Agenda Item #13.6
For Council Meeting of: September 15, 2026
CITY OF SANTA ROSA
CITY COUNCIL
TO: MAYOR AND CITY COUNCIL
FROM: DAN HENNESSEY, DIRECTOR OF TRANSPORTATION AND PUBLIC WORKS
JENNIFER BURKE, DIRECTOR OF SANTA ROSA WATER
SUBJECT: APPROPRIATION OF EXPEDITED DRINKING WATER GRANT FUNDS AND AUTHORIZATION OF FUTURE GRANT-RELATED APPROPRIATION ADJUSTMENTS FOR THE PARK ROYAL WATER CONSOLIDATION PROJECT AGENDA ACTION: RESOLUTION
RECOMMENDATION
The Board of Public Utilities, Santa Rosa Water and the Transportation and Public Works Department recommend that the Council, by resolution: 1) increase revenue and expenditure appropriations by $2,683,593 for the Park Royal Water Consolidation Project, Contract No. C02534, based on grant funding awarded by the State Water Resources Control Board under Funding Agreement No. D2502061; and 2) authorize the City Manager or designee to approve future appropriation adjustments reflecting amendments to the funding agreement, provided that the adjustments do not require a City funding contribution or create an obligation of the General Fund. This action requests a one-time appropriation and delegates authority for future appropriation adjustments.
EXECUTIVE SUMMARY
Funding Agreement No. D2502061 provides up to $2,683,593 in principal-forgiveness funding for the Park Royal Consolidation Project, subject to the terms and conditions of the Agreement. The Project would connect 27 single-family residential parcels currently served by the Park Royal Mutual Water Company to the City’s public water system and improve fire-protection infrastructure within the service area. The recommended action would establish the revenue and expenditure appropriations necessary for the City to incur and obtain reimbursement for eligible planning, design, and other authorized Project costs. The appropriation does not authorize construction or construction-related activities, which may proceed only after completion of applicable environmental review and receipt of the approvals required by the funding agreement.
GOAL
This item relates to Council Goal #2 - Invest in the Development and Maintenance of the City's Infrastructure and Goal #4 - Foster a Safe, Healthy, and Inclusive Community by providing clean drinking water to all residents within the project area.
BACKGROUND/PRIOR COUNCIL REVIEW
The objective of this project is to connect the Park Royal Mutual Water Company (PRMWC) to the City's public water system and to provide upgraded fire-protection infrastructure within the service area.
The PRMWC is a small private water system that provides 27 single-family parcels with water service. PRMWC’s water system consists of two groundwater supply wells, storage tank(s), and a water distribution system. Located within unincorporated Sonoma County, the water system is regulated by the SWRCB.
The SWRCB has identified PRMWC as having water quality issues due to arsenic concentrations that exceed the applicable State maximum contaminant level (MCL) for arsenic.
The PRMWC lacks the technical, managerial, or financial capacity to properly operate or maintain the treatment systems necessary to mitigate the identified water quality issues.
Prop 1, administered by the SWRCB, authorized $7.545 billion in general obligation bonds to fund statewide water infrastructure projects. Funding priorities include surface and groundwater storage, ecosystem and watershed protection and restoration, and drinking water safety. To address localized water quality deficiencies under this program, the SWRCB contracted RGH Consultants to provide professional engineering design services, planning, and system expertise.
The proposed project will connect PRMWC’s independent water system to the City’s public water infrastructure. The connection point to the existing water main will be established at the intersection of Hall Road and Park Royal Avenue. Potable water meters will be installed to connect each of the 27 single-family residential parcels within PRMWC’s water system. Upon completion of the project, the existing water supply wells and redundant distribution infrastructure will be either removed or permanently abandoned in place.
Project implementation requires coordination, review, and permitting from the City of Santa Rosa Fire Department, the Sonoma County Fire Department, Sonoma Public Infrastructure, Permit Sonoma, and the California Department of Housing and Community Development.
The total estimated cost of the project is $2.68 million, which will be fully funded through the SWRCB EDWG program. The funding is allocated under Prop 84, the Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006. Prop 84 authorized the California legislature to appropriate $1 billion in Integrated Regional Water Management funding to assist local agencies in securing long-term regional water resilience, including the delivery of safe drinking water and the protection of water quality and the environment.
ANALYSIS
The City has secured SWRCB grant funding through the EDWG program to transition nine vulnerable communities to municipal water infrastructure. Transitioning these communities to municipal water will eliminate reliance on contaminated wells and ensure long-term compliance with state public health standards.
The State Water Resources Control Board requires approval from the City’s governing body to appropriate the grant proceeds and proceed with grant-funded activities. Authorizing this action will empower Santa Rosa Water accept the allocated grant, and expend State funds to carry out the Project.
The Board of Public Utilities previously authorized Santa Rosa Water to enter into a Financial Assistance Agreement with the State Water Resources Control Board. The Board of Public Utilities (BPU) now recommends that the Council approve the resolution authorizing the funding appropriation for the Agreement, under which the Water Board will reimburse all water distribution system improvement costs for the Project through the EDWG program. All costs for the Project will be reimbursed from the SWRCB via the funding agreement. Appropriation amendments will be as needed during the administration of the Project and will be brought to BPU and then approved for appropriation through the City Manager or delegee.
FISCAL IMPACT
The recommended action will increase revenue and expenditure appropriations by $2,680,593 for the Park Royal Water Consolidation Project. Eligible Project costs are reimbursable under Funding Agreement No. D2502061. No City matching contribution is required, and the action will have no impact on the General Fund.
ENVIRONMENTAL IMPACT
On March 23, 2026, the City determined that the Park Royal Consolidation Project was categorically exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15282(k) and Public Resources Code sections 21080.21 and 21080.47 because the Project involves the installation of less than one mile of new subsurface pipeline within an existing public right-of-way, is located entirely within previously disturbed roadway infrastructure, and is intended to provide safe and reliable drinking water service to a small disadvantaged community. A Notice of Exemption was filed with the Sonoma County Clerk on March 23, 2026, as Document No. 49-03232026-098; and with the State Clearinghouse on March 24, 2026, as SCH No. 2023031003. The recommended action appropriates funding for the same Project and does not modify the previously reviewed physical scope or add new project locations. Accordingly, the prior CEQA determination remains applicable, and no further environmental review is required.
BOARD/COMMISSION/COMMITTEE REVIEW AND RECOMMENDATIONS
On November 20, 2025, the Board of Public Utilities approved resolution RES-2025-012 authorizing Santa Rosa Water to enter into a Financial Assistance Agreement with the State Water Resources Control Board and authorizing and designating representatives for the Park Royal Consolidation Project.
On August 20, 2026, the Board of Public Utilities, by motion, recommended that the City Council approve the appropriation of $2,680,593 in EDWG funding for the Park Royal Water Consolidation Project and authorize the proposed process for future grant-related appropriation adjustments.
NOTIFICATION
Not applicable.
ATTACHMENTS
Attachment 1 – Project Location Map
Resolution / Exhibit A – Funding Agreement No. D2502061
PRESENTERS
Christa Siegenthaler, Deputy Director of Engineering Services Lisa Welsh, Supervising Engineer
Jose Mederos, Assistant Engineer
APPROPRIATION OF EXPEDITED DRINKING WATER GRANT FUNDING FROM THE STATE WATER RESOURCES CONTROL BOARD FOR THE PARK ROYAL WATER CONSOLIDATION PROJECT PAGE 3 OF 3