City Council
Report
City Council Meeting: September 8, 2026
Agenda Item: 4.A
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To: Mayor and City Council
From: Christopher Dishlip, Director of Public Works, Water Resources Division Subject: Adoption of a Resolution Authorizing the Application for Grant Funds from the U.S. Department of Interior - Bureau of Reclamation Title XVI Water Reclamation and Reuse Program
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines;
2. Adopt the attached resolution authorizing the application for grant funds in the amount of up to $40,000,000 from the U.S. Department of Interior - Bureau of Reclamation Title XVI Water Reclamation and Reuse Program for the Santa Monica Advanced Reuse for Tomorrow (SMART) Project in the Public Works Department; and
3. Authorize the City Manager to negotiate and execute all necessary documents to apply for the grant, accept the grant, if awarded, and accept all grant renewals.
Summary
The City of Santa Monica’s (City) Department of Public Works – Water Resources Division is applying for grant funding from the United States Bureau of Reclamation’s (USBR) Title XVI Water Reclamation and Reuse Program to support implementation of the Santa Monica Advanced Reuse for Tomorrow Project (SMART Project). The Title XVI Program provides up to $40,000,000 in funding for the planning, design, and construction of water reclamation and reuse projects. The SMART Project would enhance water supply resiliency and emergency response for the community and Santa Monica’s local economy. If the SMART Project is awarded funding, the Title XVI Water 2 of 4
Reclamation and Reuse Program requires an official resolution adopted by the City’s governing body to accept the grant award.
Discussion
The USBR Title XVI Water Reclamation and Reuse Program provides financial assistance for projects that develop new, drought-resilient local water supplies to address growing water demands and resource challenges. By expanding existing water resources, reducing reliance on imported water, and increasing water supply reliability, these projects strengthen long-term water security and community resilience.
The City’s Water Resources Division is applying for Title XVI funding for its SMART Project. The SMART Project would support expansion of the City’s recycled water system and implement direct potable reuse to enhance water supply resiliency and expand the City’s local water supply portfolio. The SMART Project would integrate the Sustainable Water Infrastructure Project with the recently completed Olympic Advanced Water Treatment Facility and upgraded Arcadia Water Treatment Plant to maximize local water production. Specifically, components of the SMART Project include a new recycled water booster pump station, expansion of the City’s recycled water network, treatment upgrades and a new Water Operations Center at the Arcadia Water Treatment Plant. The SMART Project would strengthen the City's long-term water supply resilience while establishing a regional model for the planning, design, and implementation of advanced water treatment and reuse systems that expand local water supplies and reduce reliance on imported water supplies. The SMART Project builds upon Santa Monica's nationally recognized leadership in innovative water infrastructure.
It follows the successful completion of the City’s award-winning Sustainable Water Infrastructure Project in 2022, which pioneered integrated stormwater harvesting and potable reuse, as well as the expansion of the City's groundwater desalination facility featuring the world's first municipal Flow Reversal Reverse Osmosis retrofit. By reducing reliance on increasingly vulnerable and overallocated imported water supplies from the Colorado River and the State Water Project, the SMART Project helps the City 3 of 4
proactively address drought-related allocation reductions, potential disruptions from natural disasters, and rising water costs while advancing the sustainable management of local water resources.
The total project cost is currently estimated to be approximately $93 million, and the Title XVI Program requires a minimum City cost share of 75 percent of the total project cost. The 75 percent matching funds are available from the Water Enterprise Fund through a combination of CIP projects, such as the Arcadia Operations Building Replacement Project, and through either a water revenue bond or a state/federal loan, as outlined in the 2025 Water Rate Study adopted by City Council on June 2025. Staff would return to Council with budget changes if the grant is awarded.
Prior to award, the Bureau of Reclamation requires recipients to provide an official resolution adopted by the organization’s governing body to commit the recipient to financial and legal obligations of the financial assistance award. Staff is requesting authorization to enter into agreement, if awarded, and to submit any required documents, invoices, and reports to obtain Title XVI Water Reclamation and Reuse Program funding.
Environmental Review
Authorization of the application for grant funding from the U.S. Department of the Interior – Bureau of Reclamation’s Title XVI Water Reclamation and Reuse Program would have no possibility of significant effect on the environment and, therefore, is exempt pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines. If awarded, the use of the grant funding to construct the SMART Project would be subject to state and federal environmental review at the time the project is proposed.
Financial Impacts and Budget Actions
Staff seeks authority to apply for a grant from the USBR to support the SMART Project 4 of 4
and to accept the grant and all grant renewals, if awarded. There is no immediate financial impact or budget action necessary as a result of the recommended action. The Title XVI Program requires a minimum City cost share of 75 percent of the total project cost. Staff would return to Council with budget changes if the grant is awarded.
Prepared By: Sunny Wang, Water Resources Manager
Approved Forwarded to Council
Attachments:
A. Resolution - Title XVI Funding Program