara Regional Wastewater Facility. The RWF is a regional treatment facility that receives waste from seven agencies in Santa Clara County and can treat 167 million gallons a day (MGD) of liquid waste.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-2

1.4 Financial Plan
The City operates the utilities as individual self-supporting enterprises. Therefore, the utilities must develop financial plans that provide sufficient revenues to meet all operation and maintenance expenses, water purchases, wastewater treatment, debt service requirements, capital improvements funded from current revenues, and other expenditures.

The Study develops financial plans that project operating revenue, expenses, and capital financing costs for the utilities over a ten-year planning period beginning July 1, 2023 and ending June 30, 2033. This report will focus on a three-year planning period for discussion, beginning July 1, 2023 and ending June 30, 2026. The full ten-year financial plans can be found in Appendix A.

The financial plans project future rate revenues under existing rates, operations, and maintenance (O&M) expenses, principal and interest expense on debt, transfers, and capital improvement program (CIP) requirements. In the projection of rate revenues, annual projections of customers and water consumption rely upon the City’s historical data and estimates of growth. In addition, the Water Utility’s forecast incorporates efforts to continue to meet the conservation goals as established by the State Senate Bill 7x- 7 (SB7x-7) and the City’s Water Shortage Contingency Plan.

On July 12, 2021, the City declared a Drought Emergency and moved into Stage 2 of the Water Shortage Contingency Plan. It amended the City’s Water Use Rules and Regulations, calling for an ongoing voluntary 20% reduction based on 2013 water usage. The City took this action as of result of Valley Water’s action on June 9, 2021, which called for a mandatory 15% reduction in water usage countywide. 1 With water conservation restrictions in place and despite the growth projections, the Water Utility will continue to be under the conservation levels set forth by SB7x-7. On May 9, 2023, the City Council took action to terminate the Drought Emergency that had been declared, but also took action to remain in Stage 2 of the Water Shortage Contingency Plan to align with state actions and to encourage water conservation as a way of life in Santa Clara. Council also took action to call for a 15% voluntary reduction in water usage to align with Valley Water.

1.4.1 Water Utility
The Water Utility’s revenue requirements are summarized below:
 Operation and Maintenance Expenses: The Water Utility anticipates O&M expenses to increase from $56.2M in FY 2024 to $64.6M in FY 2026. Water production and water purchases account for most of this increase, representing an average of 64.4% of O&M expenses.  Debt Service: The Water Utility has no existing debt service, and no future debt is planned.  Capital Improvements: The Water Utility plans to execute an average of $ 4.5M per year in capital projects from FY 2024 to FY 2026.
 Reserves: The Water Utility plans to continue funding the operating fund reserve, construction fund reserve, rate stabilization fund reserve, and pension stabilization reserve. ● The operating fund reserve is to help cover fluctuations in day-to-day expenses. The scheduled target is 90 days of O&M expenses.

1 On March 28, 2022, Governor Newsom called on local water suppliers to move to level 2 of their Water Shortage Contingency Plans. Valley Water had implemented level 2 in June of 2021; therefore, the water projections already incorporate a level of conservation. Any further restrictions are not part of the baseline analysis.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-3

● The construction fund reserve is to help maintain enough funds on hand to help mitigate unexpected capital costs. The scheduled target is 12-months of the following year’s CIP. ● The rate stabilization fund reserve is to help mitigate future increases in drought- stricken years. The scheduled target is 10% of the prior year’s rate revenues. ● The pension fund reserve is to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPERS rates and negotiated pay increases.

The Water Utility is proposing revenue adjustments to allow it to operate the enterprise on a revenue - neutral basis and meet reserve targets, as shown in Figure 1-1.

Figure 1-1 Water Operating Cashflow

1.4.2 Recycle Water Utility
The Recycled Water Utility’s revenue requirements are summarized below:
 Operation and Maintenance Expenses: The Recycled Water Utility anticipates O&M expenses to increase from $7.9M in FY 2024 to $10.1M in FY 2026. Recycled water purchase costs constitute most of the increase, averaging 86.2% of O&M expenses.
 Debt Service: The Recycled Water Utility has no existing debt service, and no future debt is planned.
 Capital Improvements: The Recycled Water Utility plans to execute an average of $5 3.9k per year in capital projects from FY 2024 to FY 2026.
 Reserves: The City plans to continue funding the operating fund reserve, construction fund reserve, rate stabilization fund reserve, and pension stabilization reserve. ● The operating fund reserve is to help cover fluctuations in day-to-day expenses. The scheduled target is 90 days of O&M expenses.
● The construction fund reserve is to help maintain enough funds on hand to help mitigate unexpected capital costs. The scheduled target is 12-months of the following year’s CIP. $80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
so
- O&M
--- ReJenue
Water Utility - Ope rating fund
20 24 2025 2026
- Debt Service - Capit al Projects - R ci:e St abl ilci:ion -e-- Cash Balance -e, Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-4

● The rate stabilization fund reserve is to help mitigate future increases in drought-stricken years. The scheduled target is 10% of the prior year’s rate revenues. ● The pension fund reserve is to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPERS rates and negotiated pay increases
The Recycled Water Utility is proposing revenue adjustments and drawing down on reserves to allow it to operate the enterprise on a revenue-neutral basis and meet reserve targets, as shown in Figure 1-2.

Figure 1-2 Recycled Water Operating Cash Flow

1.4.3 Sewer Utility
The Sewer Utility’s revenue requirements are summarized below:
 Operation and Maintenance Expenses: The Sewer Utility anticipates O&M expenses to increase from $30.1M in FY 2024 to $32.1M in FY 2026. RWF-related costs represent an average of 63.0% of O&M expenses.
 Debt Service: The Sewer Utility anticipates an average debt service payment of $2.8M per year from FY 2024 to FY 2026 associated with existing and proposed debt issuances. The City anticipates no debt issuances from FY 2024 to FY 2026.
 Capital Improvements: The Sewer Utility plans to execute an average of $ 17.0M per year in capital projects from FY 2024 to FY 2026.
 Reserves: The Sewer Utility plans to continue funding the operating fund re serve, construction fund reserve, rate stabilization fund reserve, and pension stabilization reserve. ● The operating fund reserve is to help cover fluctuations in day-to-day expenses. The scheduled target is 90 days of O&M expenses.
● The construction fund reserve is to help maintain enough funds on hand to help mitigate unexpected capital costs. The scheduled target is 12-months of the following year’s City CIP and 6-months of the following year’s SJSCRWF CIP.
$12.,000,000
$10,000,000
SS,000,000
$6,000,000
$4,000,000
$2.,000,000
so
- O&M
--- Re.ienue
Recycled Water Utility - Operating Fund
--

2.02.4 2.025 2.02.6
- Debt Service - Capital Projects - Ra:e Stcb ilil.a:ion -.-- Cash Balance ....,.. Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-5

The Sewer Utility is proposing revenue adjustments and drawing down on reserves to allow it to operate the enterprise on a revenue-neutral basis and meet reserve targets, as shown in Figure 1-3.

Figure 1-3 Sewer Operating Cash Flow

1.5 Adequacy of Existing Rates to Meet Costs of Service Based on the financial plans, Black & Veatch recommends the revenue adjustments shown in Table 1-1 to meet the projected revenue requirements for FY 2024 to FY 2026. These do not represent proposed rate increases to customers. Rather, these represent the overall revenue increases the utilities need to meet their overall obligations and maintain current service levels.

Table 1-1 Proposed Revenue Adjustments

1.6 Cost of Service Analysis
The cost-of-service analysis allocates the costs to the various customer classes of service in a fair and equitable manner. The methodologies used in the Study are specific to the respective utility operations.

The following is a brief description of the methodologies.

FY 2024 July 8.35% 10.00% 6.25%
FY 2025 July 9.00% 11.00% 9.00%
FY 2026 July 9.00% 11.00% 9.00%
Recycled
Water
Sewer
UtilityFiscal Year
Water
Utility
Effective
Month
$60,000,000
$50,000,000
.$40,000,000
$30,000,000
$20,000,000
$10,000,000
so
- O&M
--- Re.ienue
Sewer Utility - Operating Fund
---
2024 2025, 2026
- Debt Service - Capital Projects - R ci:e St ibililci:ion -.-- Cash Balance ....,.. Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-6

The water and recycled water cost-of-service allocation performed in this Study uses the Base-Extra Capacity Method endorsed by the American Water Works Association (AWWA) Principles of Water Rates, Fees, and Charges, M1 (M1) manual. Under cost-of-service principles, costs are allocated to the different customer classes in proportion to their water system use. As recommended by AWWA, Black & Veatch distributed functional costs to the base (average load conditions), extra capacity (peaking), and customer-related parameters. This allocation methodology produces unit costs for allocation to individual customer classes based on the projected customer service requirements.

The sewer cost-of-service allocation performed in this Study follows the Functional Cost Allocation Method endorsed by the Water Environment Federation (WEF) Financing and Charges for Wastewater Systems, Manual of Practice 27 (MoP27) manual. Like the methodology used for water systems, the sewer cost of service analysis allocates costs to the different customer classes in proportion to their use of the sewer system. As recommended by WEF, Black & Veatch distributed functional costs to volume, strength, and customer-related parameters. This allocation methodology produces unit costs for allocation to individual customer classes based on the projected customer service requirements.

1.7 Rate Design
The Right to Vote on Taxes Act, also known as Proposition 218, was passed by California voters in 1996 and added Article XIIIC and Article XIIID to the California Constitution. These articles provide the regulatory framework that guides and informs the rate-setting process. The cost-of-service analyses provide the cost nexus for the proposed rate structures. The regulatory framework helps ensure cost recovery is proportionate to the cost of providing the service.

1.7.1 Water and Recycled Water Utilities
To minimize impacts, retain simplicity, and ensure the reasonable stability of revenue, Black & Veatch recommends the following rate structure.
 Monthly Service Charge: The Water and Recycled Water Utilities should retain the minimum monthly service charge based on meter sizes for all customer classes. The minimum monthly service charge includes a minimum consumption allowance and recovers portions of fixed cost elements such as operating and capital components, meter maintenance and services, meter reading, issuing bills, and maintenance and capacity costs associated with public fire prote ction.

The minimum consumption allowance accommodates water considered essential for health and safety.
 Consumption Charge: The Water and Recycled Water Utilities should maintain the uniform consumption charge for all customer classes. The consumption charge recovers costs associated with the base and extra capacity demands.
 Fire Service Charge: The Water Utility should continue to utilize the fire service charge based on meter size for private fire service connections. The fire service charge will recover maintenance and capacity costs associated with private fire protection costs.  Cross Connection Charge: The Water Utility should continue to utilize the cross -connection charge based on meter size for backflow connections. The cross-connection charge will recover the costs of maintenance associated with backflow devices.

Table 1-2 summarizes the recommended three-year rate schedules for all Water Utility components.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-7

Table 1-2 Proposed Three-Year Water Rate Schedule

Table 1-3 summarizes the recommended three-year rate schedules for all Recycled Water Utility components.

Table 1-3 Proposed Three-Year Recycled Water Rate Schedule

1.7.2 Sewer Utility
To minimize impacts, retain simplicity, and ensure the reasonable stability of revenue, Black & Veatch recommends the following rate structure.
 Monthly Service Charge: The Sewer Utility should retain the monthly service charge based on equivalent dwelling units (EDUs) for all residential customer classes. In addition, the monthly service charge serves as the base amount, or minimum, for all non-residential customer classes.  Consumption Charge: The Sewer Utility should retain its uniform consumption charges for each non-residential customer class. The recommended rate structure should be based on customer class.
 Major Commercial and Industrial Users: The Sewer Utility should retain the major commercial and industrial user charge for customers with high discharge quantities and/or high strength loadings.

Table 1-4 summarizes the recommended three-year rate schedules for all Sewer Utility components.

Proposed
Customer Class FY 2 024 FY 2025 FY 2026
Minimum Monthly Meter Rates ($/Month) $/month $/month $/month 5/8" x 3/4" 16.64 18.28 20.23 1" 27.03 29.78 33.02
1-1/2" 53.02 58.53 64.99
2" 84.21 93.03 103.36
3" 167.37 185.04 205.69
4" 260.93 288.55 320.80
6" 520.82 576.08 640.55
8" 832.68 921.11 1,024.26
10" 1,248.50 1,381.16 1,535.87
12" 1,755.27 1,941.83 2,159.39
Consumption Charges ($/HCF)
General Customers 4.53 5.03 5.58 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-9

Table 1-4 Proposed Three-Year Sewer Rate Schedules

Line Proposed
No. Customer Class FY 2024 FY 2025 FY 2026
Monthly Service Charge ($/EDU) $/month $/month $/month
1 Single Family 48.28 53.06 57.82
2 Multi-Family 45.88 50.38 54.90
Minimum Commercial Bill Charge ($/Month $/month $/month $/month 3 All Customers 48.28 53.06 57.82
Commodity Charge ($/HCF) $/HCF $/HCF $/HCF
1 Amusement Parks 6.15 6.53 7.15
2 Auto Dealers & Service Station 6.76 7.30 7.96
3 Churches 5.55 5.87 6.44
4 Com/Ind/Misc 5.87 6.22 6.82
5 Electric & Electronic Equip. 5.55 5.80 6.40
6 Food and Kindred Products 13.45 15.27 16.31
7 Hospitals & Convalescent Homes 6.72 7.22 7.87
8 Industrial Chemical 10.02 11.14 12.00
9 Laundries 6.02 6.39 7.00
10 Machinery Manufacturers 8.16 8.99 9.72
11 Metal Plating 4.50 4.63 5.13
12 Motels & Hotels 7.09 7.66 8.33
13 Paper 13.82 15.70 16.77
14 Repair Shops & Car Washes 5.15 5.52 6.01
15 Restaurants 13.70 15.57 16.63
16 Schools & Colleges 6.54 7.02 7.66
Major Commercial and Industrial Users
Operating and Maintenance Cost Recovery
1 Volume ($/MG) 3,314.83 3,810.64 4,219.49
2 BOD ($/1,000 lbs) 501.88 575.41 635.86
3 SS ($/1,000 lbs) 625.18 716.78 792.12
4 NH3 ($/1,000 lbs) 5,124.55 5,875.81 6,493.18
Annual Capital Cost Recovery
5 Volume ($/MGD) 1,147,617 1,029,684 1,145,855
6 BOD ($/1,000 lbs/day) 85,145 113,507 105,097
7 SS ($/1,000 lbs/day) 77,042 97,947 91,665
8 NH3 ($/1,000 lbs/day) 466,740 556,410 528,615
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Water and Recycled 2-1

Water and Recycled Water Utilities

2.0 Revenue and Revenue Requirements
To meet the costs associated with providing water services to its customers, the Water and Recycled Water Utilities derive revenue from a variety of sources, including water user charges (rates), developer contributions, solar water heating, interest earned from the investment of available funds, engineering fees, and other miscellaneous revenues. Both utilities are constantly looking for ot her sources of revenue, such as grants, to fund infrastructure investments. Black & Veatch has projected the level of future revenue generated in the Study through an analysis of historical and future system growth in terms of the number of bills and water consumption. This section also projects the expenses, or revenue requirements, necessary to operate and maintain the system, invest in capital improvements, make debt service payments, and cover other water and recycled water systems expenses.

2.1 Customer and Water Consumption

2.1.1 Customer Classes
The Water Utility’s customer base includes both residential and non-residential accounts. The City has three distinct customer classes: General Customer, Fire Service, and Cross Connection.

The Recycled Water Utility’s customers are mainly non-residential. All Recycled Water customers are in the General Customer class.

2.1.2 Minimum Bills
The City provides potable water services to approximately 26,000 customers and recycled water services to 361 customers. All customers connected to the water and recycled water systems do so through metered connections. The City bills customers based on water consumption, but several bills do not meet the consumption allowance identified by meter size. Therefore, the City refers to these bills as minimum monthly service bills. Since the City bills customers based on minimum bills generated, the analysis included a review of historical bill patterns for customers and anticipated growth within the City. The projected total number of bills is expected to increase by an average of 0.3% per year for the Water Utility and an average of 1.6% for the Recycled Water Utility.

Table 2-1 summarizes the projected number of minimum bills for the Water and Recycled Water Utilities.

Table 2-1 Minimum Bills

Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
(Bills) (Bills) (Bills)
Water Utility
1 General Customers 47,758 47,878 47,998 2 Total 47,758 47,878 47,998
Recycled Water Utility
3 General Customers 601 613 620 4 Total 601 613 620
Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-2

2.1.3 Water Consumption
Table 2-2 shows the projected water and recycled water consumption for the Study period. In determining the projected water and recycled water consumption, Black & Veatch analyzed historical water consumption patterns in conjunction with future water conservation requirements set by the City’s Water Shortage Contingency Plan and the continual requirement of SB 7x-7. In 2017, the State of California formally lifted the water restrictions as it declared the drought over. Unfortunately, in 2022 after another three year of dry weather, Governor Newsom called for local water suppliers to move to Level 2 of their Water Shortage Contingency Plans to drive water conservation. The City has been operating in Level 2 since June 2021 when Valley Water moved to Level 2. The State of California and Governor continue to monitor drought conditions which can lead to further water cutbacks and conservation measures for water consumption.

Many factors have contributed to the City’s steady decline in consumption. The City’s primary conservation goals can be found in the Water Shortage Contingency Plan, and Santa Clara’s Council codified the continuing goal to conserve in July of 2017. The City offers a rain barrel rebate program and works with the Valley Water on other outreach and rebate programs for water conservation. Expanding the use of recycled water to existing and new customers is important for the City in supplementing th e use of potable water. Overall, customers have done well to increase efficiency in the use of water resources.

Figure 2-1 below represents the population growth and a decline in water consumption.

Figure 2-1 Water Sales

Recognizing that the City has met SB 7x-7 requirements and water consumption was at historic lows, the City anticipates a steady increase of 0.4% per year for the Water Utility and 1. 1% per year for the Recycled Water Utility over the Study period. The City currently bills water consumption in hundred cubic feet (HCF) and only charges for consumption more than the allowance. 135 ,CX>O -----------------------------------------------------~ 11.0CX)

10.0CX>
9,000
g
l. 110 ,ex> o +----- ----11--- -l----------------- -""'~ ----'llf-- ~ ~ -'l. ~-------------------- ---l ~
8,000 i
j
i
7 .000 ::::ii,;
6,000
5 ,000
Lowest VVater- Use Dur-ing
es.ooo +----------------------------------------- _._ ___ 1_4_-_1_7_D_rn_u...cgc.h_t __ _, 4 .000 ~###~##~##~##~~$~~#~~##~~~~~~~~~#~~~#~
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-3

Table 2-2 Billed Water Consumption

2.2 Revenue under Existing Rates
Water and recycled water user rates serve as the primary source of revenue for the Water and Recycled Water Utilities. Therefore, the level of future rate revenue is important in developing a long -range financial plan. To determine rate revenue, the projected system growth in terms of the number of minimum bills and billed water consumption is multiplied by the applicable rates to determine water and recycled water rate revenue.

Table 2-3 shows the current Water and Recycled Water Utilities rate schedules. It is important to note that the minimum monthly service charge applies to customers that do not exceed the consumption allowance within the meter sizes. Therefore, the minimum monthly service charge serves as a baseline cost that the City needs to recover.

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
(HCF) (HCF) (HCF)
Water Utility
1 General Customers 6,643,364 6,676,580 6,693,272 2 Total Usage (HCF) 6,643,364 6,676,580 6,693,272 3 Total Usage (AF) 15,251 15,327 15,366 Recycled Water Utility
4 General Customers 1,570,538 1,588,899 1,604,788 5 Total 1,570,538 1,588,899 1,604,788
6 Total Usage (AF) 3,605 3,648 3,684 Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-4

Table 2-3 Existing Water and Recycled Water Rates

Table 2-4 summarizes projected water and recycled water rate revenue under existing rates. As shown, the revenue generated is projected to increase over the Study period in conjunction with the increase in the number of minimum bills and water consumption. The projected Water Utility revenues increase from $52.7M in FY 2024 to $53.1M in FY 2026, representing an overall increase of 0.7% over the three-year study period. The projected Recycled Water Utility revenue increases from $ 6.5M in FY 2024 to $6.7M in FY 2026, reflecting an overall increase of 2.2% over the three-year Study period.

All City All City
FY 2023 FY 2023
Minimum Monthly Meter Rates ($/mo) Consu mption Charges 5/8" x 3/4" 20.54 Water Utility ($/HCF)
1" 32.00 General Customers 7.33
1-1/2" 60.65
2" 95.03 Recycled Water Utility ($/HCF)
3" 186.71 General Customers 4.12
4" 289.85 Industrial Process 4.12
6" 576.36
8" 920.17
10" 1,378.58
12" 1,937.26
Fire Service Charges ($/mo)
2" 2.87
4" 16.25
6" 47.80
8" 101.82
10" 183.09
12" 295.91
Cross Connection Charges ($/mo)
1" 7.33
2" 11.73
3" 23.47
4" 36.67
6" 73.33
8" 117.33
10" 175.99
DescriptionDescription -I
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-5

Table 2-4 Projected Revenue under Existing Rates

2.3 Other Revenue
Other sources of operating revenue include charges for hydrant flow tests, meter tests, engineering plan review, water installation and relocation, interest on investments, and other miscellaneous revenues. In total, other operating revenues represent 3.3% of the Water Utility’s total revenue and 6.2% of the Recycled Water Utility’s total revenue. The City anticipates that these revenues will remain relatively constant for the duration of the Study period.

2.4 Operating and Maintenance Expenses
Table 2-5 summarizes the Water and Recycled Water Utilities’ projected O&M expense for the Study period. These expenses include costs related to salaries and benefits, materials and supplies, contract and professional services, water supply costs, indirect and direct costs, and routine capital outlay. The City anticipates that all O&M expenditures, excluding water supply costs, will increase on average by 3. 3% annually for the Water Utility and an average of 4.5% annually for the Recycled Water Utility from the FY 2024.

Water supply costs include water produced and water purchased costs. In the case of the Water Utility, the City has three main sources of water: 1) groundwater pumped from City -owned wells; 2) surface water from the Valley Water and 3) imported water from the Hetch Hetchy watershed from SFPUC. The City operates 26 groundwater wells that tap the underground aquifers, which make up a targeted amount of approximately 59% of the City's water supply. The City imports the remainder of its water supplies from the two wholesale water agencies. Based on estimates of groundwater and wholesale rates provided by Valley Water and SFPUC, the City expects water production and purchased water costs to increase by at least 19.8% over the Study period.

Recycled water is a reliable drought-proof source of water that helps offset the use of potable sources, especially in drought-prone years in California. In the case of the Recycled Water Utility, the City has one main source of recycled water: The San Jose-Santa Clara Regional Wastewater Facility. This facility produces highly treated water delivered through separate pipelines. Based on estimates from the facility, the City expects purchased recycled water costs to increase by at least 30.1% over the Study period.

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
($) ($) ($)
Water Utility
1 General Customers 50,593,500 50,841,700 50,968,800 2 Fi re Servi ce 1,003,600 1,004,500 1,005,500 3 Cross Connection 1,140,700 1,141,900 1,143,200 4 Total 52,737,800$ 52,988,100$ 53,117,500$
Recycled Water Utility
5 General Customers 6,533,500 6,610,300 6,676,400 6 Total 6,533,500$ 6,610,300$ 6,676,400$
Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-6

Table 2-5 O&M Expenses

As shown in Table 2-5, the Water Utility’s O&M expenses increase from $56.2M in FY 2024 to $64.6M in FY 2026, while the Recycled Water Utility’s O&M expenses increase from $7.9M in FY 2024 to $10.1M in FY 2026.

2.5 Capital Improvement Program
The Water and Recycled Water Utilities develop five-year Capital Improvement Plans annually to identify water and recycled water system needs, including assessments, inspections, maintenance, and rehabilitation and replacement requirements.

Table 2-6 summarizes the Water and Recycled Water Utilities CIP for FY 2024 through FY 2026. The Water Utility is projecting $13.4M in CIP, and the Recycled Water Utility is projecting $161.7k in CIP over the Study period, which includes both capital and replacement projects. The City has posted the CIP Budget on its website for complete details associated with each CIP project.

Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
($) ($) ($)
Water Utility
1 Salaries 6,134,300 6,318,300 6,507,600
2 Benefi ts 3,540,600 3,720,300 3,909,300
3 Mate rials/Se rvice s/Supplie s 3,205,700 3,269,600 3,335,000 4 Interfund Services 7,905,910 8,306,610 8,436,460 5 Resource & Production 35,426,000 39,377,500 42,439,200 6 Capital Outlay 0 0 0 7 Total 56,212,510$ 60,992,310$ 64,627,560$
Recycled Water Utility
8 Salaries 410,800 433,000 450,800
9 Benefi ts 236,500 248,700 261,500
10 Mate rials/Se rvice s/Supplie s 39,300 40,000 40,700 11 Interfund Services 493,430 525,005 535,723 12 Resource & Production 6,738,500 7,861,400 8,764,300 13 Capital Outlay 0 0 0 14 Total 7,918,530$ 9,108,105$ 10,053,023$
Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-7

Table 2-6 Capital Improvement Projects

2.5.1 Capital Improvement Financing Plan
The City funds annual expenditures for the CIP from a combination of available funds on hand, connection charges, developer contributions, and revenues derived from user rates. As shown in Table 2-7 and Table 2-8, the average annual CIP expenditure is $4.5M for the Water Utility and $53.9k for the Recycled Water Utility. There is no planned annual CIP contribution from the Water Utility Operating Fund and Recycled Water Utility over the Study period. The CIP will be funded through funds on hand.

Table 2-7 Construction Fund Financing Plan (Water)

Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
($) ($) ($)
Water Utility
1 7005 Buildings and Grounds 1,572,300 79 1,700 318,600 2 7054 Distribution System
Repl acement/Restorati on 2,075,700 2,1 54,200 2,235,700 3 7057 Asset Management Program 155,700 16 1,600 167,700 4 7058 SCADA Improvements 518,900 53 8,600 558,900 5 7059 New and Repl acement Wel l s 1,037,800 53 8,600 558,900 6 Total 5,3 60,400$ 4,184,700$ 3,839,800$
Recycled Water Utility
7 7505 Recycl ed Water System Mai ns and
Servi ces 51,900 53, 900 55,900
8 Total 51,900$ 53,900$ 55,900$
Line No. Description
Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
($) ($) ($)
Source of Funds
1 Intra Transfer In - Debt Financing 0 0 0 2 Intra Transfer In - Customer Service Charge 0 0 0 3 Connection Charges 0 0 0 4 Developer Contributions 0 0 0 5 Total Sources 0$ 0$ 0$ Use of Funds
6 Improvements Projects 5,360,400 4,184,700 3,839,800 7 Total Uses 5,360,400$ 4,184,700$ 3,839,800$
8 Net Annual Cash Balance (5,360,400) (4,184,700) (3,839,800) 9 Beginning Unrestricted Fund Balance 17,146,900 11,786,500 7,601,800 10 Net Cumulative Fund Balance 11,786,500$ 7,601,800$ 3,762,000$ 11 Minimum Construction Reserves 4,184,700$ 3,839,800$ 3,985,100$ Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-8

Table 2-8 Construction Fund Financing Plan (Recycled Water)

2.6 Transfers
The Water and Recycled Water Utilities will each conduct transfers from their respective Operating Funds and other funds over the Study period. Table 2-9, Lines 18 to 20 for the Water Utility and Table 2-10, Lines 15 to 17 for Recycled Water Utility summarize these associated amounts, respectively. The other funds consist of the Rate Stabilization Fund, Pension Stabilization Fund, and Construction Fund. See Section 2.7 for further explanation on Rate Stabilization and Pension Stabilization Funds. The Construction Fund transfers represent money to cover planned CIP project expenditures. These transfers do not represent direct operating expenses for either enterprise; therefore, Black & Veatch includes these co sts as “below- the-line” cash flow items and does not include them as O&M expenses.

2.7 Reserves
A utility typically establishes reserves for several reasons, such as covering shortfalls in operating revenues, maintaining strong bond ratings, covering day-to-day operating costs, and easing the burden on ratepayers associated with large rate increases. Per the reserve level recommendations, the Water and Recycled Water Utilities will maintain the following four reserves:
 Operating Reserve represents working capital maintained by the Operating Fund to cover day -to- day expenses and maintain enough funds to cover accounts receivables if there are supplier issues, periods of lower-than-expected water sales, or unforeseen cost increases. The reserve will maintain a minimum balance of 90 days of operating expenses once fully funded  Construction Reserve represents funds used for unforeseen and unbudgeted capital costs. Once fully funded, this reserve will maintain a minimum balance of 12-months of the following year’s planned CIP.
 Rate Stabilization Reserve represents funds used to absorb revenue shortfall due to short- term decreases in water sales. This reserve stabilizes water and recycled water rate revenue and is an Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
($) ($) ($)
Source of Funds
1 Intra Transfer In - Debt Financing 0 0 0 2 Intra Transfer In - Customer Service Charge 0 0 0 3 Connection Charges 0 0 0 4 Developer Contributions 0 0 0 5 Total Sources 0$ 0$ 0$ Use of Funds
6 Improvements Projects 51,900 53,900 55,900 7 Total Uses 51,900$ 53,900$ 55,900$
8 Net Annual Cash Balance (51,900) (53,900) (55,900) 9 Beginning Unrestricted Fund Balance 1,922,900 1,871,000 1,817,100 10 Net Cumulative Fund Balance 1,871,000$ 1,817,100$ 1,761,200$ 11 Minimum Construction Reserves 53,900$ 55,900$ 58,000$ Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-9

effort to avoid wide swings in rates charged to customers over time. The reserve will maintain a minimum balance of 10% of water and recycled water sales revenue when fully funded.  Pension Stabilization Reserve represents funds used to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPERS rates and negotiated pay increases. The reserve target is $3.0M for the Water Utility and $150,000 for the Recycled Water Utility by FY 2030.

Appropriate reserve levels help the Water and Recycled Water Utilities with liquidity, provide operational flexibility, and demonstrate fiscal responsibility to the rating agencies, which allows the City to access lower-cost funds.

2.8 Projected Operating Results
The revenue requirements of the Water and Recycled Water Utilities consist of O&M expenses, debt service, capital expenditures, and reserve requirements.

To fully understand the current condition of the Water and Recycled Water Utilities, it is important to examine the cash flow projections under the status quo scenario. As shown in Figure 2-2 and Figure 2-3, the status quo conditions would project that both utilities would operate from an annual deficit position, thus requiring the use of reserves to keep operating. In this scenario, the Water and Recycled Water Utilities would not impose any revenue increases over the Study Period and continue to incur O&M expenses, pay for the execution of the planned CIP, and transfer to reserves.

Figure 2-2 Status Quo Operating Cash Flow (Water)

SS0,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$.30,000,000
$20,000,000
$10,000,000
so
-$10,000,000
-$20,000,000
- O&M
~ Re.-enue
Water Utility - Opera ting f und
- Debt Service
~ Cash Balance
- Capit al Projects
- Target Co6h Balance
- R a:e St cbiliza: ion
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-10

Figure 2-3 Status Quo Operating Cash Flow (Recycled Water)

The analyses performed for the Study indicate that the City should implement the proposed revenue increases shown in Table 2-9 and Table 2-10 if it wishes to keep the Water and Recycled Water Utilities in a balance financial condition. The revenue increases represent the overall total revenue adjustment needed to meet revenue requirements. The revenue adjustment does not represent adjustments to the individual rates but reflects the overall level of revenue needed to meet the Water and Recycled Water Utilities’ obligations.

The suggested revenue increases help the Water and Recycled Water Utilities meet the following goals:
 Meet budgeted operating obligations in the three FYs.  Meet planned capital investments in the three FYs.
 Maintain an operating reserve of 90 days of operating expenses.  Maintain construction reserve of 12-months of next year’s CIP.  Continue transfers for the rate stabilization reserve to meet the goal of 10% of rate revenues.  Continue transfers for the pension stabilization reserve to meet the FY 2030 goal.

Table 2-9 and Table 2-10 summarize proposed Operating Funds for the Study Period. The Operating Funds consist of 1) Revenue and 2) Revenue Requirements.

Revenue
 Line 1 is the revenue under existing rates.
 Lines 2 through 4 are the additional revenues generated from the required annu al revenue increases. The additional revenue generated is a direct reflection of the number of months the increase is effective for, and therefore amount might calculate at less than that stated amount.  Line 6 is the total revenue generated from user charges.  Line 14 for the Water Utility and Line 9 for the Recycled Water Utility represent other operating revenues.
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
so
-$2,000,000
- O&M
-e- ReJenue
Recycled Water Utility - Operating i=und
--
20 24
- Debt Service - Capita l Projects - R ci:e St abl ilci:ion -e-- Cash Balance -., Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-11

 Line 11 for the Recycled Water Utility represents transfers into operating.  Line 15 for the Water Utility and Line 12 for the Recycled Water Utility represent total revenues for the enterprises.

Revenue Requirements
 Line 17 for the Water Utility and Line 14 for the Recycled Water Utility represent O&M expenses.

The O&M expenses include water production and water purchase.  Line 21 for the Water Utility and Line 18 for the Recycled Water Utility represent transfers. The transfers include money to the Rate Stabilization Fund, Pension Fund, and Construction Fund.  Line 22 for the Water Utility and Line 19 for the Recycled Water Utility represent total revenue requirements for the enterprises.

Line 25 for the Water Utility and Line 22 for the Recycled Water Utility represent the net cumulative cash balance within the Operating Funds. The net cumulative cash balance intends to match, to the extent possible, Line 26 for the Water Utility and Line 23 for the Recycled Water Utility. The cash balance reserve is required to ensure the Operation Fund can continue in the event of a supplier interruption, market price fluctuations of critical equipment or supplies, or an abrupt drop in account receivables. The reserve target minimum is 90 days of O&M expenses.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-12

Table 2-9 Operating Fund (Water)

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
($) ($) ($)
Revenue
Rate Revenue
1 Revenue from Exi sti ng Rates 53,104,700 53,356,800 53,487,100 Year Months Effective Rate Adj
2 FY 2024 12 8.35% 4,434,200 4,455,300 4,466,200 3 FY 2025 12 9.00% 5,203,100 5,215,800
4 FY 2026 12 9.00% 5,685,200
5 Increased Revenue Due to Adjustments 4,434,200 9,658,400 15,367,200 6 Subtotal Rate Revenue 57,538,900$ 63,015,200$ 68,854,300$ Other Operating Revenue
7 Solar System Maintenance 80,100 80,100 80,100 8 Water System Mai ntenance 1,070,500 1,070,500 1,070,500 9 Water Construction 0 0 0 10 Water System Operati ons 0 0 0 11 A dm inistration De sign 905,400 912,300 919,300 12 Water Quality 0 0 0 13 Water Resources 76,900 76,900 76,900 14 Subtotal Other Operating Revenue 2,132,900$ 2,139,800$ 2,146,800$ 15 Total Revenue 59,671,800$ 65,155,000$ 71,001,100$
Revenue Requirements
Operating & Maintenance
16 O&M Expenses 56,212,500 60,992,300 64,627,600
17 Subtotal O&M 56,212,500$ 60,992,300$ 64,627,600$
Transfers
18 Transfer to Rate Stabilization Fund 0 0 2,250,000 19 Transfer to Pensiotn Stabilization Fund 199,400 199,400 199,400 20 Transfer to Water Construction Fund 0 0 0 21 Total Transfers 199,400$ 199,400$ 2,449,400$ 22 Total Revenue Requirements 56,411,900$ 61,191,700$ 67,077,000$ 23 Net Annual Cash Balance 3,259,900 3,963,300 3,924,100 24 Beginning Fund Balance 9,386,600 12,367,600 16,052,000 25 Net Cumulative Fund Balance 12,646,500$ 16,330,900$ 19,976,100$ 26 Mi ni mum Operati ng Reserves (90 Days) 13,860,600$ 15,039,200$ 15,935,600$ Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-13

Table 2-10 Operating Fund (Recycled Water)

Figure 2-4 presents the proposed Water Utility Operating Fund, and Figure 2-5 presents the Recycled Water Utility Operating Fund.

Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
($) ($) ($)
Revenue
Rate Revenue
1 Revenue from Exi sti ng Rates 6,533,500 6,6 10,300 6,676,400 Year Months Effective Rate Adj
2 FY 2024 12 10.00% 653,400 661,000 667,600 3 FY 2025 12 11.00% 799,800 807,800
4 FY 2026 12 11.00% 896,700
5 Increased Revenue Due to Adjustments 653,400 1,460,800 2,372,100 6 Subtotal Rate Revenue 7,186,900$ 8,071,100$ 9,048,500$ Other Operating Revenue
7 System Maintenance 94,700 96,600 98,500 8 South Bay Water Recycling System Maintenan 421,500 438 ,400 453,900 9 Subtotal Other Operating Revenue 516,200$ 535,000$ 552,400$ Transfers From
10 RW Capital Fund 0 0 0 11 Subtotal Transfers From -$ -$ -$ 12 Total Revenue 7,703,100$ 8,606,100$ 9,600,900$ Revenue Requirements
Operating & Maintenance
13 O&M Expenses 7,918,500 9,108,100 10,053,000 14 Subtotal O&M 7,918,500 9,108,100 10,053,000 Transfers
15 Transfer to Rate Stabilization Fund 0 0 0 16 Transfer to Pensiotn Stabilization Fund 0 0 9,800 17 Transfer to Recycled Water Const Fund 0 0 0 18 Total Transfers 0 0 9,800 19 Total Revenue Requirements 7,918,500$ 9,108,100$ 10,062,800$ 20 Net Annual Cash Balance (215,400) (502,000) (461,900) 21 Beginning Fund Balance 4,980,400 4,765,000 4,263,000 22 Net Cumulative Fund Balance 4,765,000$ 4,263,000$ 3,801,100$ 23 Mi ni mum Operati ng Reserves (90 Days) 1,952,500$ 2,245,800$ 2,478,800$ Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 2-14

Figure 2-4 Water Operating Cash Flow

Figure 2-5 Recycled Water Operating Cash Flow
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
so
- O&M
-e- ReJenue
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
52,000,000
so
- O&M
-e- ReJenue
Water Utility - Operating i=und
2024 2025 2026
- Debt Service - Capita l Projects - R ci:e St abl ilci:ion -e-- Cash Balance -e, Target Cash Balance
Recycled Water Utility - Operating i=und
2024 2025, 2026
- Debt Service - Capita l Projects - R ci:e St abl ilci:ion -e-- Cash Balance -.,. Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-1

3.0 Cost of Service Analysis
The cost-of-service analysis requires recovery of the City’s needed revenues from water and recycled water service rates, allocated to customer classes according to the service rendered. An equitable rate structure allocates the capture of revenue requirements to customer classes based on the quantity of water consumed, peak flows, the number of customer connections, and other relevant factors.

In analyzing the Water and Recycled Water Utilities’ cost of service for allocation to its customer classes, Black & Veatch selected the annual revenue requirements for FY 202 4 as the Test Year (TY) requirements to demonstrate the development of cost-of-service water and recycled water rates. Table 3-1 summarizes the total costs of service that need to be recovered from water user rates. Table 3-2 summarizes the total costs of service that need to be recovered from recycled water user rates. Both tables represent TY 202 4.

Table 3-1 Cost of Service Revenue from Rates (Water)

Operating Capital Total
Expense Cost Cost
($) ($) ($)
Revenue Requirements
1 O&M Expenses 56,212,500 0 56,212,500 2 Debt Servi ce 0 0 0 3 Transfers 478,300 0 478,300 4 Subtotal 56,690,800 0 56,690,800
Less Revenue Requirements Met from Other Sources
5 Solar System Maintenance 80,100 0 80,100 6 Water System Mai ntenance 1,070,500 0 1,070,500 7 Water Construction 0 0 0 8 Water System Operati ons 0 0 0 9 A dm inistration De sign 905,400 0 905,400 10 Water Quality 0 0 0 11 Water Resources 76,900 0 76,900 12 Subtotal 2,132,900 0 2,132,900
Adjustments
13 Adjustment for Annual Cash Balance (2,981,000) 0 (2,981,000) 14 Subtotal (2,981,000) 0 (2,981,000)
15 Cost of Servi ce to be Recovered from Rates 57,538,900$ 0$ 57,538,900$ Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-2

Table 3-2 Cost of Service Revenue from Rates (Recycled Water)

The total revenue requirement is shown in Line 4, which corresponds with Table 2-9, Line 22, and Table 2-10, Line 19. As shown in Line 12 for the Water Utility and Line 7 for the Recycled Water Utility, we deduct revenues from other sources to derive the net revenue requirement recovered through rates, which correspond with Table 2-9, Line 14 and Table 2-10, Lines 9 and 10, respectively.

Line 13 for the Water Utility and Line 8 for the Recycled Water Utility represent the net annual cash balance during the TY. If the enterprise is drawing down funds already in the Operating Fund, this number is positive. The number will be negative if the enterprise is replacing funds. In the case of the Water Utility, the $3.0M figure indicates that the forecast is projecting a positive cash balance for the year. In the case of the Recycled Water Utility, the $215.4k figure indicates that the forecast is projecting a negative cash balance for the year.

3.1 Functional Cost Components
The first step in conducting a cost-of-service analysis involves analyzing the cost of providing water and recycled water service by system function to properly allocate the costs to the various customer classes and, subsequently, design rates. As a basis for allocating costs of service among customer classes, the study separates costs into the following four basic functional cost components: (1) Base; (2) Extra Capacity; (3) Customer; and (4) Direct Assignment, described as follows:
 Base costs represent operating and capital costs of the system associated with service to customers to the extent required under constant or average annual load conditions without the elements necessary to meet water consumption variations or peak demands.  Extra Capacity costs represent those operating and capital costs incurred in meeting peaking demands. Peaking demands represent water consumption more than the average rate of use.  Customer costs are those expenditures that tend to vary in proportion to the number of customers connected to the system. These include meter reading, billing, collecting, accounting, maintenance, and capital costs associated with meters and services.

Operating Capital Tota l
Expense Cost Cost
($) ($) ($)
Revenue Requirements
1 O&M Expenses 7,918,500 0 7,918,500 2 Debt Servi ce 0 0 0 3 Transfers 0 0 0 4 Subtotal 7,918,500 0 7,918,500
Less Revenue Requirements Met from Other Sources
5 System Maintenance 94,700 0 94,700 6 South Bay Water Recycl i ng System Mai nten 421,500 0 42 1,500 7 Subtotal 516,200 0 516,200
Adjustments
8 Adjustment for Annual Cash Balance 215,400 0 215,400 9 Subtotal 215,400 0 215,400
10 Cost of Servi ce to be Recovered from Rates 7,186,900$ 0$ 7,186,900$ Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-3

 Directly assigned costs are specifically identified as those incurred to serve specific customers.

These costs include fire protection and cross-connections for the Water Utility. The Recycled Water Utility has no direct assigned categories.

3.2 Allocation to Cost Components
The next step of the cost-of-service process involves allocating each cost element to functional cost components based on the parameter or parameters having the most significant influence on the magnitude of that cost element. O&M expenses are allocated directly to appropriate cost components. A detailed allocation of related capital investment is used as a proxy for allocating capital and replacement costs. The separation of costs into functional components provides a means for distributing such costs to the various classes of customers based on their respective responsibilities for each type of service.

3.2.1 System Base, Max Day, and Max Hour Allocations
The water and recycled water systems consist of various facilities designed and operated to fulfill a given function. For the systems to provide adequate service to its customers, it must be capable of meeting the annual volume requirements and the maximum demand rates placed on the system. Because not all customers and types of customers exert maximum demand at the same time, the capacities of the various facilities must meet the maximum coincidental demand of all classes of customers. Each water and recycled water service facility within the systems has an underlying average demand exerted by the customers for whom the base cost component applies. For those facilities designed solely to meet average day demand, 100% of the costs go to the base cost component. Extra capacity requirements associated with coincidental demands more than average use consist of maximum daily and maximum hourly demand subcomponents.

The first step in determining the allocation percentages for volume-related cost allocations is to assign system peaking factors. The base element is equal to the average daily demand (ADD) and assigned a value of 1.0. Based on the City’s 2002 Water Master Plan, the Water Utility’s maximum day (max day) demand is 1.5 times the ADD. The maximum hourly (max hour) demand is 1.8 times the ADD. Based on the City’s 2014 Strategic and Master Planning Report, 2002 Water Master Plan, the Recycled Water Utility’s max day demand is 1.7 times the ADD. The max hour demand is 2.38 times the ADD.

The costs associated with facilities required to meet maximum day demand are allocable to base and maximum day extra capacity as shown below for the Water Utility. Recycled Water Utility would use a similar allocation based on its respective max day and max hour ratios.  Base = (1.0/1.5) x 100 = 66.7%
 Max Day = (1.5 – 1.0)/1.5 x 100 = 33.3%
These calculations indicate that the average or base use requires 66.7% of the capacity of facilities designed and generated to meet maximum day demand, and the remaining 33.3% meets maximum day extra capacity requirements.

The costs associated with facilities required to meet maximum hour demand are allocable to base, maximum day extra capacity and maximum hour extra capacity as follows:
 Base = (1.0/1.8) x 100 = 55.6%
 Max Day = (1.5 – 1.0)/1.8 x 100 = 27.7%
 Max Hour = (1.8 – 1.5)/1.8 x 100 = 16.7%
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-4

3.2.2 Allocation of Operating and Maintenance Expenses
In allocating O&M expenses for TY 2024, costs are directly allocated to the cost components to the extent possible. The Water and Recycled Water Utilities book operating costs by functional categories.

Therefore, Black & Veatch used the factors noted in Section 3.1 to allocate the operating expenses to the cost components. The study based the allocation of Administration and Transfer cost elements on the average of all other costs. The direct assignment represents fire protection and cross -connections for the Water Utility. Table 3-3 and Table 3-4 represent the allocation of O&M to the cost components. Next, revenues are subtracted from other sources as shown in Table 3-1, Lines 12 and 15 and Table 3-2, Lines 7 and 10. The analysis deducts any drawdown of available cash balances and normalizes the rate adjustments for a full year to determine the net O&M costs for each utility.

Table 3-3 Allocation of O&M Expenditures (Water)

Table 3-4 Allocation of O&M Expenditures (Recycled Water)

Common to All Customers
Base Extra Capacity Customer Fire Cross
Base Max. Day Max. Hour Meters Cust/Bill. Protection Connection ($) ($) ($) ($) ($) ($) ($) ($)
Water Utility
Operating Expenses
1532 Solar System Maintenance 283,900 0 0 0 283,900 0 0 0 1 1422 Water System Maintenance
2 Customer Servi ce 325,500 0 0 0 0 325,500 0 0 3 Backfl ow Preventi on 845,000 0 0 0 0 0 0 845,000 4 A ll Othe r 689,300 376,500 191,000 114,900 0 0 6,900 0 1423 Water Construction 3,806,500 2,079,100 1,054,900 634,400 0 0 38,100 0 5 1424 Water System Operations
6 Generation & Pumping 1,153,200 758,200 383,500 0 0 0 11,500 0 7 Custom e r Billing & Me te r Re ading 745,400 0 0 0 0 745,400 0 0 8 Meters 357,700 0 0 0 357,700 0 0 0 Hydrants 1,385,400 0 0 0 0 0 1,385,400 0 9 A ll Othe r 7,017,100 3,832,700 1,944,700 1,169,500 0 0 70,200 0 10 1411 Administration Design 4,459,200 3,029,600 308,000 165,300 630,600 92,300 160,600 72,800 11 1412 Water Quality 270,800 216,600 0 0 51,500 0 2,700 0 12 1413 Water Resources
Water Purchase 34,272,800 27,418,300 0 0 6,511,800 0 342,700 0 13 A ll Othe r 600,700 480,600 0 0 114,100 0 6,000 0 14 Transfers 478,300 325,100 33,000 17,700 67,600 9,900 17,200 7,800 15 Total O&M Expenses 56,690,800$ 38,516,700$ 3,915,100$ 2,101,800$ 8,017,200$ 1,173,100$ 2,041,300$ 925,600$ Less Other Revenue
16 Mi scel l aneous Revenues 2,132,900 1,449,200 147,300 79,100 301,600 44,100 76,800 34,800 17 Other Adjustments (2,981,000) (2,025,300) (205,900) (110,500) (421,600) (61,700) (107,300) (48,700) 18 Net Operati ng Expenses 57,538,900$ 39,092,800$ 3,973,700$ 2,133,200$ 8,137,200$ 1,190,700$ 2,071,800$ 939,500$ Line No. Description Total Costs
Common to All Customers
Base Extra Capacity Customer
Base Max. Day Max. Hour Meters Cust/Bill.
($) ($) ($) ($) ($) ($)
Recycled Water Utility
Operating Expenses
1 1522 System Maintenance
2 Water Purchase 6,738,500 6,738,500 0 0 0 0 3 Custom e r Billing & Me te r Re ading 3,700 0 0 0 0 3,700 4 Meters 477,200 0 0 0 477,200 0 5 A ll Othe r 343,200 144,200 100,900 98,100 0 0 6 1525 South Bay Water Recycling System 355,900 209,400 146,500 0 0 0 7 Transfers 0 0 0 0 0 0 8 Total O&M Expenses 7,918,500$ 7,092,100$ 247,400$ 98,100$ 477,200$ 3,700$ Less Other Revenue
9 Mi scel l aneous Revenues 516,200 462,400 16,100 6,400 31,100 200 10 Other Adjustments 215,400 192,900 6,700 2,700 13,000 100 11 Net Operati ng Expenses 7,186,900$ 6,436,800$ 224,600$ 89,000$ 433,100$ 3,400$ Total CostsDescriptionLine No.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-5

3.2.3 Allocation of Capital Investments
In allocating the capital investment for TY 2024, the existing fixed assets (which serve as a proxy for the current capital investments) are allocated directly to cost components to the extent possible. The allocation of costs in this manner provides a basis for annual investment in water and recycled w ater system facilities. Plan capital costs can be allocated using the distribution of total net system investment across the functional cost components. Table 3-5 and Table 3-6 show the total allocation of existing system investment serving water and recycled water customers. The total net system investment of $61.8M shown on Line 11 for the Water Utility and $1.1M on Line 9 for the Recycled Water Utility represents the Test Year original cost less accumulated depreciation of the system in service. The total net system investment reflects the Water and Recycled Water Utilities fixe d asset listing ending June 30, 2022. This value represents the original cost (book value) of the assets.

Table 3-5 Allocation of Capital Costs (Water)

Table 3-6 Allocation of Capital Costs (Recycled Water)

3.3 Units of Service
To properly recognize the cost of service, each customer class receives its share of base, maximum day, peak hour, and customer costs. Following the allocation of costs, the total cost responsibility for each customer class is developed using unit costs of service for each cost function and subsequently assigning those costs to the customer classes based on the respective service requirements of each. The Common to All Customers
Base Extra Capacity Cust omer Fire Cross
Base Max. Day Max. Hour Meters Cust/Bill. Protection Connection ($) ($) ($) ($) ($) ($) ($) ($)
Water Utility
Plant Assets
1 Water Production 20,088,400 16,070,700 0 0 3,816,800 0 200,900 0 2 Pumping 3,262,100 2,144,700 1,084,800 0 0 0 32,600 0 3 Treatment 1,870,500 1,229,700 622,100 0 0 0 18,700 0 4 Transmission & Distribution 27,476,400 15,007,600 7,614,600 4,579,400 0 0 274,800 0 5 Meters & Services 6,993,600 0 0 0 6,993,600 0 0 0 6 Fire Hydrants 563,600 0 0 0 0 0 563,600 0 7 General Plant 1,584,500 906,000 245,100 120,400 284,300 0 28,700 0 8 Total Plant Assets 61,839,100$ 35,358,700$ 9,566,600$ 4,699,800$ 11,094,700$ 0$ 1,119,300$ 0$ Less Other Revenue
9 Miscellaneous Revenues 0 0 0 0 0 0 0 0 10 Other Adjustments 0 0 0 0 0 0 0 0 11 Net Capital Expenses 61,839,100$ 35,358,700$ 9,566,600$ 4,699,800$ 11,094,700$ 0$ 1,119,300$ 0$ Line No. Description Total Costs
Common to All Customers
Base Extra Capacity Customer
Base Max. Day Max. Hour Meters Cust/Bill.
($) ($) ($) ($) ($) ($)
Recycled Water Utility
Plant Assets
1 Water Production 0 0 0 0 0 0 2 Pumping 0 0 0 0 0 0 3 Treatment 0 0 0 0 0 0 4 Transmission & Distribution 1,097,700 461,200 322,900 313,600 0 0 5 Meters 0 0 0 0 0 0 6 Total Plant Assets 1,097,700$ 461,200$ 322,900$ 313,600$ 0$ 0$ Less Other Revenue
7 Miscellaneous Revenues 0 0 0 0 0 0 8 Other Adjustments 0 0 0 0 0 0 9 Net Capital Expenses 1,097,700$ 461,200$ 322,900$ 313,600$ 0$ 0$ Line No. Description Total Costs
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-6

number of units of service required by each customer class provides a means for the proportionate distribution of costs previously allocated to respective cost categories.

Table 3-7 summarizes the estimated TY 2024 units of service for the various customers. Base costs vary with the volume of water consumed and distributed to the customers on that basis. Extra Capacity costs are those associated with meeting peak demand rates of water use and distributed to the customers based on the respective class capacity requirements more than average rates of use. Black & Veatch followed the capacity factor methodology outlined in Appendix A of the AWWA M1 Manual to derive peak consumption information from the monthly consumption records in the City’s Customer Information System which helps provide the basis for estimating maximum day and peak hour ratios. The number of bills for each customer serves as the basis for distributing customer billing requirements. Customer meter requirements are allocated on an equivalent meter’s basis for each customer. The estimated number of equivalent meters for each customer relies on the total number of meters serving respective classes and the hydraulic capacity ratio of the meters to the 5/8 x 3/4-inch meter. The equivalent meter ratios adopted in this analysis are consistent with the AWWA M1 Manual. Private fire -protection costs allocations use equivalent fire hydrants.

3.4 Cost of Service Allocations
The Study applies the unit costs of service to each customer class’s respective service requirements to determine the cost of service for each customer class. The total unit costs of service applied to the respective requirements for each customer class results in the total cost of service for each customer class.

3.4.1 Units Costs of Service
The TY 2024 unit cost of service for each functional cost component is simply the total cost divided by the applicable units of service, as shown in Table 3-8 and Table 3-10. On Line 4, the total costs represent the cost that rates need to recover, as demonstrated in Table 3-1, Line 16 for the Water Utility, and Table 3-2, Line 11 for the Recycled Water Utility. The net O&M cost includes O&M (including water purchase) less revenue from other sources and adjustments. The total capital cost includes debt service payments and transfers to the Construction Fund. Line 6 represents the unit costs for the entire water and recycled water systems regardless of customer classes. After that, the unit costs are used to allocate the costs to the specific customer classes.

3.4.2 Distribution of Costs of Service to Customer Classes Applying the unit costs to the units for each customer class produces the customer class costs. This process is illustrated in Table 3-9 and Table 3-11, in which unit costs are applied to the customer class units of service for TY 2024. The costs attributable to each customer class reflect the functional cost components described in Section 3.1. Each customer class places a burden on the system in different ways, and thus the allocation of the units is representative of this burden.

An example of the application of unit costs is shown below for illustrative purposes.

Base Component
Uni t Cost (Tabl e 3-5, Li ne 6) 5.83$ per HCF G
eneral Customer Consumption (Table 3-6, Line 2) 6,704,673 HCF Total Allocated Cost 39,092,800$
Please note that the numbers within the tables are rounded, yet the calculations are done based on non-rounded values; therefore, results might vary.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-1

Table 3-7 Units of Service (Water and Recycled Water)

Table 3-8 Units Cost of Service (Water)

Consumption Maximum Day Maximum Day Fire Cross
Annual Avg. Day Factor Total Extra Factor Total Extra Meters Cust/Bills Protection Connection Col umn Reference (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Units of Measure (HCF) (HCF/day) (HCF/ day) (HCF/day) (HCF/day) (HCF/day) (EMs) (bills) (EHs) (EMs) Water Utility
1 General Customer 6,704,673 18,369 168% 30,860 12,491 252% 46,290 15,430 45,924 321,646 0 0 2 Subtotal 6,704,673 18,369 30,860 12,491 46,290 15,430 45,924 321,646 Fire Service
3 Public Fire 0 0 558 558 4,465 3,907 0 0 3,437 0 4 Pri vate Fi re 0 0 284 284 2,273 1,989 0 15,354 1,750 0 5 Subtotal 0 0 842 842 6,738 5,896 0 15,354 5,187 0 Cross Connection
6 Cross Connection 33,665 0 8,102 7 Subtotal 0 0 0 0 0 0 0 33,665 0 8,102 8 Total Water System 6,704,673 18,369 31,702 13,333 53,028 21,326 45,924 370,665 5,187 8,102 Recycled Water Utility
9 General Customer 1,570,538 4,303 133% 5,723 1,420 200% 8,606 2,883 2,315 3,257 0 0 10 Subtotal 1,570,538 4,303 5,723 1,420 8,606 2,883 2,315 3,257 0 0 DescriptionLine No.

Common to All Customers
Base Extra Capacity Customer Fire Cross
Base Max. Day Max. Hour Meters Cust/Bill. Protection Connection ($) ($) ($) ($) ($) ($) ($)
Water Utility
1 Net Operati ng Expense 57,538,900 39,092,800 3,973,700 2,133,200 8,137,200 1,190,700 2,071,800 939,500 2 Debt Servi ce 0 0 0 0 0 0 0 0 3 Capital Costs 0 0 0 0 0 0 0 0 4 Total Cost of Service 57,538,900$ 39,092,800$ 3,973,700$ 2,133,200$ 8,137,200$ 1,190,700$ 2,071,800$ 939,500$ 5 Units of Se rvice (Total) 6,704,673 13,333 21,326 45,924 370,665 5,187 8,102 HCF HCF/Day HCF/Day Eq. Meters Bills Eq. Hydrants Eq. Meters 6 Cost per Unit 5.83$ 298.03$ 100.03$ 177.19$ 3.21$ 399.46$ 115.96$ per HCF per HCF/Day per HCF/Day per Eq. Meter pe r Bill per Eq. Hydrant per Eq. Meter Total CostsLine No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-2

Table 3-9 Distribution of Costs to Customer Classes (Water)

Common to All Customers
Base Extra Capacity Customer Fire Cross
Base Max. Day Max. Hour Meters Cust/Bill. Protection Connection ($) ($) ($) ($) ($) ($) ($)
Water Utility
General Customer
1 Units 6,704,673 12,491 15,430 45,924 321,646 0 0 2 Allocation of costs of service 53,529,500 39,092,800 3,722,700 1,543,500 8,137,200 1,033,300 0 0 Public Fire
3 Units 0 558 3,907 0 0 3,437 0 4 Allocation of costs of service 1,930,000 0 166,300 390,800 0 0 1,372,900 0 Private Fire
5 Units 0 284 1,989 0 15,354 1,750 0 6 Allocation of costs of service 1,031,800 0 84,700 198,900 0 49,300 698,900 0 Cross Connection
7 Units 0 0 0 0 33,665 0 8,102 8 Allocation of costs of service 1,047,600 0 0 0 0 108,100 0 939,500 7 TOTAL COSTS OF SERVICE 57,538,900$ 39,092,800$ 3,973,700$ 2,133,200$ 8,137,200$ 1,190,700$ 2,071,800$ 939,500$ Line No. Description Total Costs
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 3-3

Table 3-10 Units Cost of Service (Recycled Water)

Table 3-11 Distribution of Costs to Customer Classes (Recycled Water)

Common to All Customers
Base Extr a Capacity Customer
Base Max. Day Max. Hour Meters Cust/Bill.
($) ($) ($) ($) ($) ($)
Recycled Water Utility
1 Net Operati ng Expense 7,186,900 6,436,800 224,600 89,000 433,100 3,400 2 Debt Servi ce 0 0 0 0 0 0 3 Capital Costs 0 0 0 0 0 0 4 Total Cost of Service 7,186,900$ 6,436,800$ 224,600$ 89,000$ 433,100$ 3,400$ 5 Units of Se rvice (Total) 1,570,538 1,420 2,883 2,315 3,257 HCF HCF/Day HCF/Day Eq. Meters Bills
6 Cost per Unit 4.10$ 158.18$ 30.87$ 187.12$ 1.04$ per HCF per HCF/Day per HCF/Day per Eq. Meter pe r Bill Line No. Description Total Costs
Common to All Customers
Base Extra Capacity Customer
Base Max. Day Max. Hour Meters Cust/Bill.
($) ($) ($) ($) ($) ($)
Recycled Water Utility
General Customer
1 Units 1,570,538 1,420 2,883 2,315 3,257 2 Allocation of costs of service 7,186,900 6,436,800 224,600 89,000 433,100 3,400 3 TOTAL COSTS OF SERVICE 7,186,900$ 6,436,800$ 224,600$ 89,000$ 433,100$ 3,400$ Line No. Description Total Costs
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-1

4.0 Rate Design
The initial consideration in the derivation of rate schedules for water and recycled water service is establishing equitable charges to the customers commensurate with the cost of providing that service.

While the cost-of-service allocations to customer classes should not be construed as literal or exact determinations, they offer a guide to the necessity for, and the extent of, rate adjustments. Practical considerations sometimes modify rate adjustments by considering additional factors such as the extent of bill impacts, existing contracts, and historical local policies and practices.

4.1 Existing Rates
The existing rates of the Water and Recycled Water Utilities consist of a fixed component in the form of a minimum monthly service charge and a variable component in the form of a consumption charge. The minimum monthly service charge is based on meter size and applied when consumption does not exceed the consumption allowance. The consumption charge is based on units of consumption (1 unit = 1 HCF = 748 gallons). The City has separate fixed charges for fire services and cross-connections. Table 2-3, presented earlier in this report, summarizes the existing water and recycled water rates.

4.2 Proposed Rates
The cost-of-service analysis described in the preceding sections of this report provides a basis for the design of water and recycled water rates.

4.2.1 Monthly Service Charge
Black & Veatch used meter ratios based on maximum operating capacities by meter size as shown in AWWA M1, Table B-1, which recognizes that as meter size increases, so does the capacity. For example, customers with a 4” meter expects to be able to use more water (at a higher flow capacity) than customers with a ¾” meter. Consequently, the City’s water system must maintain assets sized accordingly and capable of providing customers the level of service expected from their meter connection when the tap turns on. The minimum monthly service charge recovers a portion of the costs associated with wholesale water purchase, meter maintenance and services, meter reading, bill issuance, and maintenance and capacity costs associated with public fire protection regardless of the level of water consumed.

Table 4-1 demonstrates the water cost elements incorporated into the minimum monthly service charge for FY 2024. Table 4-2 shows the Water Utility three-year fixed service charge rate schedule.

Table 4-1 Costs within the Minimum Monthly Service Charge for FY 2024 (Water)

Meter & Public Fire Protection Billing
Meter Mtr Unit FP Unit Meter Adjusted Adjusted Total Service Size Cost Cost Ratio Unit Cost Unit Cost Bill Ratio Unit Cost Charge per EM per EM $ pe r Bill $ $/Month
5/8" x 3/4" 14.77 3.50 1.00 18.27 3.21 1.00 3.21 21.48 1" 14.77 3.50 1.67 30.45 3.21 1.00 3.21 33.66 1-1/2" 14.77 3.50 3.33 60.89 3.21 1.00 3.21 64.10 2" 14.77 3.50 5.33 97.43 3.21 1.00 3.21 100.64 3" 14.77 3.50 10.67 194.86 3.21 1.00 3.21 198.07 4" 14.77 3.50 16.67 304.46 3.21 1.00 3.21 307.67 6" 14.77 3.50 33.33 608.92 3.21 1.00 3.21 612.14 8" 14.77 3.50 53.33 974.28 3.21 1.00 3.21 977.49 10" 14.77 3.50 80.00 1,461.41 3.21 1.00 3.21 1,464.63 12" 14.77 3.50 112.50 2,055.11 3.21 1.00 3.21 2,058.33 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-2

Table 4-2 Proposed Minimum Monthly Service Charge (Water)

Table 4-3 demonstrates the recycled water cost elements incorporated into the minimum monthly service charge for FY 2024. Table 4-4 shows the Recycled Water Utility three-year fixed service charge rate schedule.

Table 4-3 Costs within the Minimum Monthly Service Charge for FY 2024 (Recycled Water)

Table 4-4 Proposed Minimum Monthly Service Charge (Recycled Water)

Proposed
Customer Class FY 202 4 FY 2025 FY 2026
Minimum Monthly Meter Rates ($/Month) $/month $/month $/month 5/8" x 3/4" 21.48 23.36 25.42 1" 33.66 36.73 40.05
1-1/2" 64.10 70.16 76.63
2" 100.64 110.28 120.53
3" 198.07 217.27 237.60
4" 307.67 337.63 369.29
6" 612.14 671.96 735.12
8" 977.49 1,073.16 1,174.12
10" 1,464.63 1,608.10 1,759.44
12" 2,058.33 2,260.05 2,472.81
Meter Services Billing
Meter Mtr Unit Meter Adjusted Adjusted Total Service
Size Cost Ratio Unit Cost Unit Cost Bill Ratio Unit Cost Charge per EM $ pe r Bill $ $/Month
5/8" x 3/4" 15.59 1.00 15.59 1.04 1.00 1.04 16.64 1" 15.59 1.67 25.99 1.04 1.00 1.04 27.03 1-1/2" 15.59 3.33 51.98 1.04 1.00 1.04 53.02 2" 15.59 5.33 83.16 1.04 1.00 1.04 84.21 3" 15.59 10.67 166.33 1.04 1.00 1.04 167.37 4" 15.59 16.67 259.89 1.04 1.00 1.04 260.93 6" 15.59 33.33 519.77 1.04 1.00 1.04 520.82 8" 15.59 53.33 831.64 1.04 1.00 1.04 832.68 10" 15.59 80.00 1,247.45 1.04 1.00 1.04 1,248.50 12" 15.59 112.50 1,754.23 1.04 1.00 1.04 1,755.27 Proposed
Customer Class FY 202 4 FY 2025 FY 2026
Minimum Monthly Meter Rates ($/Month) $/month $/month $/month 5/8" x 3/4" 16.64 18.28 20.23 1" 27.03 29.78 33.02
1-1/2" 53.02 58.53 64.99
2" 84.21 93.03 103.36
3" 167.37 185.04 205.69
4" 260.93 288.55 320.80
6" 520.82 576.08 640.55
8" 832.68 921.11 1,024.26
10" 1,248.50 1,381.16 1,535.87
12" 1,755.27 1,941.83 2,159.39
I
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City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-3

4.2.2 Fire Service
The fire service charge includes costs of issuing bills and maintenance and capacity costs associated with private fire protection. The fire service charge increases as pipeline diameter size increases. The Water Utility provides fire service to approximately 1,280 private fire service accounts. These customers have a water line connection to the water system specifically for fire protection. The Water Utility must design, operate, and maintain a water system that can meet peak fire demand requirements to meet fire protection demands. The Water Utility charges these accounts a fire service charge based on the diameter of the line that connects their fire protection system to the water system. Table 4-5 demonstrates the costs incorporated into the fire service charge, and Table 4-6 shows the three-year rate schedule based on unit costs in future years.

Table 4-5 Costs within the Fire Service Charge for FY 2024

Table 4-6 Proposed Fire Service Charge

4.2.3 Cross Connection
The cross-connection charge includes costs of issuing bills and maintenance and replacement costs associated with backflow devices. The cross-connection charge increases as pipeline diameter size increases. The Water Utility provides backflow services to approximately 2, 805 accounts. These customers have a backflow device that prevents possible contaminated water from entering the water system. The Water Utility maintains and replaces the devices accordingly to ensure that the devices are working properly. The Water Utility charges the accounts a cross-connection charge based on the diameter of the line that connects their service to the water system. Table 4-7 demonstrates the costs incorporated into the cross-connection charge, and Table 4-8 shows the three-year rate schedule.

Private Fire Protection Total
Meter Uni
t Meter Adjusted Service
Size Cost Ratio Unit Cost Charge
per EH $/Month
2" 49.15 0.06 2.95 2.95 4" 49.15 0.34 16.71 16.71 6" 49.15 1.00 49.15 49.15 8" 49.15 2.13 104.68 104.68 10" 49.15 3.83 188.23 188.23 12" 49.15 6.19 304.21 304.21 Proposed
Customer Class FY 2024 FY 2025 FY 2026
Fire Service ($/Month) $/month $/month $/month
2" 2.95 3.12 3.29
4" 16.71 17.66 18.67
6" 49.15 51.93 54.91
8" 104.68 110.61 116.97
10" 188.23 198.89 210.32
12" 304.21 321.45 339.92
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City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-4

Table 4-7 Costs within the Cross-Connection Charge for FY 2024

Table 4-8 Proposed Cross Connection Charge

4.2.4 Consumption Charge
This consumption charge is designed to recover costs associated with the base and extra capacity demands. These costs include fixed and variable costs incurred by the water and recycled water system while providing the average annual usage and peaking demands. While most of the costs are fixed, such as personnel and direct and indirect charges, variable costs represent most of the costs through water production and water purchase. Table 4-9 shows the three-year rate schedule for both the Water and Recycled Water Utilities. For the Recycled Water Utility, the industrial process is part of general customers.

Table 4-9 Proposed Consumption Charges

Cross Connection Total
Meter Uni
t Meter Adjusted Service
Size Cost Ratio Unit Cost Charge
per EM $/Month
1" 10.78 0.63 6.73 6.73 2" 10.78 1.00 10.78 10.78 3" 10.78 2.00 21.55 21.55 4" 10.78 3.13 33.67 33.67 6" 10.78 6.25 67.34 67.34 8" 10.78 10.00 107.75 107.75 10" 10.78 15.00 161.63 161.63 Proposed
Customer Class FY 2024 FY 2025 FY 2026
Cross Connection ($/Month) $/month $/month $/month
1" 6.73 6.97 7.39
2" 10.78 11.15 11.82
3" 21.55 22.29 23.64
4" 33.67 34.83 36.94
6" 67.34 69.67 73.88
8" 107.75 111.47 118.21
10" 161.63 167.20 177.32
Proposed
Customer Class FY 2024 FY 2025 FY 2026
$/HCF $/HCF $/HCF
Consumption Charges ($/HCF)
Water Utility
General Customer 7.97 8.70 9.49 Recycled Water Utility
General Customers 4.53 5.03 5.58 I
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I
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City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-5

4.3 Typical Monthly Costs under Proposed Charges
Table 4-10 and Table 4-11 compare typical monthly costs under existing rates and the proposed schedule of water and recycled water user rates derived in this study.

Table 4-10 Typical Monthly Bill (Water)

Table 4-11 Typical Monthly Bill (Recycled Water)

4.4 Neighboring Water Utilities
Presented in Figure 4-1 are the proposed rates compared to rates of neighboring cities for a single-family residential customer with a 5/8” x ¾” meter consuming 12 units of water. Based on the comparison, the City is currently one of the lowest water providers in the area. With the proposed rate increases, the City remains the lowest water provider of the surveyed communities. All surveyed community rates are current as of June 1, 2023.

Typical FY 2023 FY 2 024
Monthly Existing Proposed
Customer Class Usage Rates Rates
(HCF) ($) ($)
Water Utility
General Customer 0 $20.54 $21.48
3 $20.54 $21.48
5 $36.65 $39.84
10 $73.30 $79.67
12 $87.96 $95.61
20 $146.60 $159.34
30 $219.90 $239.02
40 $293.20 $318.69
50 $366.50 $398.36
Typical FY 2023 FY 2 024
Monthly Existing Proposed
Customer Class Usage Rates Rates
(HCF) ($) ($)
Recycled Water Utility
General Customer 0 $15.50 $16.64
3 $15.50 $16.64
5 $20.60 $22.66
10 $41.20 $45.33
12 $49.44 $54.39
20 $82.40 $90.65
30 $123.60 $135.98
40 $164.80 $181.31
50 $206.00 $226.64
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-6

Figure 4-1 Comparison to Neighboring Water Utilities

$200.00
$180.00
$160.00
$140.00
a5 $120.00
> ::c $100.00 ....

C
0 $80.00 2
$60.00
$40.00
$20.00
$0.00
Santa Clara Sunnyvale Santa Clara San Jose View SJWC Milp itas Palo Alto Current Proposed Proposed Proposed Proposed Proposed Proposed Proposed ■ WATER RATE 12 HCF $87.96 $78.48 $9S.64 $118.21 $115.55 $126.62 $117.65 $138.30 ■ SEWER RATE $46.82 $62.34 $48.28 $45.49 $53.11 $45.49 $64.22 $48.64 ■ COMBINED $134.78 $140.82 $143.92 $163.70 $168.66 $172.11 $181.87 $186.94 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Sewer Utility 5-1

Sewer Utility

5.0 Revenue and Revenue Requirements
To meet the costs associated with providing sewer services to its customers, the Sewer Utility derives revenue from a variety of sources, including sewer user charges (rates), o utlet charges, conveyance fees, connection charges, interest earned from the investment of available funds, engineering fees, and other miscellaneous revenues. The Sewer Utility is constantly looking for other sources of revenue, such as loans, bonds, and grants. Black & Veatch has projected the level of future revenue generated in the Study through an analysis of historical and future system growth in terms of the number of EDUs, bills, and contributed sewage flow. This section also projects the expenses, or revenue requirements, necessary to operate and maintain the system, invest in capital improvements, make debt service payments, and cover other sewer system expenses.

5.1 CUSTOMER AND WATER CONSUMPTION PROJECTIONS

5.1.1 Customer Classes
The Sewer Utility’s customers include both residential and non-residential customers. The City has the following customer classes:
 Residential: Single-family residential and multi-family residential.  Non-Residential: Amusement Parks; Auto Dealers & Service Stations ; Churches; Electric & Electronic Equipment; Food & Kindred Products; Hospitals & Convalescent Homes; Industrial Chemical; Industrial Water Treatment; Laundries; Machinery Manufacturers; Metal Plating; Motels & Hotels; Paper; Repair Shops & Car Washes; Restaurants; Schools & Colleges; and Commercial/Industrial/Miscellaneous (catch-all for remainder of non-residential customers).  Major Users: Major Users customer class is composed of major commercial and industrial users who are identified based on the following:
2 ● Have a sewage discharge of at least 25,000 gallons per day; or ● Have a daily discharge that is intermittent or irregular in strength, amount, or nature.

5.1.2 Equivalent Dwelling Units
The City provides sewer services to approximately 26,000 customers. All customers generating sewage flow connect to the sewer system. Since the City bills residential customers based on EDUs, a review of historical EDUs patterns for customers, and anticipated growth within the City, the projected total number of EDUs is expected to grow at 0.1% annually over the Study period. An EDU represents a single -family residential customer equivalent with a flow of 245 gallons per day and strengths of 250 mg/L of Biological Oxygen Demand (BOD), 250 mg/L of Total Suspended Solids (TSS), and 35 mg/L of Ammonia (NH3).

Table 5-1 summarizes the projected number of EDUs for the Sewer Utility.

2 City Website, Schedule S-16 Monthly Sewer Service Charges, <http://www.santaclaraca.gov/government/departments/water- sewer-utilities/water-sewer-and-recycled-water-rates/sewer-rates> City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-2

Table 5-1 EDUs

5.1.3 Minimum Bills
The City bills non-residential customers primarily on contributed sewage flow and imposes a minimum bill on those whose flow charges do not exceed the included volume allowance within the monthly service charge. The City refers to these bills as minimum monthly service bills. Therefore, a review of historical minimum bills patterns for non-residential customers and anticipated growth within the City, the projected total number of minimum bills are expected to grow 0.5% annually over th e Study period.

Table 5-2 summarizes the projected number of minimum monthly service bills for the Sewer Utility.

Table 5-2 Minimum Monthly Service Bills

5.1.4 Contributed Sewage Flow
The City charges all its non-residential customers based on contributed sewage flow, which is determined by multiplying water consumption by a return factor. In determining the projected sewag e flow, Black & Veatch analyzed historical sewage flow patterns in conjunction with a projected estimate of future water consumption. Since 2016, water consumption has slowly increased from historic lows experienced during mandated drought restrictions. Despite the increase, the City’s Water Shortage Contingency Plan remains in effect, and customers have made conservation a way of life. The Water Utility, therefore, expects consumption to continue to rebound slowly. Experience would indicate that after strict water Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
(EDUs) (EDUs) (EDUs)
1 Single Fam ily 247,975 248,223 248,471 2 Multi Fam ily 297,188 297,485 297,782 3 Total 545,163 545,708 546,253
Line No. Description
Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
(Bills) (Bills) (Bills)
1 Amusement Parks 111 112 113 2 Auto Deal ers & Servi ce Stati on 370 372 374 3 Churches 238 239 240 4 Com m e rcial/Industrial/Misce llane ous 9,710 9,759 9,808 5 Electric & Electronic Equip. 396 398 400 6 Food and Kindred Products 24 24 24 7 Hospi tal s & Conval escent Homes 299 300 302 8 Industrial Chemical 47 47 47 9 Laundries 121 122 123 10 Machinery Manufacturers 671 674 677 11 Me tal Plating 91 91 91 12 Motel s & Hotel s 43 43 43 13 Paper 13 13 13 14 Repair Shops & Car Washes 462 464 466 15 Restaurants 234 235 236 16 Schools & Colleges 500 503 506 17 Total 13,330 13,396 13,463
Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-3

conservation measures are lifted, the rebound in consumption is usually associated with discretionary water such as irrigation. Much of this water does not make it to the sewer system; therefore, the City projects that sewage flow will grow by 0.5% annually over the Study period.

Table 5-3 shows the projected sewage flow generated for the Study period. The City contributed sewage flow in units of HCF for non-residential customers.

Table 5-3 Contributed Sewage Flow

5.1.5 Major Users
The City charges major commercial and industrial sewer customers based on contributed sewage flow and strength loadings. Major users are identified individually, as each customer places different burdens on the sewer system. The City had one identified Major User customer.

Table 5-4 shows the flow and loadings associated with this customer over the Study period.

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
(HCF) (HCF) (HCF)
1 Amusement Parks 67,971 68,311 68,653 2 Auto Deal ers & Servi ce Stati on 23,321 23,438 23,555 3 Churches 16,517 16,600 16,683
4 Com m e rcial/Industrial/Misce llane ous 1,251,602 1,257,860 1,264,149 5 Electric & Electronic Equip. 462,397 464,709 467,033 6 Food and Kindred Products 17,978 18,067 18,158 7 Hospi tal s & Conval escent Homes 91,140 91,596 92,054 8 Industrial Chemical 13,642 13,711 13,780 9 Laundries 24,340 24,462 24,584
10 Machinery Manufacturers 37,858 38,047 38,237 11 Me tal Plating 6,682 6,715 6,749 12 Motel s & Hotel s 107,455 107,992 108,532 13 Paper 140,821 141,525 142,233
14 Repair Shops & Car Washes 11,309 11,366 11,423 15 Restaurants 75,560 75,938 76,318 16 Schools & Colleges 42,427 42,639 42,852 17 Total (HCF) 2,391,020 2,402,976 2,414,993
18 Total (AF) 5,489 5,516 5,544 Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-4

Table 5-4 Major Users

5.2 Revenue under Existing Rates
Sewer user rates serve as the primary source of revenue for the Sewer Utility. Therefore, the level of future rate revenue is important in developing a long-range financial plan. Rate revenue is determined by multiplying the projected system growth in terms of the number of EDUs, minimum monthly service bills, contributed sewage flow, and major user flow and loadings by the applicable rates to determine sewer rate revenue.

Table 5-5 shows the Sewer Utility’s current schedule of charges. It is important to note that the minimum monthly service charge applies to non-residential customers that do not exceed the base amount.

Therefore, the minimum monthly service charge serves as a baseline cost that the City needs to recover.

The City maintains a separate schedule of rates based on the customer classes identified in Section 5.1.

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
Major Users
Operating and Maintenance Cost Recovery
1 Vol ume (MG) 95 95 95 2 BOD (1,000 lbs) 989 989 989 3 SS (1,000 lbs) 443 443 443 4 NH3 (1,000 lbs) 8 8 8 Annual Capital Cost Recovery
5 Vol ume (MGD) 0.26 0.26 0.26 6 BOD (1,000 lbs/day) 2.71 2.71 2.71 7 SS (1,000 lbs/day) 1.21 1.21 1.21 8 NH3 (1,000 lbs/day) 0.02 0.02 0.02 Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-5

Table 5-5 Existing Sewer Rates

Table 5-6 summarizes projected sewer rate revenue under existing rates. As shown, the revenue generated stays relatively flat over the Study period in conjunction with the number of EDUs, minimum bills, billed sewage flow, and major user volume and loadings. The projected Sewer Utility revenues increase from $39.8M in FY 2024 to $40.0M in FY 2026.

Existing Existing
FY 2
023 FY 2023
Residential ($/EDU) Major Commercial and Industrial Users Single Fam ily 46.82 Annual Capital Cost Recovery Multi-Fam ily 44.69 Vol ume (per MGD) 1,087,371 BOD [2] (per 1,000 lbs/day) 75,537
Non-Residential [1] ($/HCF) SS [3] (per 1,000 lbs/day) 52,105 Amusement Parks 5.67 NH3 [4] (per 1,000 lbs/day) 178,596 Auto Deal ers & Servi ce Stati on 6.17
Churches 5.15 Operating and Maintenance Cost Recovery Com/Ind/Misc 5.41 Vol ume (per MG) 2,993.84 Electric & Electronic Equip. 5.11 BOD [2] (per 1,000 lbs) 497.33 Food and Kindred Products 12.60 SS [3] (per 1,000 lbs) 628.54 Hospi tal s & Conval escent Homes 6.21 NH3 [4] (per 1,000 lbs) 5,159.79 Industrial Chemical 9.29
Laundries 5.57
Machinery Manufacturers 7.57
Me tal Plating 4.14
Motel s & Hotel s 6.59
Paper 12.94
Repair Shops & Car Washes 4.77
Restaurants 12.83
Schools & Colleges 6.00

1. In no case shall the minimum charge be less than $46.82 per month.

Description Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-6

Table 5-6 Projected Revenue under Existing Rates

5.3 Other Revenue
Other operating sources include charges for revenue from other agencies served by Santa Clara, sewer lateral video inspections, sewer clean-out installations, interest on investments, and other miscellaneous revenues. In total, other operating revenues represent 2.5% of the Sewer Utility’s total revenue. The City anticipates that these revenues will remain relatively constant for the duration of the Study period.

5.4 Operating and Maintenance Expenses
Table 5-7summarizes the Sewer Utility’s projected O&M expenses for the Study Period. These expenses include costs related to salaries and benefits, materials and supplies, contract and professional services, RWF costs, indirect and direct costs, and routine capital outlay. The City anticipates that all O&M expenditures, excluding Water Pollution Control Plant costs, will increase on average by 4.1 % annually from the FY 2024.

The Sewer Utility receives treatment services from the RWF operated and maintained by the City of San Jose. While the City has an ownership stake in the RWF, the City must still pay for O&M associated with operating the facility. Based on the City of San Jose estimates, the City expects RWF O&M costs to increase by approximately 3.0% annually over the Study period.

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
($) ($) ($)
1 Single Fam ily 11,735,700 11,747,400 11,759,200 2 Multi-Fam ily 13,281,700 13,295,000 13,308,300
3 Amusement Parks 390,600 392,500 394,600 4 Auto Deal ers & Servi ce Stati on 161,200 162,000 162,800 5 Churches 96,200 96,700 97,100
6 Com/Ind/Misc 7,225,800 7,261,900 7,298,200
7 Electric & Electronic Equip. 2,381,300 2,393,300 2,405,200 8 Food and Kindred Products 178,000 179,000 179,800 9 Hospi tal s & Conval escent Homes 580,000 582,800 585,800 10 Industrial Chemical 67,200 67,500 67,900 11 Laundries 141,300 142,000 142,700
12 Machinery Manufacturers 318,000 319,600 321,200 13 Me tal Plating 32,000 32,100 32,200 14 Motel s & Hotel s 710,100 713,700 717,200 15 Paper 1,213,100 1,219,200 1,225,300
16 Repair Shops & Car Washes 75,500 75,900 76,300 17 Restaurants 980,400 985,300 990,200 18 Schools & Colleges 278,000 279,400 280,800 19 Major Users - Customer 1 0 0 0 20 Total 39,846,100$ 39,945,300$ 40,044,800$
Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-7

Table 5-7 O&M Expenses

As shown in Table 5-7, the Sewer Utility’s O&M expenses increase from $30.1M in FY 2024 to $32.1M in FY 2026.

5.5 Debt Service Requirements
Table 5-8 represents the Sewer Utility’s existing and proposed debt service obligations. This table shows the combined principal and interest requirements on the existing debt over the Study period. It is common practice for utilities to debt finance large capital improvement projects, such as in the case of Trimble Road sewer trunk line replacement in Santa Clara. By financing the cost of the projects, the City can fund large projects immediately and spread the payment over a specified time frame, thereby helping to offset the impact on ratepayers.

Table 5-8 Long-Term Debt Service

5.6 Capital Improvement Program
The Sewer Utility annually develops a five-year Capital Improvement Plan to identify sewer system needs, including ongoing assessments, maintenance, and renewal and replacement requirements.

Table 5-9 summarizes the Sewer Utility’s CIP for FY 2024 through FY 2026. The Sewer Utility is projecting $51.5M in CIP over the Study period, including capital and replacement projects. The City has posted the CIP Budget on its website for complete details associated with each CIP project.

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
($) ($) ($)
1 Salaries 3,151,900 3,296,900 3,415,600
2 Benefi ts 1,756,500 1,842,300 1,934,200
3 Mate rials/Se rvice s/Supplie s 589,000 600,800 612,800 4 Interfund Services 3,404,925 3,532,405 3,685,255 5 Resource & Production 19,912,900 20,510,300 21,125,600 6 Capital Outlay 1,248,000 1,297,900 1,349,800 7 Total 30,063,225$ 31,080,605$ 32,123,255$
Line No. Description
Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026
($) ($) ($)
1 Existing Short and Long-Term Loan 2,842,600 2,842,900 2,843,400 2 Proposed Short-Term and Rev Bonds 0 0 0 3 Total 2,842,600$ 2,842,900$ 2,843,400$
Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-8

Table 5-9 Capital Improvement Projects

5.6.1 Capital Improvement Financing Plan
The City funds annual expenditures for the CIP from a combination of available funds on hand, outlet charges, conveyance fees, debt financing, connection charges, developer contributions, and revenues derived from user rates. As shown in Table 5-10, the average annual CIP expenditure is $17.1 for the Sewer Utility. The planned average annual CIP contribution from the Sewer Utility Operating Fund is $11.3M per year over the Study period.

Table 5-10 Construction Fund Financing Plan

5.7 Transfers
The Sewer Utility will perform transfers over the Study period from the Operating Fund and other funds.

The other funds consist of the Rate Stabilization Fund, Pension Stabilization Fund, and Construction Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
($) ($) ($)
1 1908 SJ-SC Re gional Waste wate r Facility 12,886,300 15 ,614,300 11,342,900 2 1909 Sanitary Sewer Capacity
Improvements 217,400 225 ,600 234,200 3 1911 Sanitary Sewer System Condition
A ssessment 518,900 538 ,600 0
4 1912 Sani tary Sewer System Improvements 6,746,000 0 2 ,235,700 5 1919 Sanitary Sewer Hydraulic Modeling As
Needed Support 124,500 129 ,300 335,400 6 Total 20,493,100$ 16,507,800$ 14,148,200$
Line No. Description
Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
Source of Funds
1 Sanitary Outlet Charge 0 0 0 2 Sewer Conveyance Fee 3,500,000 3,500,000 3,500,000 3 Intra Transfer In - Debt Financing 0 0 0 4 Intra Transfer In - Customer Service Charge 14,000,000 14,000,000 15,000,000 5 Refund from San Jose/Cupertino 0 0 0 6 Total Sources 17,500,000$ 17,500,000$ 18,500,000$
Use of Funds
7 Improvements Projects 7,389,400 667,900 2,571,100 8 Total Uses 7,389,400$ 667,900$ 2,571,100$
9 Net Annual Cash Balance 10,110,600 16,832,100 15,928,900 10 Beginning Unrestricted Fund Balance 12,097,062 9,321,362 10,539,162 11 Net Cumulative Fund Balance 22,207,662$ 26,153,462$ 26,468,062$ 12 Minimum Construction Reserves 8,475,050$ 8,242,550$ 17,316,300$ Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-9

Fund. See Section 5.8 for further explanation on Rate Stabilization and Pension Stabilization Funds. The Construction Fund transfers represent money to cover planned CIP project expenditures. All these transfers do not represent direct operating expenses for the enterprise. Therefore Black & Veatch includes these costs as “below-the-line” cash flow items and not included as O&M expenses. Table 5-11, Lines 19 to 21 for the Sewer Utility reflect these associated amounts.

5.8 Reserves
A utility typically establishes reserves for several reasons, such as covering shortfalls in operating revenues, maintaining strong bond ratings, covering day-to-day operating costs, and easing the burden on ratepayers associated with large rate increases. Per the reserve policy, the Sewer Utility will maintain the following four reserves:
 Operating Reserve represents working capital maintained by the Operating Fund to cover day-to- day expenses and maintain enough funds to cover accounts receivables if there are supplier issues, periods of lower-than-expected sewer revenues, or unforeseen cost increases. The reserve will maintain a minimum balance of 90 days of operating expenses once fully funded  Construction Reserve represents funds used for unforeseen and unbudgeted capital costs. Once fully funded, this reserve will maintain a minimum balance of 12-months of the following year’s planned City CIP and 6-months of the following year’s planned RWF CIP.  Rate Stabilization Reserve represents funds used to absorb revenue shortfalls due to short- term decreases in sewer sales. This reserve is designed to stabilize sewer rate revenue and avoid wide swings in rates charged to customers over time. The reserve will maintain a minimum balance of 10% of sewer rate revenue when fully funded.
 Pension Stabilization Reserve represents funds used to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPERS rates and negotiated pay increases. The reserve target is $1.2M for the Sewer Utility by FY 2030.

Appropriate reserve levels help the Sewer Utility maintain liquidity and demonstrate to the rating agencies that the City’s financial policies and practices are focused on maintaining a balanced financial position.

5.9 Projected Operating Results
The revenue requirements of the Sewer Utility consist of O&M expenses, debt service, capital expenditures, and reserve requirements.

It is important to examine the cash flow projections under the status quo scenario to fully understand the current condition of the Sewer Utility and the need for revenue adjustments. As shown in Figure 5-1, the status quo conditions would project that the Sewer Utility would operate from an annual deficit position, thus tapping into its reserves. In this scenario, the Sewer Utility would not impose any revenue increases over the Study Period and continue to incur O&M expenses, pay for the execution of the planned CIP, and transfer to reserves.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-10

Figure 5-1 Status Quo Operating Cash Flow

The Sewer Utility will fall into a deficit position if the City does not implement the revenue increases, as shown in Figure 5-1. The revenue increases represent the overall total revenue adjustment needed to meet revenue requirements. The revenue adjustment does not represent adjustments to the individual rates but reflects the overall level of revenue needed to meet the Sewer Utility’s obligations.

The suggested revenue increases help the Sewer Utility meet the following goals:
 Meet budgeted operating obligations in the three FYs.  Meet planned capital investments in the three FYs.
 Maintain an operating reserve of 90 days of operating expenses.  Maintain construction reserve of 12-months of next year’s CIP for City projects and 6-months of next year’s CIP for the RWF.
 Continue to fund the rate stabilization reserve to reach its goal of 10% of rate revenues.  Continue transfers for the pension stabilization reserve to meet the FY 2030 goal.

Shown in Table 5-11 is a summary of the proposed Operating Fund for the Study Period. The Opera ting Fund consists of 1) Revenue and 2) Revenue Requirements.

Revenue
 Line 1 is the revenue under existing rates.
 Lines 2 through 4 are the additional revenue generated from the required annual revenue increases. The additional revenue generated is a direct reflection of the number of months the increase is effective for, and therefore amount might calculate at less than that stated amount.  Line 6 is the total revenue generated from user charges.  Line 12 represents other operating revenues.
 Line 13 represents total revenues for the enterprises. $60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
Sl0,000,000
so
-$10,000,000
-$20,000,000
- O&M
-e- ReJenue
Sewer Utility - Operating Fund
-
2024 2025 -------~~6
- Debt Service - Capital P roj etts - R i:i:e St abili2i:i:ion -e- Cash Balance -., Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-11

Revenue Requirements
 Line 15 represents O&M expenses. The O&M expenses include RWF costs.  Line 18 represents debt service payments.
 Line 22 represents transfers. The transfers include money to the Rate Stabilization Fund, Other Fund, Pension Fund, and Construction Fund.
 Line 23 represents total revenue requirements.

Line 26 represents the net cumulative cash balance within the Operating Funds. The net cumulative cash balance intends to match, to the extent possible, Line 27. The cash balance reserve is required to ensure the Operation Fund can continue in the event of a supplier interruption, market price fluctuations of critical equipment or supplies or an abrupt drop in account receivables. The reserve target minimum is 90 days of O&M expenses. Line 28 represents the debt service coverage. Currently, the City does not have debt coverage requirements for the short-term loans, but the operating cash flow is set up to achieve a debt service coverage of 1.25x requirement is met in all years. The requirement will come into effect when long-term debt is used to refinance the short-term loans. The lending financial institution sets the debt service coverage ratio via a rate covenant that will also obligate the City to increase revenues as needed to meet the minimum debt service coverage requirement.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-12

Table 5-11 Operating Fund (Sewer)

Fiscal Year Ending June 30,
FY 2024 FY 2 025 FY 2026
Revenue
Rate Revenue
1 Revenue from Exi sti ng Rates 39,888,000 39,987,300 40,086,800 Year
Months
Effective Rate Adj
2 2024 12 6.25% 2,493,000 2 ,499,200 2,505,400 3 2025 12 9.00% 3,823,800 3,833,300
4 2026 12 9.00% 4,178,300
5 Increased Revenue Due to Adjustments 2,493,000 6,323,000 10,517,000 6 Subtotal Rate Revenue 42,381,000$ 46,310,300$ 50,603,800$ Other Operating Revenue
7 System Administration (Interest Income) 622,300 633,800 645,600 8 System Maintenance 98,300 98,300 98,300 9 Operations 350,000 350,000 350,000
10 SJ SC Wate r Pollution Control Plant 0 0 0 11 Storm Pump Maintenance 0 0 0 12 Subtotal Other Operating Revenue 1,070,600$ 1,082,100$ 1,093,900$ 13 Total Revenue 43,451,600$ 47,392,400$ 51,697,700$
Revenue Requirements
Operating & Maintenance
14 O&M Expenses 31,491,500 32,537,500 33,609,300
15 Subtotal O&M 31,491,500$ 32,537,500$ 33,609,300$
Debt Servi ce
16 Existing Loans/Bonds 2,842,600 2,842,900 2,843,400 17 Proposed Loans/Bonds 0 0 0 18 Total Debt Servi ce 2,842,600$ 2,842,900$ 2,843,400$ Transfers
19 Transfer to Rate Stabilization Fund 250,000 500,000 750,000 20 Transfer to Pension Stabilization Fund 78,200 78,200 78,200 21 Transfer to Sewer Construction Fund 14,000,000 14,000,000 15,000,000 22 Total Transfers 14,328,200$ 14,578,200$ 15,828,200$ 23 Total Revenue Requirements 48,662,300$ 49,958,600$ 52,280,900$ 24 Net Annual Cash Balance (5,210,700) (2,566,200) (583,200) 25 Beginning Fund Balance 17,925,987 12,715,287 10,149,087 26 Net Cumulative Fund Balance 12,715,287$ 10,149,087$ 9,565,887$ 27 Mi ni mum Operati ng Reserves (90 Days) 7,765,000$ 8,022,900$ 8,287,200$ 28 Debt Servi ce Coverage (Mi n 1.25) 4.21 5.23 6.36 Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue 5-13

Figure 5-2 presents the proposed Operating Fund.

Figure 5-2 Sewer Operating Cash Flow

$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
Sl0,000 ,000
so
- O&M
~ Re.-enue
Sewer Utility - Operating Fund
2024
- Debt Service
~ Cash Balance
- --
2025 2026
- Capital Projects. - Rcf:eSt:abiliz.cf:ion
-e- Target CcSh Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 6-1

6.0 Cost of Service Analysis
The cost-of-service analysis requires that the utility recover needed revenues from rates for sewer service, which are allocated to customer classes according to the service rendered. An equitable rate structure allocates the capture of revenue requirements to customer classes b ased on contributed sewage volume, strengths, number of customer connections, and other relevant factors.

In analyzing the Sewer Utility’s cost of service for allocation to its customer classes, Black & Veatch selected the annual revenue requirements for FY 2024 as the Test Year requirements to demonstrate the development of cost-of-service sewer rates. Table 6-1 summarizes the total costs of service that need to be recovered from sewer user rates. The table represents TY 202 4.

Table 6-1 Cost of Service Revenue from Rates

To derive the net revenue requirement recovered through rates, it is necessary to deduct revenues from other sources as shown in Line 10 which corresponds with Table 5-11, Line 12. Shown in Line 4 is the total revenue requirement that corresponds with Table 5-11, Line 23. Line 11 represents the net annual cash balance during the TY. If the enterprise is drawing down funds already in the Operating Fund, this number is positive. The number will be negative if the enterprise is replacing funds. In the case of the Sewer Utility, the $5.2M figure indicates that the forecast is projecting a negative cash balance for the year.

6.1 Functional Cost Components
The first step in conducting a cost-of-service analysis involves analyzing the cost of providing sewer service by system function to properly allocate the costs to the various customer classes and, subsequently, design rates. As a basis for allocating costs of service among customer classes, costs are Operating Capital Tota l
Expense Cost Cost
($) ($) ($)
Revenue Requi rements
1 O&M Expense 31,491,500 0 31,491,500 2 Debt Servi ce Requi rements 0 2,842,600 2,842,600 3 Transfers 328,200 14,000,000 14,328,200
4 Subtotal 31,819,700$ 16,842,600$ 48,662,300$
Less Revenue Requi rements Met from Other Sources
5 System Administration 622,300 0 622,300 6 System Maintenance 98,300 0 98,300 7 Operations 350,000 0 350,000 8 SJ SC Wate r Pollution Control Plant 0 0 0 9 Storm Pump Maintenance 0 0 0 10 Subtotal 1,070,600$ 0$ 1,070,600$ Adjustments
11 Adjustment for Annual Cash Balance 5,210,700 0 5,210,700 12 Subtotal 5,210,700$ 0$ 5,210,700$ 13 Cost of Servi ce to be Recovered from Rates 25,538,400$ 16,842,600$ 42,381,000$ Line No. Description
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 6-2

separated into the following four basic functional cost components: (1) Base; (2) Strength; (3) Customer; and (4) Direct Assignment, described as follows:
 Base costs represent operating and capital costs of the system associated with collection. The collection costs vary directly with the quantity of sewage flow.  Strength costs represent those operating and capital costs associated with treatment. The treatment costs are specifically related to strength parameters such as Biological Oxygen Demand, Total Suspended Solids, and Ammonia.
 Customer costs are those expenditures that tend to vary in proportion to the number of customers connected to the system. These include meter reading, billing, collecting, accoun ting, maintenance, and capital costs associated with meters and services.  Directly assigned costs are specifically identified as those incurred to serve specific customers.

The Sewer Utility has no directly assigned categories.

6.2 Allocation to Cost Components
The next step of the cost-of-service process involves allocating each cost element to functional cost components based on the parameter or parameters having the most significant influence on the magnitude of that element of cost. O&M expense items are allocated directly to appropriate cost components. A detailed allocation of related capital investment is used as a proxy for allocating capital and replacement costs. The separation of costs into functional components provides a means for distributing such costs to the various classes of customers based on their respective responsibilities for each type of service.

6.2.1 Volume and Strength Allocations
The sewer system consists of various facilities designed and operated to fulfill a given function. For the system to provide adequate service to its customers, it must be capable of meeting not only the annual volume requirements but also the strength loading demands placed on the system. Because not all customers and types of customers exert volume and strength loading demands similarly, the capacities of the various facilities must be designed to accommodate the demands of all classes of customers.

Each sewer service facility within the system has an underlying volume demand exerted by all customers for whom the base cost component applies. For those facilities designed solely to meet volume demand, 100% of the costs go to the base cost component. For facilities designed to meet strength loading demands, the percentage of the costs is allocated to the different strength cost components based on their specific function.

6.2.2 Allocation of Operating and Maintenance Expenses
The Sewer Utility books operating costs by functional categories. Therefore, Black & Veatch used the factors noted in Section 5.1 to allocate the operating expenses to the cost components. In allocating O&M expenses for TY 2024, the costs are directly allocated to the cost components to the extent possible. The allocation of Administration and Transfer cost elements is based on the average of all other costs. Table 6-2 represents the allocation of O&M to the cost components. Revenues are subtracted from other sources as shown in Table 6-1, Lines 10, and any drawdown of the cash balance is deducted and normalized for partial rate adjustments as shown in Line 13 to determine the net O&M costs.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 6-3

Table 6-2 Allocation of O&M Expenditures

6.2.3 Allocation of Capital Investments
In allocating the capital investment for TY 2024, the existing fixed assets (which serve as a proxy for the current capital investments) are allocated directly to cost components to the extent possible. Plan c apital costs can be allocated using the distribution of total net system investment across the functional cost components. The allocation of costs in this manner provides a basis for annual investment in sewer system facilities. Table 6-3 shows the total allocation of existing system investment serving sewer customers for the TY 2024. The total net system investment of $1.3M shown on Line 7 represents the Test Year original cost less accumulated depreciation of the system in service. The total net system investment reflects the Sewer Utility’s fixed asset listing ending June 30, 202 2. This value represents the original cost (book value) of the assets.

Table 6-3 Allocation of Capital Costs

6.3 Units of Service
To properly recognize the cost of service, each customer class receives its share of base, strength, and customer costs. Following the allocation of costs, the total cost responsibility for each customer class is developed using unit costs of service for each cost function and subsequently assigning those costs to the customer classes based on the respective service requirements of each. The number of units of service required by each customer class provides a means for the proportionate distribution of costs previously allocated to respective cost categories.

Line Total Common to All Customers
No. Description Cost Volume BOD TSS NH3 Customer
($) ($) ($) ($) ($) ($)
Operation & Maintenance
1 1511 System Administration 5,119,600 2,582,400 814,700 821,000 835,500 66,000 2 1512 System Maintenance 3,914,100 3,914,100 0 0 0 0 3 1514 Operations 1,437,900 1,437,900 0 0 0 0 4 1515 SJ SC Wate r Pollution Control Plant
5 Treatment 19,359,500 6,629,800 4,196,800 4,229,100 4,303,800 0 6 Custom e r Billing & Me te r Re ading 340,100 0 0 0 0 340,100 7 A ll Othe r 1,135,500 1,135,500 0 0 0 0 8 1516 Storm Pump Maintenance 184,800 184,800 0 0 0 0 9 Transfers 328,200 165,600 52,200 52,600 53,600 4,200 10 Total O&M Expenses 31,819,700$ 16,050,100$ 5,063,700$ 5,102,700$ 5,192,900$ 410,300$ Less Other Revenue
11 Mi scel l aneous Revenues 1,070,600 540,000 170,400 171,700 174,700 13,800 12 Other Adjustments 5,210,700 2,628,300 829,200 835,600 850,400 67,200 13 Net Operati ng Expenses 25,538,400$ 12,881,800$ 4,064,100$ 4,095,400$ 4,167,800$ 329,300$ Line Total Commo n to All Customers
No. Description Cost Volume BOD TSS NH3 Customer
($) ($) ($) ($) ($) ($)
Plant Assets
1 Colle ction 956,600 956,600 0 0 0 0 2 Lift Station 275,800 275,800 0 0 0 0 3 General Pl ant 101,100 101,100 0 0 0 0 4 Total Plant Assets 1,333,500$ 1,333,500$ 0$ 0$ 0$ 0$ Less Other Revenue
5 Mi scel l aneous Revenues 0 0 0 0 0 0 6 Other Adjustments 0 0 0 0 0 0 7 Net Operati ng Expenses 1,333,500$ 1,333,500$ 0$ 0$ 0$ 0$ --------
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 6-4

Table 6-4 summarizes the estimated Test Year units of service for the various customer classes. Base costs vary with the volume of sewage flow produced and distributed to customer classes on that basis.

Black & Veatch derived sewage flow information from the monthly water consumption records in the City’s CIS multiplied by a return factor. Strength costs are those associated with pollutant characteristics, and the Study allocated these costs to customer classes based on loadings. The pollutant loadings for each customer class come from recommendations of the State Water Resources Control Board, Revenue Program Guidelines, Appendix G, and the City of San Jose. The City’s commercial and industrial class consists of 17 distinct types of businesses such as retail, offices, restaurants, and hospitals. Since sampling is not an immediate possibility, the City has relied on industry standards used by the State of California. The number of bills for each customer class serves as the basis for distributing customer billing requirements.

6.4 Cost of Service Allocations
Unit costs of service are applied to each customer class’s respective service requirements to determine the cost of service for each customer class. The total unit costs of service applied to the respective requirements for each customer class results in the total cost of service for each customer class.

6.4.1 Units Costs of Service
The TY 2024 unit cost of service for each functional cost component is simply the total cost divided by the applicable units of service, as shown in Table 6-5. The capital costs on Line 3 and 4 are associated with City projects and RWF projects. These costs have been separated to determine the collection and treatment costs independently. On Line 5, the total costs represent the cost that rates need to recover, as demonstrated in Table 6-1, Line 14. The net O&M cost includes O&M (including the RWF) less revenue from other sources and adjustments. The total capital cost includes debt service payments and transfers to the Construction Fund. Line 6 represents the unit costs for the entire sewer system regardless of customer classes. After that, these unit costs are applied in allocating the costs to the specific customer classes.

6.4.2 Distribution of Costs of Service to Customer Classes Applying the unit costs to the units for each customer class produces the customer class costs. This process is illustrated in Table 6-6, in which the study applies the unit costs to the customer class units of service. The costs attributable to each customer class are based on the functional cost components described in Section 6.1. Each customer class places a burden on the system in different ways, and thus the allocation of the units is representative of this burden.

An example of the application of unit costs is shown below for illustrative purposes.

Vol Component
Uni t Cost (Tabl e 6-5, Li ne 7) 4.77$ per HCF General Customer Consumption (Table 6-6, Line 5) 67,971 HCF Total Allocated Cost 324,200$
Please note that the numbers within the tables are rounded, yet the calculations are done based on non-rounded values; therefore, results might vary.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 6-1

Table 6-4 Units of Service

Line Contributed Contributed BOD Loadings TSS Loadings NH3 Loadings No. Description Units Volume Factor Loading Factor Loading Factor Loading Bills Units of Measure (EDUs/M Bills) (HCF) (mg/L) (lbs) (mg/L) (lbs) (mg/L) (lbs) (bills) 1 Single Fam ily 251,549 1,358,265 250 2,118,500 250 2,118,500 35 296,600 248,070 2 Multi-Fam ily 297,200 1,578,510 250 2,462,000 250 2,462,000 35 344,700 27,589 3 Amusement Parks 111 67,971 130 55,100 80 33,900 11 4,700 284 4 Auto Deal ers & Servi ce Stati on 370 23,321 180 26,200 280 40,700 11 1,600 727 5 Churches 238 16,517 130 13,400 80 8,200 11 1,100 599 6 Com/Ind/Misc 9,710 1,251,602 130 1,015,100 80 624,700 11 85,900 21,251 7 Electric & Electronic Equip. 396 462,397 30 86,500 15 43,300 15 43,300 1,583 8 Food and Kindred Products 24 17,978 1,120 125,600 690 77,400 0 0 166 9 Hospi tal s & Conval escent Homes 299 91,140 230 130,800 85 48,300 15 8,500 795 10 Industrial Chemical 47 13,642 360 30,600 720 61,300 0 0 112 11 Laundries 121 24,340 150 22,800 110 16,700 5 800 352 12 Machinery Manufacturers 671 37,858 290 68,500 550 129,900 0 0 1,694 13 Me tal Plating 91 6,682 10 400 60 2,500 1 0 199 14 Motel s & Hotel s 43 107,455 310 207,800 121 81,100 7 4,700 52 3 15 Paper 13 140,821 1,250 1,098,200 560 492,000 10 8,800 48 16 Repair Shops & Car Washes 462 11,309 180 12,700 280 19,800 0 0 687 17 Restaurants 234 75,560 1,250 589,200 560 264,000 10 4,700 2,094 18 Schools & Colleges 500 42,427 130 34,400 100 26,500 30 7,900 1,074 19 Major Users - Customer 1 0 0 0 0 0 20 Total 5,327,795 8,097,800 6,550,800 813,300 307,847 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 6-1

Table 6-5 Units Cost of Service

Table 6-6 Distribution of Costs to Customer Classes

Line Total Common to All Customers
No. Description Cost Volume BOD TSS NH3 Customer
1 Net Operati ng Expense 25,538,400 12,881,800 4,064,100 4,095,400 4,167,800 329,300 2 Debt Servi ce 2,842,600 973,500 616,200 621,000 631,900 0 3 Capital Costs (City) 5,196,600 5,196,600 0 0 0 0 4 Capital Costs (SJSC) 8,803,400 6,360,800 1,272,800 761,700 408,100 0 5 Total Cost of Service 42,381,000$ 25,412,700$ 5,953,100$ 5,478,100$ 5,207,800$ 329,300$ 6 Uni ts of Servi ce 5,327,795 8,097,800 6,550,800 813,300 307,847 HCF lbs lbs lbs bills
7 Cost per Unit 4.77$ 0.74$ 0.84$ 6.40$ 1.07$ per HCF per lbs per lbs per lbs per bill
Line Total Common to All Customers
No. Description Cost Volume BOD TSS NH3 Customer
1 Cost per Unit 4.77$ 0.74$ 0.84$ 6.40$ 1.07$ per HCF per lbs per lbs per lbs per bill
Single Fam ily
2 Units 1,358,265 2,118,500 2,118,500 296,600 248,070 3 Allocation of costs of service 11,972,300 6,478,700 1,557,200 1,771,600 1,899,400 265,400 Multi-Fam ily
4 Units 1,578,510 2,462,000 2,462,000 344,700 27,589 5 Allocation of costs of service 13,634,600 7,529,200 1,809,900 2,058,800 2,207,200 29,500 Amusement Parks
6 Units 67,971 55,100 33,900 4,700 284 7 Allocation of costs of service 423,400 324,200 40,500 28,300 30,100 300 Auto Deal ers & Servi ce Stati on
8 Units 23,321 26,200 40,700 1,600 727 9 Allocation of costs of service 175,500 111,200 19,300 34,000 10,200 800 Churches
10 Units 16,517 13,400 8,200 1,100 599 11 Allocation of costs of service 103,200 78,800 9,900 6,900 7,000 600 Com/Ind/Misc
12 Units 1,251,602 1,015,100 624,700 85,900 21,251 13 Allocation of costs of service 7,811,300 5,969,900 746,300 522,400 550,000 22,700 Electric & Electronic Equip.
14 Units 462,397 86,500 43,300 43,300 1,583 15 Allocation of costs of service 2,584,400 2,205,600 63,600 36,200 277,300 1,700 Food and Kindred Products
16 Units 17,978 125,600 77,400 0 166 17 Allocation of costs of service 243,000 85,800 92,300 64,700 0 200 Hospi tal s & Conval escent Homes
18 Units 91,140 130,800 48,300 8,500 795 19 Allocation of costs of service 626,600 434,700 96,200 40,400 54,400 900 - --------
------
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Ana 6-2

Table 6-6 Distribution of Costs to Customer Classes (Con’t)

Line Total Common to All Customers
No. Description Cost Volume BOD TSS NH3 Customer
1 Cost per Unit 4.77$ 0.74$ 0.84$ 6.40$ 1.07$ per HCF per lbs per lbs per lbs per bill
Industrial Chemical
20 Units 13,642 30,600 61,300 0 112 21 Allocation of costs of service 139,000 65,100 22,500 51,300 0 100 Laundries
22 Units 24,340 22,800 16,700 800 352 23 Allocation of costs of service 152,400 116,100 16,800 14,000 5,100 400 Machinery Manufacturers
24 Units 37,858 68,500 129,900 0 1,694 25 Allocation of costs of service 341,400 180,600 50,400 108,600 0 1,800 Me tal Plating
26 Units 6,682 400 2,500 0 199 27 Allocation of costs of service 34,500 31,900 300 2,100 0 200 Motel s & Hotel s
28 Units 107,455 207,800 81,100 4,700 523 29 Allocation of costs of service 763,800 512,500 152,800 67,800 30,100 600 Repair Shops & Car Washes
30 Units 11,309 12,700 19,800 0 687 31 Allocation of costs of service 80,500 53,900 9,300 16,600 0 700 Restaurants
32 Units 75,560 589,200 264,000 4,700 2,094 33 Allocation of costs of service 1,046,700 360,400 433,200 220,800 30,100 2,200 Schools & Colleges
34 Units 42,427 34,400 26,500 7,900 1,074 35 Allocation of costs of service 301,600 202,400 25,300 22,200 50,600 1,100 36 TOTAL COSTS OF SERVICE 42,381,000$ 25,412,700$ 5,953,100$ 5,478,100$ 5,207,800$ 329,300$ City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 7-1

7.0 Rate Design
The initial consideration in the derivation of rate schedules for sewer service is establishing equitable charges to the customers commensurate with the cost of providing that service. While the cost- of-service allocations to customer classes should not be construed as literal or exact determinations, they offer a guide to the necessity for, and the extent of, rate adjustments. Practical considerations sometimes modify rate adjustments by considering additional factors such as the extent of bill impacts, existing contracts, and historical local policies and practices.

7.1 Existing Rates
The Sewer Utility’s existing rates consist of a fixed component in the form of a monthly service charge and a variable component in the form of a consumption charge. The monthly service charge is a flat fee based on EDUs and is applied to residential customers. The monthly service charge also is a minimum for non-residential customers and applies when the consumption charge is less than the monthly service charge. Non-residential customers also have a consumption charge based on units of water consumption (1 unit = 1 HCF = 748 gallons) multiplied by a return factor. The City has separate charges for major users consisting of O&M and capital components. Table 5 5, presented earlier in this report, summarizes the current sewer rates.

7.2 Proposed Rates
The costs of service analysis described in the preceding sections of this report provide a basis for designing sewer rates.

7.2.1 Monthly Service Charge
The monthly service charge is designed to recover residential costs associated with contributed sewage flow, strength loadings, billing, collecting, accounting, and maintenance and capital costs. The charge is a flat monthly fee based on EDUs. An EDU is defined in Section 5.1. In FY 2023, the multi -family rate was separated from single-family and became a stand-alone customer class. In FY 2022, the City obtained EDU information for the multi-family customers, enabling a separation of the customer classes.

The monthly service charge also serves as the minimum monthly service charge for non -residential customers. The minimum service charge will recover non-residential costs associated with volume, strength, meter reading, billing, collecting, accounting, and maintenance and capital costs. The minimum monthly service charge incorporates an allowance for sewage flow. Once a customer exceeds the allowance, the minimum monthly service charge goes away.

Table 7-1 shows the forecasted proposed three-year monthly service charge rate schedule.

Table 7-1 Proposed Monthly Service Charge

7.2.2 Consumption Charge
The consumption charges are designed to recover the remainder of the cost component costs not recovered through the monthly service charge for non-residential customers. Table 7-2 shows the forecasted proposed three-year rate schedule for the Sewer Utility.

Table 7-2 Proposed Consumption Charges

7.2.3 Major Users
The major commercial and industrial user charge is designed to recover the costs associated with O&M and capital for major users. Major users are classified based on requirements in Section 5.1. These customers are monitored monthly for volume and strength loadings. Major users are charged the unit charges identified in Table 6-5, Line 7. Note that the major user charges are specifically identified O&M and capital components. Charges for all other customers incorporate these charges, but the City has combined them into a single rate for simplicity. Table 7-3 shows the three-year rate schedule based on unit costs in future years.

Line Proposed
No. Customer Class FY 2024 FY 2025 FY 2026
Commodity Charge ($/HCF) $/HCF $/HCF $/HCF
1 Amusement Parks 6.15 6.53 7.15
2 Auto Dealers & Service Station 6.76 7.30 7.96
3 Churches 5.55 5.87 6.44
4 Com/Ind/Misc 5.87 6.22 6.82
5 Electric & Electronic Equip. 5.55 5.80 6.40
6 Food and Kindred Products 13.45 15.27 16.31
7 Hospitals & Convalescent Homes 6.72 7.22 7.87
8 Industrial Chemical 10.02 11.14 12.00
9 Laundries 6.02 6.39 7.00
10 Machinery Manufacturers 8.16 8.99 9.72
11 Metal Plating 4.50 4.63 5.13
12 Motels & Hotels 7.09 7.66 8.33
13 Paper 13.82 15.70 16.77
14 Repair Shops & Car Washes 5.15 5.52 6.01
15 Restaurants 13.70 15.57 16.63
16 Schools & Colleges 6.54 7.02 7.66
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 7-3

Table 7-3 Proposed Major User Charges

7.3 Typical Monthly Costs under Proposed Charges
Table 7-4 compares typical monthly costs under existing rates and the proposed schedule of sewer user rates derived in this study for residential and non-residential customers.

Table 7-4 Typical Monthly Bill

7.4 Neighboring Sewer Utilities
Presented in Figure 7-1 is the proposed rates compared to rates of neighboring jurisdictions, for a single - family residential customer. Based on the comparison, the City is currently a higher cost sewer provider in the area. With the proposed rate increases, the City remains one of the higher sewer providers of the surveyed communities. All surveyed community rates are best estimates as of June 1, 2023.

Line Proposed
No. Customer Class FY 2024 FY 2025 FY 2026
Major Commercial and Industrial Users
Operating and Maintenance Cost Recovery
1 Volume ($/MG) 3,314.83 3,810.64 4,219.49
2 BOD ($/1,000 lbs) 501.88 575.41 635.86
3 SS ($/1,000 lbs) 625.18 716.78 792.12
4 NH3 ($/1,000 lbs) 5,124.55 5,875.81 6,493.18
Annual Capital Cost Recovery
5 Volume ($/MGD) 1,147,617 1,029,684 1,145,855
6 BOD ($/1,000 lbs/day) 85,145 113,507 105,097
7 SS ($/1,000 lbs/day) 77,042 97,947 91,665
8 NH3 ($/1,000 lbs/day) 466,740 556,410 528,615
Typical FY 2023 FY 2024
Monthly Existing Proposed
Customer Class Usage Rates Rates
(HCF) ($) ($)
Residential $46.82 $48.28
Non-Residential 0 $46.82 $48.28
10 $62.02 $70.15
20 $124.04 $140.31
30 $186.05 $210.46
40 $248.07 $280.62
50 $310.09 $350.77
100 $620.18 $701.55
250 $1,550.46 $1,753.86
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 7-4

Figure 7-1 Comparison to Neighboring Sewer Utilities

$200.00
$180.00
$160.00
$140.00
iii $120.00
> :l: $100.00 ....

C
I
0 $80 .00 :;;:
$60.00
$40.00
$20 .00
$0.00
Santa Clara Sunnyvale Santa Clara San Jose View SJWC Milpitas Pa lo Alto Current Proposed Proposed Proposed Proposed Proposed Proposed Proposed ■ WATER RATE 12 HCF $87.96 $78 .48 $95 .64 $118.21 $115.55 $126.62 $117.65 $138.30 ■ SEWER RATE $46.82 $62 .34 $48 .28 $45.49 $53.11 $45.49 $64 .22 $48 .64 ■ COMBINED $134.78 $140.82 $143.92 $163.70 $168.66 $172.11 $181.87 $186.94 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Appendix A – Ten-Ye 7-1

Appendix A – Ten-Year Financial Plan
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Appendix A – Ten-Ye 7-1

Water Utility

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 20 2 6 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 ($) ($) ($) ($) ($) ($) ($) ($) ($) ($)
Revenue
Rate Revenue
1 Revenue from Exi sti ng Rates 53,104,700 53,356,800 53,487,100 53,617,500 53,748,200 53,879,600 54,011,000 54,142,900 54,274,900 54,407,300 2 Increased Revenue Due to Adjustments 4,434,200 9,658,400 15,367,200 20,581,400 26,210,100 31,884,800 37,121,000 41,779,200 46,689,000 49,839,100 3 Subtotal Rate Revenue 57,538,900$ 63,015,200$ 68,854,300$ 74,198,900$ 79,958,300$ 85,764,400$ 91,132,000$ 95,922,100$ 100,963,900$ 104,246,400$ Other Operating Revenue
4 Solar System Maintenance 80,100 80,10 0 80,100 80,100 80,100 80,100 80,100 80,100 80,100 80,100 5 Water System Mai ntenance 1,070,500 1,070 ,500 1,070,500 1,070,500 1,070,500 1,070,500 1,070,500 1,070,500 1,070,500 1,070,500 6 Water Construction 0 0 0 0 0 0 0 0 0 0 7 Water System Operati ons 0 0 0 0 0 0 0 0 0 0 8 A dm inistration De sign 905,400 912,300 919,300 926,400 933,700 941,100 948,700 956,400 964,300 972,300 9 Water Quality 0 0 0 0 0 0 0 0 0 0 10 Water Resources 76,900 76,900 76,900 76,900 76,900 76,900 76,900 76,900 76,900 76,900 11 Subtotal Other Operating Revenue 2,132,900$ 2,139,800$ 2,146,800$ 2,153,900$ 2,161,200$ 2,168,600$ 2,176,200$ 2,183,900$ 2,191,800$ 2,199,800$ 12 Total Revenue 59,671,800$ 65,155,000$ 71,001,100$ 76,352,800$ 82,119,500$ 87,933,000$ 93,308,200$ 98,106,000$ 103,155,700$ 106,446,200$ Revenue Requirements
Operating & Maintenance
13 O&M Expenses 56,212,500 60,992,300 64,627,600 68,777,000 73,639,900 78,822,800 84,464,400 88,866,800 93,529,700 98,194,100 14 Subtotal O&M 56,212,500$ 60,992,300$ 64,627,600$ 68,777,000$ 73,639,900$ 78,822,800$ 84,464,400$ 88,866,800$ 93,529,700$ 98,194,100$ Debt Servi ce
15 Existing Loans/Bonds 0 0 0 0 0 0 0 0 0 0 16 Proposed Loans/Bonds 0 0 0 0 0 0 0 0 0 0 17 Total Debt Servi ce -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Transfers
18 Transfer to Rate Stabilization Fund 0 0 2,250,000 2,250,000 2,250,000 500,000 500,000 500,000 500,000 500,000 19 Transfer to Pensiotn Stabilization Fund 199,400 199,400 199,400 199,400 199,400 199,400 199,400 199,400 199,400 199,400 20 Transfer to Water Construction Fund 0 0 0 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 7,000,000 7,000,000 21 Total Transfers 199,400$ 199,400$ 2,449,400$ 8,449,400$ 8,449,400$ 6,699,400$ 6,699,400$ 6,699,400$ 7,699,400$ 7,699,400$ 22 Total Revenue Requirements 56,411,900$ 61,191,700$ 67,077,000$ 77,226,400$ 82,089,300$ 85,522,200$ 91,163,800$ 95,566,200$ 101,229,100$ 105,893,500$ 23 Net Annual Cash Balance 3,259,900 3,963,300 3,924,100 (873,600) 30,200 2,410,800 2,144,400 2,539,800 1,926,600 552,700 24 Beginning Fund Balance 9,386,600 12,367,600 16,052,000 19,697,200 18,544,700 18,296,000 20,427,900 22,293,400 24,554,300 26,202,000 25 Net Cumulative Fund Balance 12,646,500$ 16,330,900$ 19,976,100$ 18,823,600$ 18,574,900$ 20,706,800$ 22,572,300$ 24,833,200$ 26,480,900$ 26,754,700$ 26 Mi ni mum Operati ng Reserves (90 Days) 13,860,600$ 15,039,200$ 15,935,600$ 16,958,700$ 18,157,800$ 19,435,800$ 20,826,800$ 21,912,400$ 23,062,100$ 24,212,200$ Line No. Description
I _______________ ,
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Appendix A – Ten-Ye 7-2

Recycled Water Utility

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 ($) ($) ($) ($) ($) ($) ($) ($) ($) ($)
Revenue
Rate Revenue
1 Revenue from Exi sti ng Rates 6,533,500 6,610,300 6,676,400 6,743,200 6,810,800 6,879,000 6,947,800 7,017,400 7,087,600 7,158,400 2 Increased Revenue Due to Adjustments 653,400 1,460,800 2,372,100 3,446,900 4,665,100 6,102,800 7,737,200 9,594,300 10,529,300 11,524,100 3 Subtotal Rate Revenue 7,186,900$ 8,071,100$ 9,048,500$ 10,190,100$ 11,475,900$ 12,981,800$ 14,685,000$ 16,611,700$ 17,616,900$ 18,682,500$ Other Operating Revenue
4 System Maintenance 94,700 96,600 98,500 100,500 102,500 104,600 106,700 108,800 111,000 113,200 5 South Bay Water Recycling System Maintena 421,500 438,400 453,900 466,800 479,800 493,100 506,800 520,800 535,400 550,400 6 Subtotal Other Operating Revenue 516,200$ 535,000$ 552,400$ 567,300$ 582,300$ 597,700$ 613,500$ 629,600$ 646,400$ 663,600$ Transfers From
7 RW Capital Fund 0 0 0 0 0 0 0 0 0 0 8 Subtotal Transfers From -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 9 Total Revenue 7,703,100$ 8,606,100$ 9,600,900$ 10,757,400$ 12,058,200$ 13,579,500$ 15,298,500$ 17,241,300$ 18,263,300$ 19,346,100$ Revenue Requirements
Operating & Maintenance
10 O&M Expenses 7,918,500 9,108,100 10,053,000 11,092,200 12,242,600 13,516,900 14,928,700 15,987,600 17,123,000 18,340,400 11 Subtotal O&M 7,918,500 9,108,100 10,053,000 11,092,200 12,242,600 13,516,900 14,928,700 15,987,600 17,123,000 18,340,400 Debt Servi ce
12 Existing Loans/Bonds 0 0 0 0 0 0 0 0 0 0 13 Proposed Loans/Bonds 0 0 0 0 0 0 0 0 0 0 14 Total Debt Servi ce 0 0 0 0 0 0 0 0 0 0 Transfers
15 Transfer to Rate Stabilization Fund 0 0 0 0 100,000 100,000 100,000 100,000 100,000 150,000 16 Transfer to Pensiotn Stabilization Fund 0 0 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 17 Transfer to Recycled Water Const Fund 0 0 0 0 100,000 100,000 100,000 100,000 100,000 100,000 18 Total Transfers 0 0 9,800 9,800 209,800 209,800 209,800 209,800 209,800 259,800 19 Total Revenue Requirements 7,918,500$ 9,108,100$ 10,062,800$ 11,102,000$ 12,452,400$ 13,726,700$ 15,138,500$ 16,197,400$ 17,332,800$ 18,600,200$ 20 Net Annual Cash Balance (215,400) (502,000) (461,900) (344,600) (394,200) (147,200) 160,000 1,043,900 930,500 745,900 21 Beginning Fund Balance 4,980,400 4,765,000 4,263,000 3,801,100 3,456,500 3,062,300 2,915,100 3,075,100 4,119,000 5,049,500 22 Net Cumulative Fund Balance 4,765,000$ 4,263,000$ 3,801,100$ 3,456,500$ 3,062,300$ 2,915,100$ 3,075,100$ 4,119,000$ 5,049,500$ 5,795,400$ 23 Mi ni mum Operati ng Reserves (90 Days) 1,952,500$ 2,245,800$ 2,478,800$ 2,735,100$ 3,018,700$ 3,332,900$ 3,681,000$ 3,942,100$ 4,222,100$ 4,522,300$ Line No. Description
I 1--------------- 1
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Appendix A – Ten-Ye 7-3

Sewer Utility

Fiscal Year Ending June 30,
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 Revenue
Rate Revenue
1 Revenue from Exi sti ng Rates 39,888,000 39,987,300 40,086,800 40,186,800 40,287,600 40,388,000 40,489,400 40,591,000 40,692,800 40,795,200 2 Increased Revenue Due to Adjustments 2,493,000 6,323,000 10,517,000 14,094,400 17,938,900 19,151,100 20,393,000 20,444,000 20,495,300 20,546,900 3 Subtotal Rate Revenue 42,381,000$ 46,310,300$ 50,603,800$ 54,281,200$ 58,226,500$ 59,539,100$ 60,882,400$ 61,035,000$ 61,188,100$ 61,342,100$ Other Operating Revenue
4 System Administration (Interest Income) 622,300 633,800 645,600 657,600 669,800 682,300 695,000 708,000 721,200 734,700 5 System Maintenance 98,300 98,300 98,300 98,300 98,300 98,300 98,300 98,300 98,300 98,300 6 Operations 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 7 SJ SC Wate r Pollution Control Plant 0 0 0 0 0 0 0 0 0 0 8 Storm Pump Maintenance 0 0 0 0 0 0 0 0 0 0 9 Subtotal Other Operating Revenue 1,070,600$ 1,082,100$ 1,093,900$ 1,105,900$ 1,118,100$ 1,130,600$ 1,143,300$ 1,156,300$ 1,169,500$ 1,183,000$ 10 Total Revenue 43,451,600$ 47,392,400$ 51,697,700$ 55,387,100$ 59,344,600$ 60,669,700$ 62,025,700$ 62,191,300$ 62,357,600$ 62,525,100$ Revenue Requirements
Operating & Maintenance
11 O&M Expenses 31,491,500 32,537,500 33,609,300 34,692,000 35,806,900 37,068,400 38,376,000 39,730,900 41,135,300 42,481,900 12 Subtotal O&M 31,491,500$ 32,537,500$ 33,609,300$ 34,692,000$ 35,806,900$ 37,068,400$ 38,376,000$ 39,730,900$ 41,135,300$ 42,481,900$ Debt Servi ce
13 Exis
ting Loans/Bonds 2,842,600 2,842,900 2,843,400 2,842,400 2,844,900 2,845,700 2,844,700 2,846,900 1,904,800 1,908,300 14 Proposed Loans/Bonds 0 0 0 1,314,300 2,253,000 2,253,000 2,253,000 2,253,000 2,253,000 2,253,000 15 Total Debt Servi ce 2,842,600$ 2,842,900$ 2,843,400$ 4,156,700$ 5,097,900$ 5,098,700$ 5,097,700$ 5,099,900$ 4,157,800$ 4,161,300$ Transfers
16 Transfer to Rate Stabilization Fund 250,000 500,000 750,000 750,000 500,000 300,000 300,000 100,000 100,000 0 17 Transfer to Pension Stabilization Fund 78,200 78,200 78,200 78,200 78,200 78,200 78,200 78,200 78,200 78,200 18 Transfer to Sewer Construction Fund 14,000,000 14,000,000 15,000,000 15,000,000 20,000,000 15,000,000 20,000,000 15,000,000 10,000,000 10,000,000 19 Total Transfers 14,328,200$ 14,578,200$ 15,828,200$ 15,828,200$ 20,578,200$ 15,378,200$ 20,378,200$ 15,178,200$ 10,178,200$ 10,078,200$ 20 Total Revenue Requirements 48,662,300$ 49,958,600$ 52,280,900$ 54,676,900$ 61,483,000$ 57,545,300$ 63,851,900$ 60,009,000$ 55,471,300$ 56,721,400$ 21 Net Annual Cash Balance (5,210,700) (2,566,200) (583,200) 710,200 (2,138,400) 3,124,400 (1,826,200) 2,182,300 6,886,300 5,803,700 22 Beginning Fund Balance 17,925,987 12,715,287 10,149,087 9,565,887 10,276,087 8,137,687 11,262,087 9,435,887 11,618,187 18,504,487 23 Net Cumulative Fund Balance 12,715,287$ 10,149,087$ 9,565,887$ 10,276,087$ 8,137,687$ 11,262,087$ 9,435,887$ 11,618,187$ 18,504,487$ 24,308,187$ 24 Mi ni mum Operati ng Reserves (90 Days) 7,765,000 8,022,900 8,287,200 8,554,200 8,829,100 9,140,200 9,462,600 9,796,700 10,143,000 10,475,000 25 Debt Servi ce Coverage (Mi n 1.25) 4.21 5.23 6.36 4.98 4.62 4.63 4.64 4.40 5.10 4.82 Line No. Description
---1 -------------
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-740 Agenda Date: 6/6/2023

REPORT TO COUNCIL

SUBJECT
Public Hearing: Waive Second Reading and Adopt Ordinance No. 2060 to Repeal Chapter 15.45 (Prevention of Flood Damage Code) and Adopt the New Floodplain Management Ordinance Establishing a New Chapter 15.45 (Floodplain Management Regulations) of the Santa Clara City Code. (CEQA: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3), Projects Which Do Not Have the Potential for Causing a Significant Effect on the Environment)

COUNCIL PILLAR
Promote Sustainability and Environmental Protection

BACKGROUND
At the May 9, 2023 Council meeting, proposed Ordinance No. 2060 was passed for the purpose of publication. Pursuant to City Charter Sections 808 and 812 and Government Code Section 50022.3, a summary of proposed Ordinance No. 2060 was published to the Santa Clara Weekly on May 24, 2023, and May 31, 2023, and copies were posted in three public places.

DISCUSSION
Proposed Ordinance No. 2060 would replace the City’s existing floodplain regulations with new regulations recommended by the Federal Emergency Management Authority (FEMA) in order to maintain the City’s “Community Rating System” rating, which affects flood insurance rates. Among other things, the new ordinance will clarify that a one foot freeboard requirement applies to all residential buildings constructed or reconstructed in a special flood hazard area. The ordinance will repeal existing City Code Chapter 15.45 (Prevention of Flood Damage Code) and replace it with a new Chapter 15.45 (Floodplain Management Regulations) to coordinate with the California Building Standards Code; adopt flood hazard maps; and designate a floodplain administrator.

ENVIRONMENTAL REVIEW
The proposed ordinance is exempt from the requirements of the California Environmental Quality Act ("CEQA”) pursuant to CEQA Guidelines section 15061(b)(3) as the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. As the ordinance will strengthen floodplain protections for property within the City limits, there are no reasonably foreseeable adverse impacts from this ordinance and there is no possibility that the activity in question would have a significant effect on the environment.

FISCAL IMPACT
There is no fiscal impact to the City.

COORDINATION
City of Santa Clara Printed on 6/2/2023Page 1 of 2
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23-740 Agenda Date: 6/6/2023
This report has been coordinated with the City Manager's Office, the Community Development Department, and the City Attorney’s Office.

PUBLIC CONTACT
A summary of proposed Ordinance No. 2060 was published to the Santa Clara Weekly on May 24, 2023, and May 31, 2023, and copies were posted in three public places and made available for public inspection at the City Clerk’s Office.

Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the public
information desk at any City of Santa Clara public library.

RECOMMENDATION

1. Approve the Use of CEQA Exemption Pursuant to CEQA Guidelines Section 15061(b)(3), Projects Which Do Not Have the Potential for Causing a Significant Effect on the Environment

2. Waive Second Reading and Adopt Ordinance No. 2060 to Repeal Chapter 15.45 (Prevention of Flood Damage Code) and Adopt the New Floodplain Management Ordinance Establishing a New Chapter 15.45 (Floodplain Management Regulations) of the Santa Clara City Code.

Reviewed by: Andrew Crabtree, Director of Community Development Department Approved by: Jōvan D. Grogan, City Manager

ATTACHMENTS

1. May 9, 2023 Report to Council

2. Ordinance No. 2060 (Intro)
City of Santa Clara Printed on 6/2/2023Page 2 of 2
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-138 Agenda Date: 5/9/2023

REPORT TO COUNCIL

SUBJECT
Waive First Reading and take Action on the Introduction of an Ordinance to Repeal Chapter 15.45 (Prevention of Flood Damage Code) and Adopt the New Floodplain Management Ordinance Establishing a New Chapter

15.45 (Floodplain Management Regulations) of the Santa Clara City Code. (CEQA: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3), Projects Which Do Not Have the Potential for Causing a Significant Effect on the Environment)

COUNCIL PILLAR
Promote Sustainability and Environmental Protection

BACKGROUND
In 1999, the City of Santa Clara (City) joined the National Flood Insurance Program (NFIP) administered under the Federal Emergency Management Agency (FEMA). The NFIP is implemented through affiliated insurance companies that provide flood insurance to property owners, renters and businesses. Participation in the NFIP requires local communities to adopt and enforce floodplain management regulations that help mitigate flooding effects. Participation in the NFIP allows Santa Clara property owners to purchase flood insurance at set rates, including those with properties within areas designated as Special Flood Hazard Areas (SFHAs). The SFHA designation is given to land areas that have the highest probability of flooding in any given year and for which the Floodplain Management provisions apply.

The City voluntarily participates in the Community Rating System (CRS) program of the NFIP. The CRS allows Santa Clara residents and businesses to earn flood insurance premium discounts by having the City promote flood-risk reduction practices, provide floodplain management, and encourage the purchase of flood insurance. These activities go above and beyond the normal enforcement of floodplain regulations. The City has maintained a CRS Class 7 rating (on a scale of 1 to 10, where a lower number is a more desirable rating), allowing property owners in SFHA to receive a 15% discount on flood insurance premiums for all new or renewed flood insurance policies.

Every five years, communities have a “cycle visit” by FEMA staff to confirm/determine their CRS rating.

Communities have until their next scheduled cycle visit to update floodplain management ordinances to remain at their current CRS ratings. The City’s next cycle visit is scheduled for November 2023.

DISCUSSION
In advance of the upcoming cycle visit, FEMA reviewed the City’s current ordinances and communicated their finding to the City that to maintain the City’s CRS rating of Class 7, the City’s floodplain ordinance should be updated to incorporate specific language provided in the CRS guidelines related to FEMA floodplain requirements.

The CRS guidelines were updated in January 2021 to add the prerequisite requirement for Class 8 or better for communities to adopt a floodplain management ordinance enforcing a minimum one-foot freeboard for all residential buildings constructed, substantially improved or reconstructed in SFHA, due to the likelihood of substantial safety risk and damage. This freeboard requirement means the finished floor of a building must be constructed one-foot above the base-flood elevation, providing an additional measure of safety to those City of Santa Clara Printed on 5/5/2023Page 1 of 3
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23-138 Agenda Date: 5/9/2023
residing in the buildings and lowering risk of property damage. This freeboard standard exceeds the minimum NFIP requirements for insurance purposes and thus allows for a rating of Class 8 or better.

It should be noted that the most substantive part of the FEMA floodplain requirements, the one-foot freeboard requirement, has already been incorporated into the City’s ordinances. Every three years, the City adopts the most recent cycle of the California Building Standards Code (CBSC) (CCR Title 24; inclusive of the California Building Code and California Residential Code). On November 2, 2022, the City adopted the most recent version of the CBSC. This version includes the one-foot freeboard requirement for both residential and commercial buildings. However, there are some discrepancies between the language used in the CBSC and the language used in the FEMA requirements. Other provisions included within the CRS guidelines primarily address the City’s enforcement process.

As the City has adopted the CBSC, which also regulates new construction within floodplains, the City is addressing two sets of standards with potential differences in wording and in minor details, but which generally are intended to achieve the same outcome. The California Department of Water Resources (DWR) prepared a FEMA CRS Model Floodplain Management Ordinance (“Model Ordinance”) to resolve the potential issue of different wording between the FEMA CRS guidelines and the CBSC.

Adoption of the recommended Floodplain Management Ordinance (Attachment 1) will replace Chapter 15.45 (Prevention of Flood Damage Code), with similar standards that are based on the Model Ordinance and thus both align with the CBSC and the FEMA CRS guidelines. Using the Model Ordinance as the guide for the City’s Floodplain Management Ordinance provides the following benefits:
• Meets the CRS requirements for the City to maintain a Class 7 rating; • Clearly indicates that the Building Code sets the finished floor elevation of the building at the base- flood elevation plus 1’ freeboard;
• Grants authority to the Floodplain Administrator to review development in the Special Flood Hazard Areas, issue permits, implement NFIP requirements, and enforce provisions of the City Code; • Satisfies the NFIP;
• Eases the City’s burden to draft new ordinance language on its own by comprehensively and inclusively addressing all requirements and guidelines with the benefit of already having approval from FEMA;
• Allows for specific language appropriate for the City; and • Furthers the flood resiliency of the City and provides for the minimum standards necessary for the City’s purpose in the implementation of floodplain management.

Adoption of the proposed Ordinance will also implement several General Plan goals and policies, including:

Goal 5.10.5
‐
G4 City codes and regulations that are consistent with applicable regional, State and federal regulations for safety.

Policy 5.10.5
‐
P12 Continue to participate in the National Flood Insurance Program and encourage all property owners within flood hazard areas to carry flood insurance.

For these reasons staff recommends that the City Council move forward with adoption of the proposed Amendment to Chapter 15.45 of the City Code.

ENVIRONMENTAL REVIEW
The proposed ordinance is exempt from the requirements of the California Environmental Quality Act ("CEQA”) pursuant to CEQA Guidelines section 15061(b)(3) as the activity is covered by the general rule that City of Santa Clara Printed on 5/5/2023Page 2 of 3
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23-138 Agenda Date: 5/9/2023
CEQA applies only to projects which have the potential for causing a significant effect on the environment.

Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. As the ordinance will strengthen floodplain protections for property within the City limits, there are no reasonably foreseeable adverse impacts from this ordinance and there is no possibility that the activity in question would have a significant effect on the environment.

FISCAL IMPACT
There is no fiscal impact to the City.

COORDINATION
This report has been coordinated with the City Manager's Office, the Community Development Department, City Attorney’s Office and FEMA.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]>
or at the public information desk at any City of
Santa Clara public library.

ALTERNATIVES

1. Repeal Chapter 15.45 (Prevention of Flood Damage Code) and adopt the new Floodplain Management Ordinance establishing a new Chapter 15.45 (Floodplain Management Regulations)

2. Provide alternative direction.

RECOMMENDATION
Alternative 1: Repeal Chapter 15.45 (Prevention of Flood Damage Code) and adopt the new Floodplain Management Ordinance establishing a new Chapter 15.45 (Floodplain Management Regulations).

Reviewed by: Andrew Crabtree, Director, Community Development Department Approved by:

Jōvan D. Grogan, City Manager

ATTACHMENTS

1. Floodplain Management Ordinance (Chapter 15.45 Floodplain Management Regulations) City of Santa Clara Printed on 5/5/2023Page 3 of 3
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ORDINANCE NO. 2060

AN ORDINANCE OF THE CITY OF SANTA CLARA,
CALIFORNIA, TO AMEND TITLE 15 (BUILDINGS AND
CONSTRUCTION) OF THE "CODE OF THE CITY OF
SANTA CLARA, CALIFORNIA" BY REPEALING CHAPTER

15.45 (PREVENTION OF FLOOD DAMAGE CODE) AND
ADOPTING A NEW CHAPTER 15.45 (FLOODPLAIN

MANAGEMENT REGULATIONS) TO COORDINATE WITH
THE CALIFORNIA BUILDING STANDARDS CODE; TO
ADOPT FLOOD HAZARD MAPS; TO DESIGNATE A
FLOODPLAIN ADMINISTRATOR; AND FOR OTHER

PURPOSES
BE IT ORDAINED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, the Legislature of the State of California has, in Government Code Sections 65302, 65560, and 65800; and Sections 17922, 17958, 17958.5 and 17958.7 of the California Health and Safety Code, conferred upon local governments the authority to adopt regulations designed to promote the public health, safety, and general welfare of its citizenry;
WHEREAS, the Federal Emergency Management Agency has identified special flood hazard areas within the boundaries of the City of Santa Clara and such areas may be subject to periodic inundation which may result in loss of life and property, health and safety hazards, disruption of commerce and governmental services, extraordinary public expenditures for flood protection and relief, and impairment of the tax base, all of which adversely affect the public health, safety and general welfare; WHEREAS, the City of Santa Clara, California was accepted for participation in the National Flood Insurance Program on July 16, 1980 and the City Council desires to continue to meet the requirements of Title 44 Code of Federal Regulations, Sections 59 and 60, necessary for such participation;
Ordinance\Floodplain Management Ordinance Page 1 of 25
WHEREAS, pursuant to the California Health and Safety Code, Division 13, Part 1.5 and Part 2.5, the City of Santa Clara is required to administer and enforce the California Building Standards Code, and such building codes contain certain provisions that apply to the design and construction of buildings and structures in flood hazard areas; and WHEREAS, the City Council has determined that it is in the public interest to adopt the proposed floodplain management regulations that are coordinated with the California Building Standards Code.

NOW, THEREFORE, BE IT FURTHER ORDAINED BY THE CITY OF SANTA CLARA AS FOLLOWS:

SECTION 1: RECITALS. The foregoing whereas clauses are incorporated herein by reference and made a part hereof.

SECTION 2: Chapter 15.45 (Prevention of Flood Damage Code) of Title 15 (Buildings and Construction) of "The Code of the City of Santa Clara, California" is hereby repealed in its entirety and replaced with the following:
"Chapter 15.45

FLOODPLAIN MANAGEMENT REGULATIONS
ARTICLE I. Scope and Administration

15.45.010 Title. These regulations, in combination with the flood provisions of California Code of Regulations Title 24, the California Building Standards Code (hereinafter "building codes," consisting of the Part 2 (building) and Part 2 Appendix G (hereinafter "Appendix G"), Part 2.5 (residential), and Part 10 (existing building), shall be known as the Floodplain Management Regulations of the City of Santa Clara (hereinafter "these regulations").

Ordinance\Floodplain Management Ordinance Page 2 of 25

15.45.020 Statutory authority. Legislature of the State of California has, in Government Code Sections 65302, 65560, and 65800; and Sections 17922, 17958, 17958.5 and 17958. 7 of the California Health and Safety Code, conferred upon local governments the authority to adopt regulations designed to promote the public health, safety, and general welfare of its citizenry.

15.45.030 Scope. These regulations, in combination with the flood provisions of the building codes shall apply to all proposed development in flood hazard areas established in Section 15.45.120 of these regulations.

15.45.040 Purposes and objectives. The purposes and objectives of these regulations and the flood load and flood resistant construction requirements of the building codes are to promote the public health, safety and general welfare and to minimize public and private losses due to flood conditions in specific flood hazard areas through the establishment of comprehensive regulations for management of flood hazard areas, designed to:
(a) Prevent unnecessary disruption of commerce, access and public service during times of flooding.
(b) Manage the alteration of natural floodplains, stream channels and shorelines.
(c) Manage filling, grading, dredging and other development which may increase flood damage or erosion potential.
(d) Prevent or regulate the construction of flood barriers which will divert floodwater or increase flood hazards.
(e) Contribute to improved construction techniques in the floodplain.

Ordinance\Floodplain Management Ordinance Page 3 of 25
(f) Minimize damage to public and private facilities and utilities. (g) Help maintain a stable tax base by providing for the sound use and development of flood hazard areas.
(h) Minimize the need for rescue and relief efforts associated with flooding. (i) Ensure that property owners, occupants, and potential owners are aware of property located in flood hazard areas.

U) Minimize the need for future expenditure of public funds for flood control projects and response to and recovery from flood events. (k) Meet the requirements of the National Flood Insurance Program for community participation set forth in Title 44 Code of Federal Regulations, Section 59.22.

15.45.050 Coordination with Building Codes. Pursuant to the requirement established in State statute that the City of Santa Clara administer and enforce the State building codes, the City Council of the City of Santa Clara does hereby acknowledge that the building codes contain certain provisions that apply to the design and construction of buildings and structures in flood hazard areas. Therefore, these regulations are intended to be administered and enforced in conjunction with the building codes.

15.45.060 Adoption of CCR Title 24 Part 2 Appendix G. CCR Title 24 Part 2 Appendix G Flood-Resistant Construction is hereby adopted and made a part of the California Building Standards Code and shall apply in flood hazard areas.

15.45.070 Warning. The degree of flood protection required by these regulations and the building codes is considered reasonable for regulatory purposes and is based on scientific and engineering considerations. Larger floods can and will occur. Flood heights may be increased by man-made or natural causes. Enforcement of these regulations and Ordinance\Floodplain Management Ordinance Page 4 of 25
the building codes does not imply that land outside the special flood hazard areas, or that uses permitted within such flood hazard areas, will be free from flooding or flood damage.

The flood hazard areas and base flood elevations contained in the Flood Insurance Study and shown on Flood Insurance Rate Maps and the requirements of Title 44 Code of Federal Regulations, Sections 59 and 60 may be revised by the Federal Emergency Management Agency, requiring this community to revise these regulations to remain eligible for participation in the National Flood Insurance Program. No guaranty of vested use, existing use, or future use is implied or expressed by compliance with these regulations.

15.45.080 Disclaimer of liability. These regulations shall not create liability on the part of the City Council of the City of Santa Clara, any officer or employee thereof, the State of California, or the Federal Emergency Management Agency, for any flood damage that results from reliance on these regulations or any administrative decision lawfully made hereunder. The Floodplain Administrator and any employee charged with the enforcement of these regulations, while acting for the community in good faith and without malice in the discharge of the duties required by these regulations or other pertinent law or ordinance, shall not thereby be rendered liable personally and is hereby relieved from personal liability for any damage accruing to persons or property as a result of any act or by reason of an act or omission in the discharge of official duties. Any suit instituted against an officer or employee because of an act performed by that officer or employee in the lawful discharge of duties and under the provisions of these regulations shall be defended by a legal representative of the community until the final termination of the proceedings. The Floodplain Administrator and any subordinate shall not be liable for cost Ordinance\Floodplain Management Ordinance Page 5 of 25
in any action, suit or proceeding that is instituted in pursuance of the provisions of these regulations.

15.45.090 Other laws. The provisions of these regulations shall not be deemed to nullify any provisions of local, State or federal law.

15.45.100 Abrogation and greater restrictions. These regulations supersede any ordinance in effect in flood hazard areas. However, these regulations are not intended to repeal or abrogate any existing ordinances including land development regulations, subdivision regulations, zoning ordinances, stormwater management regulations, or building codes. In the event of a conflict between these regulations and any other ordinance, code, or regulation, the more restrictive shall govern.

ARTICLE II. Applicability

15.45.110 General applicability. These regulations, in conjunction with the building codes, provide minimum requirements for development located in flood hazard areas, including the subdivision of land and other developments; site improvements and installation of utilities; placement and replacement of manufactured homes; placement of recreational vehicles; new construction and alterations, repair, reconstruction, rehabilitation or additions of existing buildings and structures; substantial improvement of existing buildings and structures, including repair of substantial damage; installation of tanks; temporary structures and temporary or permanent storage; utility and miscellaneous Group U buildings and structures; and certain building work exempt from permit under the building codes; and other buildings and development activities.

15.45.120 Establishment of Flood Hazard Areas. The Flood Insurance Study for Santa Clara County, California and Incorporated Areas dated July 16, 1980, and all Ordinance\Floodplain Management Ordinance Page 6 of 25
subsequent amendments and revisions, and the accompanying Flood Insurance Rate Maps (FIRM), and all subsequent amendments and revisions to such maps, are hereby adopted by reference as a part of these regulations and serve as the basis for establishing flood hazard areas. Where the building code establishes flood hazard areas, such areas are established by this section. Additional maps and studies, when specifically adopted, supplement the FIS and FIRMs to establish additional flood hazard areas. Maps and studies that establish flood hazard areas are on file at the Department of Public Works, 1500 Warburton Avenue, Santa Clara, California 95050.

15.45.130 Interpretation. In the interpretation and application of these regulations, all provisions shall be:
(a) Considered as minimum requirements.
(b) Liberally construed in favor of the governing body. (c) Deemed neither to limit nor repeal any other powers granted under state statutes.

ARTICLE Ill. Duties and Powers of the Floodplain Administrator

15.45.140 Designation. The Community Development Director is designated the Floodplain Administrator. The Floodplain Administrator shall have the authority to delegate performance of certain duties to other employees. Where Appendix G refers to the Building Official, each such reference shall refer to the Floodplain Administrator. The Floodplain Administrator is authorized and directed to administer and enforce the provisions of Appendix G.

15.45.150 General authority. The Floodplain Administrator is authorized and directed to administer the provisions of these regulations. The Floodplain Administrator shall have Ordinance\Floodplain Management Ordinance Page 7 of 25
the authority to render interpretations of these regulations consistent with the intent and purpose of these regulations and to establish policies and procedures in order to clarify the application of its provisions. Such interpretations, policies and procedures shall be consistent with the intent and purpose of these regulations and the flood provisions of the building code and shall not have the effect of waiving specific requirements without the granting of a variance pursuant to Appendix G.

15.45.160 Coordination. The Floodplain Administrator shall coordinate with and provide comments to the Building Official to administer and enforce the flood provisions of the building code and to ensure compliance with the applicable provisions of these regulations. The Floodplain Administrator and the Building Official have the authority to establish written procedures for reviewing applications and conducting inspections for buildings and for administering and documenting determinations of substantial improvement and substantial damage made pursuant to Section 15.45.190 of these regulations.

15.45.170 Duties. The duties of the Floodplain Administrator shall include but are not limited to:
(a) Review all permit applications to determine whether proposed development is located in flood hazard areas established in Section 15.45.120 of these regulations. (b) Require development in flood hazard areas to be reasonably safe from flooding and to be designed and constructed with methods, practices and materials that minimize flood damage.
(c) Interpret flood hazard area boundaries, provide available flood elevation and flood hazard information.

Ordinance\Floodplain Management Ordinance Page 8 of 25
(d) Determine whether additional flood hazard data shall be obtained or developed.
(e) Review all applications and plans for development in flood hazard areas for compliance with these regulations.
(f) Complete the appropriate section of the Department of Housing and Community Development Floodplain Ordinance Compliance Certification for Manufactured Home/Mobilehome Installations when submitted by applicants. (g) Review, in conjunction with the Building Official, required certifications and documentation specified by these regulations and the building code to determine that such certifications and documentations are complete.
(h) Establish, in coordination with the Building Official, written procedures for administering and documenting determinations of substantial improvement and substantial damage made pursuant to Section 15.45.190 of these regulations. (i) Coordinate with the Building Official and others to identify and investigate damaged buildings located in flood hazard areas and inform owners of the requirement to obtain permits for repairs.

U) Review requests submitted to the Building Official seeking approval to modify the strict application of the flood load and flood resistant construction requirements of the building code, to determine whether such requests require consideration as a variance pursuant to Appendix G.
(k) Require applicants who submit hydrologic and hydraulic engineering analyses to support permit applications to submit to FEMA the data and information necessary to maintain the Flood Insurance Rate Maps when the analyses propose to Ordinance\Floodplain Management Ordinance Page 9 of 25
change base flood elevations, flood hazard area boundaries, or floodway designations; such submissions shall be made within 6 months of such data becoming available. (I) Require applicants who propose alteration of a watercourse to notify adjacent jurisdictions and the NFIP State Coordinating Agency, and to submit copies of such notifications to the Federal Emergency Management Agency (FEMA). (m) Inspect development within the scope of Appendix G and inspect flood hazard areas to determine if development is undertaken without issuance of permits. (n) Prepare comments and recommendations for consideration when applicants seek variances in accordance with Appendix G. ( o) Cite violations.
(p) Notify the Federal Emergency Management Agency when the corporate boundaries of City of Santa Clara have been modified.

15.45.180 Other permits required. The applicant shall obtain all other required state and federal permits prior to initiating work authorized by these regulations and shall provide documentation of such permits to the Floodplain Administrator. Such permits include but are not limited to:
(a) Reserved.
(b) California State Water Resources Control Board for activities that affect wetlands and alter surface water flows, in conjunction with the U.S. Army Corps of Engineers; Section 404 of the Clean Water Act.

15.45.190 Substantial improvement and substantial damage determinations. For applications for building permits to improve buildings and structures, including alterations, movement, repair, additions, rehabilitations, renovations, substantial improvements, Ordinance\Floodplain Management Ordinance Page 10 of 25 repairs of substantial damage, and any other improvement of or work on such buildings and structures, the Floodplain Administrator, in coordination with the Building Official, shall:
(a) Estimate the market value, or require the applicant to obtain a professional appraisal prepared by a qualified independent appraiser, of the market value of the building or structure before the start of construction of the proposed work; in the case of repair, the market value of the building or structure shall be the market value before the damage occurred and before any repairs are made.
(b) Compare the cost to perform the improvement, the cost to repair the damaged building to its pre-damaged condition, or the combined costs of improvements and repairs, where applicable, to the market value of the building or structure. (c) Determine and document whether the proposed work constitutes substantial improvement or repair of substantial damage. (d) Notify the applicant when it is determined that the work constitutes substantial improvement or repair of substantial damage and that compliance with the flood resistant construction requirements of the building code is required and notify the applicant when it is determined that work does not constitute substantial improvement or repair of substantial damage.

15.45.200 Department records. In addition to the requirements of the building code and Appendix G, and regardless of any limitation on the period required for retention of public records, the Floodplain Administrator shall maintain and permanently keep and make available for public inspection all records that are necessary for the administration of these regulations and the flood provisions of the building codes, including Flood Ordinance\Floodplain Management Ordinance Page 11 of 25 Insurance Studies, Flood Insurance Rate Maps; documents from FEMA that amend or revise FIRMs; records of issuance of permits and denial of permits; determinations of whether proposed work constitutes substantial improvement or repair of substantial damage; required certifications and documentation specified by the building codes and these regulations; notifications to adjacent communities, FEMA, and the State related to alterations of watercourses; assurance that the flood carrying capacity of altered waterways will be maintained; documentation related to variances, including justification for issuance or denial; and records of enforcement actions taken pursuant to these regulations and the flood resistant provisions of the building codes.

ARTICLE IV. Site Plans and Documentation

15.45.210 Additional site plan information. In addition to the site plan requirements of the building code and Appendix G, site plans shall include, as applicable to the proposed development:
(a) Location of the proposed activity and proposed structures; locations of water supply, sanitary sewer, and other utilities; and locations of existing buildings and structures.
(b) Location, extent, amount, and proposed final grades of any filling, grading, or excavation.
(c) Where the placement of fill is proposed, the amount, type, and source of fill material; compaction specifications; a description of the intended purpose of the fill areas; and evidence that the proposed fill areas are the minimum necessary to achieve the intended purpose.
( d) Reserved.

Ordinance\Floodplain Management Ordinance Page 12 of 25 (e) Existing and proposed alignment of any proposed alteration of a watercourse.

15.45.220 Additional engineering data. When additional hydrologic, hydraulic or other engineering data, studies, and additional data and analyses are submitted to support an application, the applicant has the right to seek a Letter of Map Change from FEMA to change the base flood elevations, change floodway boundaries, or change boundaries of flood hazard areas shown on FIRMs, and to submit such data to FEMA for such purposes. The analyses shall be prepared by a qualified registered professional engineer in a format required by FEMA. Submittal requirements and processing fees shall be the responsibility of the applicant. Provided FEMA issues a Conditional Letter of Map Revision, construction of proposed flood control projects and land preparation for development are permitted, including clearing, excavation, grading, and filling. Permits for construction of buildings shall not be issued until the applicant satisfies the FEMA requirements for issuance of a Letter of Map Revision.

ARTICLE V. Variances

15.45.230 Variances, in addition. In addition to the variance provisions of Appendix G:
(a) The considerations and conditions for variances set forth in Appendix Gare based on the general principle of zoning law that variances pertain to a piece of property and are not personal in nature. A variance may be issued for a parcel of property with physical characteristics so unusual that complying with the requirements of these regulations would create an exceptional hardship to the applicant or the surrounding property owners. The characteristics must be unique to the property and not be shared Ordinance\Floodplain Management Ordinance Page 13 of 25 by adjacent parcels. The unique characteristic must pertain to the land itself, not to the structure, its inhabitants, or the property owners. The issuance of a variance is for floodplain management purposes only. Federal flood insurance premium rates are determined by the National Flood Insurance Program according to actuarial risk and will not be modified by the granting of a variance.
(b) It is the duty of the City Council of the City of Santa Clara to promote public health, safety and welfare and minimize losses from flooding. This duty is so compelling and the implications of property damage and the cost of ensuring a structure built below flood level are so serious that variances from the elevation or other requirements in the building codes should be quite rare. The long-term goal of preventing and reducing flood loss and damage, and minimizing recovery costs, inconvenience, danger, and suffering, can only be met when variances are strictly limited. Therefore, the variance requirements in these regulations are detailed and contain multiple provisions that must be met before a variance can be properly issued. The criteria are designed to screen out those situations in which alternatives other than a variance are more appropriate.

15.45.240 Reserved.

ARTICLE VI. Violations

15.45.250 Violations, general. In addition to the violation provisions of the building code and Appendix G, any development in any flood hazard area that is being performed without an issued permit or that is in conflict with an issued permit shall be deemed a violation.

15.45.260 Buildings and structures. A building or structure without the documentation of the elevation of the lowest floor, other required design certifications, or Ordinance\Floodplain Management Ordinance Page 14 of 25 other evidence of compliance required by these regulations or the building code, is presumed to be a violation until such time as required documentation is submitted.

Violation of the requirements shall constitute a misdemeanor.

15.45.270 Authority. The Floodplain Administrator is authorized to serve notices of violation or stop work orders to owners of property involved, to the owner's agent, or to the person or persons doing the work for development that is not within the scope of the building codes, but is regulated by these regulations and that is determined to be a violation.

15.45.280 Unlawful continuance. Any person who shall continue any work after having been served with a notice of violation or a stop work order, except such work as that person is directed to perform to remove or remedy a violation or unsafe condition, shall be subject to penalties as prescribed by law.

ARTICLE VII. Definitions

15.45.290 General. The following words and terms shall, for the purposes of these regulations, have the meanings shown herein. Other terms are defined in the Building Code and Appendix G and terms are defined where used in the Residential Code (rather than in the definitions section). Where terms are not defined, such terms shall have ordinarily accepted meanings such as the context implies.

15.45.300 Definitions
(a) "Accessory Structure". A structure on the same parcel of property as a principal structure and the use of which is incidental to the use of the principal structure.

For floodplain management purposes, the term includes only accessory structures used for parking and storage.

Ordinance\Floodplain Management Ordinance Page 15 of 25 (b) "Agricultural Structure." A walled and roofed structure used exclusively for agricultural purposes or uses in connection with the production, harvesting, storage, raising, or drying of agricultural commodities and livestock, including aquatic organisms.

Structures that house tools or equipment used in connection with these purposes or uses are also considered to have agricultural purposes or uses. (c) "Alteration of a Watercourse." A dam, impoundment, channel relocation, change in channel alignment, channelization, or change in cross-sectional area of the channel or the channel capacity, or any other form of modification which may alter, impede, retard or change the direction and/or velocity of the riverine flow of water during conditions of the base flood.
(d) "Development." Any manmade change to improved or unimproved real estate, including but not limited to, buildings or other structures, tanks, temporary structures, temporary or permanent storage of materials, mining, dredging, filling, grading, paving, excavations, drilling operations and other land-disturbing activities. (e) "Encroachment." The placement of fill, excavation, buildings, permanent structures or other development into a flood hazard area which may impede or alter the flow capacity of riverine flood hazard areas.
(f) "Exceptional Hardship." For the purpose of variances from these regulations or the building code, the exceptional difficulty that would result from a failure to grant a requested variance. Mere economic or financial hardship is not exceptional.

Inconvenience, aesthetic considerations, physical handicaps, personal preferences, or the disapproval of one's neighbors do not, as a rule, qualify as exceptional hardships. All of these circumstances can be resolved through other means without granting variances, Ordinance\Floodplain Management Ordinance Page 16 of 25 even when the alternatives are more expensive or require the property owner to build elsewhere or put the parcel to a different use than originally intended. (g) "Existing Manufactured Home Park or Subdivision." A manufactured home park or subdivision for which the construction of facilities for servicing the lots on which the manufactured homes are to be affixed (including, at a minimum, the installation of utilities, the construction of streets, and either final site grading or the pouring of concrete pads) was completed before May 13, 1980.
(h) "Expansion to an Existing Manufactured Home Park or Subdivision." The preparation of additional sites by the construction of facilities for servicing the lots on which the manufactured homes are to be affixed (including the installation of utilities, the construction of streets, and either final site grading or the pouring of concrete pads). (i) "Flood Control Project." A dam or barrier design and constructed to keep water away from or out of a specified area, including but not limited to levees, floodwalls, and channelization.

U) "Fraud or Victimization." For the purpose of variances from these regulations or the building code, the intentional use of deceit to deprive another of rights or property, making a victim of the deprived person or the public. As it pertains to buildings granted variances to be constructed below the elevation required by the building code, future owners or tenants of such buildings and the community as a whole may bear the burden of increased risk of damage from floods, increased cost of flood insurance, and increased recovery costs, inconvenience, danger, and suffering.

Ordinance\Floodplain Management Ordinance Page 17 of 25 (k) "Letter of Map Change (LOMG)". An official determination issued by FEMA that amends or revises an effective Flood Insurance Rate Map or Flood Insurance Study.

Letters of Map Change include:
(1) "Letter of Map Amendment (LOMA)": An amendment based on technical data showing that a property was incorrectly included in a designated special flood hazard area. A LOMA amends the current effective Flood Insurance Rate Map and establishes that a specific property, portion of a property, or structure is not located in a special flood hazard area.
(2) "Letter of Map Revision (LOMR)": A revision based on technical data that may show changes to flood zones, flood elevations, special flood hazard area boundaries and floodway delineations, and other planimetric features. (3) "Letter of Map Revision Based on Fill (LOMR-F)": A determination that a structure or parcel of land has been elevated by fill above the base flood elevation and is, therefore, no longer located within the special flood hazard area. In order to qualify for this determination, the fill must have been permitted and placed in accordance with the community's floodplain management regulations.
(4) "Conditional Letter of Map Revision (CLOMR)": A formal review and comment as to whether a proposed flood protection project or other project complies with the minimum NFIP requirements for such projects with respect to delineation of special flood hazard areas. A CLO MR does not revise the effective Flood Insurance Rate Map or Flood Insurance Study; upon submission and approval of certified as-built documentation, a Letter of Map Revision may be issued by FEMA to revise the effective FIRM.

Ordinance\Floodplain Management Ordinance Page 18 of 25 (I) "Light-Duty Truck." As defined in 40 C.F.R. 86.082-2, any motor vehicle rated at 8,500 pounds Gross Vehicular Weight Rating or less which has a vehicular curb weight of 6,000 pounds or less and which has a basic vehicle frontal area of forty-five (45) square feet or less, which is:
(1) Designed primarily for purposes of transportation of property or is a derivation of such a vehicle, or
(2) Designed primarily for transportation of persons and has a capacity of more than twelve (12) persons; or
(3) Available with special features enabling off-street or off-highway operation and use.
(m) "Market Value." The price at which a property will change hands between a willing buyer and a willing seller, neither party being under compulsion to buy or sell and both having reasonable knowledge of relevant facts. As used in these regulations, the term refers to the market value of buildings and structures, excluding the land and other improvements on the parcel. Market value shall be determined by one of the following methods:
(1) Actual Cash Value (replacement cost depreciated for age and quality of construction),
(2) Tax assessment value adjusted to approximate market value by a factor provided by the Property Appraiser, or
(3) Established by a qualified independent appraiser.
(n) "New Manufactured Home Park or Subdivision." A manufactured home park or subdivision for which the construction of facilities for servicing the lots on which the Ordinance\Floodplain Management Ordinance Page 19 of 25 manufactured homes are to be affixed (including at a minimum, the installation of utilities, the construction of streets, and either final site grading or the pouring of concrete pads) was completed on or after May 13, 1980.
(o) "Nuisance." That which is injurious to safety or health of an entire community or neighborhood, or any considerable number of persons, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin.
(p) "Riverine." Relating to, formed by, or resembling a river (including tributaries), stream, brook, etc.
(q) "Sand Dunes." Naturally occurring accumulations of sand in ridges or mounds landward of the beach.
(r) "Watercourse." A river, creek, stream, channel or other topographic feature in, on, through, or over which water flows at least periodically.

ARTICLE VIII. Subdivisions

15.45.310 Subdivisions, in addition. In addition to the subdivision provisions in Appendix G, the following requirements apply:
(a) In Zones AH and AO, adequate drainage paths shall be provided to guide floodwater around and away from proposed structures.
(b) When fill will be placed to support buildings, the fill shall be placed in accordance with the building code and approval of the subdivision shall require submission of as-built elevations for each filled pad certified by a licensed land surveyor or registered civil engineer.

Ordinance\Floodplain Management Ordinance Page 20 of 25 ARTICLE IX. Site Improvement

15.45.320 Site improvement, in addition. In addition to the site improvement provisions in Appendix G, the requirements of this section shall apply.

15.45.330 Limitations on placement of fill. Where the placement of fill is permitted by the building code, Appendix G, or these regulations, fill shall be designed to be stable under conditions of flooding including rapid rise and rapid drawdown of floodwaters, prolonged inundation, and protection against flood-related erosion and scour. In addition to these requirements, when intended to support buildings and structures, fill shall comply with the requirements of the building code. The placement of fill intended to change base flood elevations, change floodway boundaries, or change boundaries of flood hazard areas shown on FIRMs shall be subject to the requirements of Section 15.45.220 of these regulations.

15.45.340 Reserved.

15.45.350 Reserved.

ARTICLE X. Manufactured Homes

15.45.360 Installation, in addition. In addition to the provisions for manufactured homes in Appendix G:
(a) All manufactured homes installed in flood hazard areas shall be installed by an installer that is licensed pursuant to the Business and Professions Code and shall comply with the requirements of the Department of Housing and Community Development (HCD) and the requirements of these regulations.

Ordinance\Floodplain Management Ordinance Page 21 of 25 (b) In addition to permits pursuant to Appendix G, permits from the HCD are required where the HCD is the enforcement agency for installation of manufactured homes.
(c) Upon completion of installation and prior to the final inspection by the Floodplain Administrator, the installer shall submit certification of the elevation of the manufactured home, prepared by a licensed land surveyor or registered civil engineer, to the Floodplain Administrator.

15.45.370 Reserved.

ARTICLE XI. Accessory Structures

15.45.380 Detached garages and accessory storage structures. The provision in Appendix G for garages and accessory structures shall be replaced with this section.

Detached garages and accessory storage structures used only for parking or storage are permitted below the base flood elevation provided the garages and accessory storage structures:
(a) Are one story and not larger than 600 square feet in area when located in special flood hazard areas other than coastal high hazard areas. (b) Reserved.
(c) Are anchored to resist flotation, collapse or lateral movement resulting from flood loads.
(d) Have flood openings in accordance with the building code. ( e) Have flood damage-resistant materials used below the base flood elevation. (f) Have mechanical, plumbing and electrical systems, including plumbing fixtures, elevated to or above the base flood elevation.

Ordinance\Floodplain Management Ordinance Page 22 of 25 ARTICLE XII. Flood Control Projects

15.45.390 Flood control projects; general. In addition to applicable Federal, State and other local permits, a permit for floodplain development is required for construction of flood control projects. The purpose for the permit is to examine the impact on flood hazard areas, floodways, and base flood elevations shown on the FIRM. Unless otherwise authorized by separate regulations, issuance of this permit does not address the sufficiency of the structural elements of the proposed flood control project. Permits for floodplain development and building permits in areas affected by proposed flood control projects shall not be issued based on Conditional Letters of Map Revision issued by FEMA.

15.45.400 Flood control projects; applications. Applications for permits for flood control projects shall include documentation including but not limited to:
(a) Site plan or document showing the existing topography and the boundaries of the flood hazard areas, floodway boundaries, and base flood elevations shown on the FIRM.
(b) Site plan or document showing the proposed topography and the proposed changes to the boundaries of the flood hazard areas, floodway boundaries, and base flood elevations.
(c) The documentation submitted to FEMA for a Conditional Letter of Map Revision (CLOMR) and, if issued, the Conditional Letter of Map Revision. Submittal requirements and processing fees shall be the responsibility of the applicant. A CLOMR is required when a proposed flood control project alters a floodway and increases base flood elevations more than greater than 0.00 feet, or alters a watercourse a riverine flood Ordinance\Floodplain Management Ordinance Page 23 of 25 hazard area for which base flood elevations are included in the Flood Insurance Study or on the FIRM and floodways have not been designated and increases base flood elevations more than 1.0 foot."
SECTION 3: Applicability. For the purposes of jurisdictional applicability, this ordinance shall apply in the City of Santa Clara. This ordinance shall apply to all applications for development, including building permit applications and subdivision proposals, submitted on or after the effective date of this ordinance.

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Ordinance\Floodplain Management Ordinance Page 24 of 25 SECTION 4: SEVERABILITY . Where any section, subsection, sentence, clause, or phrase of these regulations is, for any reason, declared by the courts to be unconstitutional or invalid, such decision shall not affect the validity of the regulations as a whole, or any part thereof, other than the part so declared .

SECTION 5: EFFECTIVE DATE. This ordinance shall take effect thirty (30) days after its final adoption, however, prior to its final adoption it shall be published in accordance with the requirements of California Government Code Section 50022.3 and Section 808 and 812 of "The Charter of the City of Santa Clara, California." PASSED FOR THE PURPOSE OF PUBLICATION this 9TH day of MAY, 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

COUNCILORS: Becker, Chahal, Hardy, Jain, Park, and
Watanabe, and Mayor Gillmor
COUNCILORS: None
COUNCILORS: None
COUNCILORS: None
ATTEST:
~

ASSISTANT CITY CLERK

CITY OF SANTA CLARA
Attachments incorporated by reference: None
Ordinance\Floodplain Management Ordinance Page 25 of 25 City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-575 Agenda Date: 6/6/2023

REPORT TO COUNCIL

SUBJECT
Action on Approval of the West Portal Early Works Construction Transportation Management Plan for the Valley Transportation Authority’s BART Phase II Extension Project

COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development

EXECUTIVE SUMMARY
The VTA is moving forward with early construction activities on their Newhall Maintenance Yard property as a part of their project delivery for the BART Phase II Extension Project (Project). This property (located within the City of Santa Clara and City of San Jose) is the future launch site for the Project’s tunnel boring machine (TBM) and staging area during major construction and tunneling operations for the entire Project. VTA has prepared a Construction Transportation Management Plan to address potential temporary effects to multimodal transportation circulation, access, and emergency vehicle access needs during this early phase work. Due to the VTA’s request to have nighttime operations and utilize Brokaw Road (near Costco) for truck hauling access this item is being brought forward to Council for discussion and consideration.

BACKGROUND
This project is the Santa Clara Valley Transportation Authority's (VTA) BART Phase II Extension Project (Project) which is a four station, six-mile long extension of the BART system. The Project begins at the Berryessa/North San Jose BART Station and extends into San Jose with three stations in San Jose (28
th Street/Little Portugal, Downtown San Jose, and Diridon Stations), a final station in Santa Clara (i.e. Santa Clara BART Station), and a train maintenance and storage facility also known as the Newhall Maintenance Yard, see Attachment 1 for Project location maps.

The City Council held previous study sessions related to the Project on April 23, 2019, January 5, 2022, May 10, 2022, and March 21, 2023. Additionally, the City has entered into a Master Agreement and two Cooperative Agreements with the VTA and adopted the findings of the Final Supplemental Environmental Impact Report (FSEIR) completed by the VTA for the Project.

Upcoming Project Construction Activity Near Santa Clara : As highlighted during the March 21, 2023
Council study session, the VTA is moving forward with design and construction efforts in multiple packages. In May 2022, VTA awarded the Project’s Tunnel and Trackwork contract (Contract Package 2 or CP2) to the joint venture of Kiewit Shea Traylor (KST). The initial phase of work for KST is to prepare the West Portal site, located at VTA’s Newhall Yard property, as this will be the launch site for the Project’s tunnel boring machine (TBM) and staging area during major construction and tunneling operations.

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At the West Portal site, KST will be moving forward with early construction site preparation activities including site grading, temporary utility installation, construction of access roads, temporary field offices, tunneling shaft, an excavated materials bin, a tunnel lining factory, a precast concrete plant, a grout plant, and a tunnel lining segment storage area, and assembly of the TBM (Attachment 2, West Portal Early Works Site Maps). The anticipated sequencing for construction activities at the West Portal site includes multiple stages of work lasting from Summer 2023 through early 2025.

As required by the VTA, KST prepared a West Portal Early Works Construction Transportation Management Plan (CTMP) focused on analyzing and coordinating multimodal transportation circulation, access, and emergency vehicle access needs within and around construction areas. The CTMP also identifies and reduces to the extent possible construction-related transportation impacts.

It is important to note that the majority of construction activities on the West Portal site are within the City of San Jose’s jurisdiction and the San Jose City Council approved the CTMP on May 23, 2023.

Future CTMPs
: It is important to note that this CTMP is for West Portal Early Works construction only.

Future CTMPs will be prepared and reviewed by the City of Santa Clara and City of San Jose for tunneling muck removal and off-haul as well as other Project specific contract packages that affect San Jose and Santa Clara.

DISCUSSION
Due to the VTA’s request to have nighttime operations and utilize Brokaw Road (near Costco) for truck hauling access, this item is being brought forward to Council for discussion and consideration.

Below is key information related to the CTMP.

The West Portal Early Works CTMP identifies and reduces to the extent possible construction related impacts. Notable components of this CTMP are as follows:
· Construction sequencing and staging
· Working hours and days of operation
· Noise and Nighttime Work
· Employee parking
· Detour routes, construction access, and truck volume/distribution · Transportation operational Level of Service analysis
· Coordination with PayPal Park events and operations
· Coordination with on-going nearby development projects construction (i.e. Gateway Crossings) and existing businesses (i.e. Costco).

Construction Sequencing and Staging
: The CTMP provides information related to how the VTA and KST plan to sequence and stage construction activities on the West Portal site. Table 1 (below) provides a breakdown of the four construction stages and the period of construction for each stage.

The estimated full duration of early works is 19 months.

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Table 1, Construction Sequencing and Staging
Stage Construction Activity Estimated Duration
1 Site Grading Summer 2023 for 5 Months
2 Site Development Summer 2023 for 9 Months
3 Precast Plant and TBM Segment
Storage Area
Summer 2023 for 13 Months
4 TBM Shaft and Muck Bin Excavation Beginning Fall 2023 for 17 Months Working Hours and Days of Operation: VTA and KST have indicated that due to the level of effort needed to complete Early Works construction, the overall Project schedule, and the need to have continuous operations at the West Portal site, construction activities will require a mix of single-shift, double-shift, and Saturday work. Table 2 below provides a high-level summary of proposed working hours and days for this Early Works construction.

Table 2, Working Hours and Days
Shift Hours Days Estimated Duration
Single Shift (12 hours) 6am to 6pm M-F Mid-2023 through late 2023 Double Shift (22 hours) 6am to 4am M-F, Sat Late 2023 through early 2025 Specific construction activities, such as concrete pours require a 22-hour double-shift truck hauling schedule to deliver and install continuous concrete and are anticipated to start in late 2023 for 15 months. Attachment 3, Proposed Working Hours and Haul Hours, provides a more detailed summary of the planned working hours, hauling hours, and days of operation.

The CTMP also indicates that there will be no hauling on major holidays (day before Thanksgiving, Thanksgiving Day, Christmas Eve, Christmas Day, New Year’s Eve, New Year’s Day, Memorial Day, Independence Day, and Labor Day) as no construction work is anticipated on those days, unless emergency work is required on-site. City staff has also discussed with the VTA the need to monitor traffic along Brokaw Road and Coleman Road during the holiday season and adjust as necessary.

Noise and Nighttime Work
:

The City’s Noise Ordinance requires that any construction within 300 feet of any residentially zoned property occur between 7am and 6pm on weekdays (Monday through Friday), and within the hours of 9am and 6pm on Saturdays. No construction is permitted within of 300 feet of residentially zoned properties on Sundays and holidays. The City’s Cooperative Agreement with the VTA regarding the Project states that the City may authorize night hours of construction adjacent to residential uses.

Immediately adjacent to the West Portal site is the Gateway Crossings development. This development is being completed in multiple phases with Phase I currently under construction.

Although the development site is within 300-feet, Phase 1 of the development is located greater than 300-feet away from the West Portal site. Consequently, there will not be any Early Works construction on the West Portal site within 300-feet of occupied residential units although it is City of Santa Clara Printed on 6/2/2023Page 3 of 6
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expected that nighttime work will result in hauling on Brokaw Road.

KST is completing a pre-construction noise assessment to establish ambient noise conditions surrounding the site. A Noise and Vibration Control Plan is currently being prepared, separate from this CTMP, to specify noise reduction and mitigation measures to ensure that surrounding land uses will not be impacted by construction noise.

Employee Parking
: Approximately 300 employee parking stalls will be provided at the southwest end of the project site and are projected to be sufficient during Early Works construction.

Detour Routes
: Roadway detour routes are not anticipated for any early construction activities at the West Portal site. No sidewalk, shoulder, or lane closures are anticipated other than potential temporary lane closures for the installation of utilities.

Construction Access: Construction trucks accessing the West Portal site will originate from and depart to Interstate 880 and use project haul routes along Coleman Avenue, Newhall Drive (San Jose), and Brokaw Road (Santa Clara) to access the site. Attachment 4 provides a map of the proposed truck haul routes.

Truck Volume and Distribution
: The CTMP estimates a high of 140 average daily trucks for four months of the 19-month duration. Peak truck volumes (typically five days a month) are estimated at a high of 340 trucks per day for ten months of the 19-month duration. Attachment 5, Truck Volumes by Month, provides a more detailed summary of truck volume for the early works to occur on the site.

Construction access to the site is from Newhall Drive in San Jose and Brokaw Road in Santa Clara.

Based on staff concerns related to current congestion issues on Brokaw Road due to Costco, the CTMP limits weekday (Monday through Friday) truck volumes on Brokaw Road to 25 percent of total truck volume. The remaining 75 percent of trucks will access the site from Newhall Road in San Jose.

On Saturdays, during non-PayPal Park event days, truck volume on Brokaw Road will reduce to 10 percent, with the remaining 90 percent of truck volume using Newhall Drive.

Transportation Operational Level of Service Analysis
: The CTMP includes a transportation
operational Level of Service (LOS) analysis of nearby intersections to determine the effects that truck hauling is projected to have on the transportation network. The LOS analyses analyzed nearby intersections in Santa Clara including the intersections of Coleman Avenue and Brokaw Road and Brokaw Road and Costco Driveway (new signalized intersection at the Brokaw Road access to Costco). The LOS analysis indicates that the addition of average and peak project trucks to these two intersections will affect signal operations at these intersections. Staff is coordinating with the VTA on potential signal timing adjustments to address this as much as possible.

Coordination with PayPal Park Events and Operations
: VTA and KST have ongoing coordination
meetings with the City of San Jose, City of Santa Clara, and PayPal Park management and traffic staff to coordinate construction activities during PayPal Park events. An Event Management Plan is being prepared to determine and minimize potential impacts from trucking activities during PayPal event ingress and egress.

Coordination with On-Going Nearby Development Projects
: The CTMP includes information about
concurrent construction activities and work on nearby development projects. Additionally, VTA has had communication with surrounding property owners, businesses (example Costco), and developers City of Santa Clara Printed on 6/2/2023Page 4 of 6
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23-575 Agenda Date: 6/6/2023
related to Early Works construction.

Additional Follow Up Efforts: VTA and KST will continue to monitor traffic and develop/refine the following plans.
· Trucker Management Plan: In coordination with the City of San Jose and City of Santa Clara, the VTA will prepare a Trucker Management Plan to manage the truck drivers using the approved haul routes and maintain the agreed-upon distribution of truck traffic between Newhall Drive and Brokaw Road.
· Traffic Contingency Plan
: In coordination with the City of San Jose and City of Santa Clara, the VTA shall prepare a Traffic Contingency Plan to outline lines of communication, processes, and route options to address hauling activities if Newhall/Coleman or Brokaw/Coleman intersections are blocked due to unforeseen events or congestion.

Business Resource Program (BRP)
: It is worth noting that for the entire BART Phase II Extension Project, VTA is developing a BRP to minimize disruption to small businesses near above-ground construction areas. The BRP will include elements such as 1) Signage and Wayfinding, 2) Shop Local Marketing, 3) Small Business Resource Connections and Support, and 4) Direct Financial Assistance.

The VTA is seeking the City’s approval of the West Portal Early Works CTMP (Attachment 6) to support an anticipated construction start in Summer 2023.

ENVIRONMENTAL REVIEW
On April 5, 2018, the VTA, as lead agency under the California Environmental Quality Act of 1970, certified the Project’s FSEIR and adopted findings as required by CEQA. On July 13, 2021, the City adopted Resolution No. 21-8990 which adopted the Findings of the FSEIR completed by VTA for the BART Silicon Valley Phase II Extension Project. The City’s review and approval of the West Portal Early Works CTMP is within the scope of the FSEIR.

FISCAL IMPACT
The City and VTA have entered into a Master Agreement and two Cooperative Agreements related to VTA’s reimbursement of City’s staff time spent on the Project.

COORDINATION
The Project regularly conducts public outreach and engagement activities to ensure that local stakeholders and community members are kept up to date on the Project. This is done through various tabling events, meetings with local stakeholders, quarterly BART Phase II Community Working Group meetings, and the distribution of electronic communications (e.g., email blasts, electronic newsletters, social media, and blog posts) for Project milestones. On March 15 and 16, 2023, VTA hosted in-person and virtual public meetings for the community to learn about the early construction activities, ask questions, and provide feedback. In addition, VTA has engaged with stakeholders whose local street network would be most affected by Project haul routes, including Costco, Hunter Partners, and the San José Earthquakes/PayPal Park.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website City of Santa Clara Printed on 6/2/2023Page 5 of 6
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23-575 Agenda Date: 6/6/2023
and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

ALTERNATIVES

1. Approve the West Portal Early Works Construction Transportation Management Plan for the VTA’s BART Phase II Extension Project

2. Provide other direction to staff and the VTA on the West Portal Early Works Construction Transportation Management Plan for the VTA’s BART Phase II Extension Project

RECOMMENDATION
Alternative 1: Approve the West Portal Early Works Construction Transportation Management Plan for the VTA’s BART Phase II Extension Project
Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jōvan D. Grogan, City Manager

ATTACHMENTS

1. Project Location Maps

2. West Portal Early Works Site Maps

3. Proposed Working Hours and Haul Hours

4. Truck Haul Routes Map

5. Truck Volumes by Month

6. VTA’s BART Phase II Extension, West Portal Early Works CTMP City of Santa Clara Printed on 6/2/2023Page 6 of 6
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ATTACHMENT 1, PROJECT LOCATION MAPS
VTA BART Silicon Valley Extension Program

Phase I
Phase II
BART Warm Springs/
South Fremont Station

SANTA CLARA
Santa C
City Hal
Santa Clara S

FREMONT
Diridon Station
SAN JOSE 28th Street/
Little Portugal Station
ow town San Jose Station
SJSU
~
ATTACHMENT 1, PROJECT LOCATION MAPS
Phase II Extension (Map 1)

SANTA CLARA

STATION
CITYOF

SANTACLARA
Stockton
~ Avenue
i!> "'I,,; Mid-T.innel
f~ Facility
CITYOF_ -'i!>~

SANJOSE
NOTTO SCAl E
\ I
28TH STREET/
hlTTLE PORTUGAL

ST-ATION
LEGEND
- Phase I Ali~nmer,t
- Phase II Ground, Level Allg nmo,nl
= Pha.., II Tunnel Allgnm.,nt
ATTACHMENT 1, PROJECT LOCATION MAPS
Phase II Extension (Map 2)

---------- -·-·-------------------;;-
-·~:::,
I A 6-Mole I Extension of BART Se,vlce Q 4 New BART Stations -fil 2 Mid-Tunnel Facilities re, Storage Yard & Maintenance Facility ATTACHMENT 1, PROJECT LOCATION MAPS
Santa Clara Station Map
West Portal Early Works
Project Location
ATTACHMENT 3, PROPOSED WORKING HOURS AND HAUL HOURS

Early Work Activities Single Double Work Haul
Shift Shift Hours Hours
Stage 1 - Site Grading (Begi nning Summer 2023, 6 Months) Site grading X SAM- SPM SAM-4PM
Stage 2 - Site Developmen t (Begi nning Summer 2023, 9 Months) Construction of site roads X SAM- SPM SAM-4PM
Installation of site offices X SAM- SPM SAM-4PM
Stage 3 - Precast Plant and TBM Segment Storage Area (Beginn ing Summer 2023, 13 Months) Construction of precast plant X SAM - 6PM 6AM - 4PM
Stage 4 -TBM Shaft and Muck Bin Excavation (Beginn ing Fall 2023, 17 Months) Muck bin excavation X SAM- SPM SAM-4PM
Support of excavation - slurry walls X SAM-4AM SAM-4AM
TBM shaft and ramp excavation X SAM-4AM SAM-4AM
TBM shaft concrete pour X SAM-4AM SAM-4AM
TBM supporting facilities X SAM- SPM SAM-4PM
TBM assembly X SAM-4AM SAM-4PM
Start production of the precast plant X SAM - 11PM SAM-4PM Construction of interior concrete build-out X SAM- SPM SAM-4PM area and equipment foundations Construction of grout plant X SAM- SPM SAM-4PM
Notes:

1. Construction activities will be 6 days a week.

CTMP for West Portal Early Works Revision Number: 03 Date: 05/01/2023

Page 13 ends

City Council and Authorities ConcurrentJune 6, 2023

City Council and Authorities Concurrent
June 6, 2023