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Home My WebLink AboutStaff Report 146-06TO: FROM: DATE: SUBJECT: of Palo Alto City Manager’s Rep r HONORABLE CITY COUNCIL CI~ ~NAGER DEPART~NT: P~LIC WO~S MARCH 6, 2006 CMR: 146: 06 APPROVAL OF A~IENDMENT NO. TWO TO THE MEMORANrDU-M OF AGREEMENT PROVIDING FOR IMPLEMENTATION OF THE SANTA CLARA VALLEY URBAN RUNOFF POLLUTION PREVENTION PROGRAM RECOMM-ENDATION Staff recommends that Council approve and authorize the mayor to execute the attached Amendment No. Two to the Memorandum of Agreement (MOA) for the Santa Clara Valley Urban Runoff Pollution Prevention Program (Attachment A). BACKGROUND On April 16, 1990, Council approved a memorandum of agreement (MOA) between 13 Santa Clara County (County) cities, the County, and the Santa Clara Valley Water District (District) for the implementation of the Santa Clara Valley Nonpoint Source Pollution Control Program (Program) (CMR:255:90). The agreement allowed the signatory agencies to apply for and obtain a joint National Pollutant Discharge Elimination System (NPDES) permit for the discharge of municipal storm water to local creeks and San Francisco Bay. The name of the Program was changed from °%Ionpoint Source Pollution Control Program" to "Urban Runoff Pollution Prevention Program" in 1999 to reflect the Program’s emphasis on urban runoff pollutant sources and to create a clearer image for the general public. On December 6, 1999, Council approved a revised MOA that contained an updated description of the purpose of the Program, its tasks and responsibilities, membership, decision-making procedures, and ground rules for participation (CMR:435:99). The revised MOA was set to expire on March 10, 2005. Shortly prior to that date, the Santa Clara Valley Water District Board of Directors expressed concern regarding the fiscal impacts of the MOA on the District. Under the terms of the agreement, the District pays 30% of the cost of Program activities (Palo Alto’s share is 4.06%). Due to the State’s takeaway of a significant portion of the District’s property tax revenue, the District Board was not willing to approve a document that committed the District to this level of expenditure on an indefinite basis. In order to address the District’s concerns, Palo Alto and the other Program members approved Amendment No. One to the MOA, which e~ended the term of the agreement on an interim basis for a period of one year (until March 10, 2006) and stipulated that the Program conduct an independent review to evaluate the MOA’s cost allocation formula and evaluate the term, scope, and cost of the Program (CMR: 175:05). CMR:146:06 Page 1 of 3 DISCUSSION In June 2005, the Program Manager issued a Request for Proposals seeking a consultant to perform an independent review of the Program MOA. Members of the Program’s Budget Ad- Hoc Task Group reviewed two consultant proposals and selected the firm of Hilton, Farnkopf & Hobson, LLC (HFH) to perform the review. HFH reviewed financial and organizational information provided by the Program and compared it with similar information from other storm water programs throughout the Bay Area and Southern California. HFH submitted its final report on November 23, 2005 (Attachment B). The report summarized HFH’s evaluation of the cost allocation formula and the term, scope, and cost of the Program. The report contained the following primary findings: The Program’ s allocation of costs to its member agencies is based upon a combination of benefits received and storm runoff factors. Most of the other storm water programs surveyed base their cost allocations on an average of surface area and population. When compared to the other storm water programs, the Program’s cost allocations approximate the allocations that rely on an average of surface area and population. The term of the Program MOA should be tied to the termination date of the Program’s NPDES storm water discharge permit, with a grace period following the permit termination date to allow for a smooth transition between permits. The Program is more rigorously managed than the other storm water programs surveyed. The Program MOA stipulates management controls, self-audit procedures, budget monitoring, and reporting requirements not found in any of the other programs. Based on various benchmark comparisons (e.g. per capita spending, spending per square mile of service area, etc.), the cost of the Program is comparable to the costs of other Bay Area storm water programs. The ~ report was submitted to the Program Management Committee for review and approval. Based upon the report’s positive findings, the Management Committee voted to recommend to the governing bodies of their agencies that the current Program cost allocation formula be retained. District staff has reviewed its budget and identified an appropriate funding source that will allow the District to continue contributing 30% of the Program costs. There is an ongoing need to continue the cooperative relationship between the agencies that make up the Program. The joint NPDES permit that allows the Program’s member agencies to discharge their municipal storm water to local creeks is reviewed, modified as appropriate, and reissued by the Regional Water Quality Control Board (Board) every five years. The current permit is due to expire in 2006. The Program has submitted an application for the next generation permit to the Board. In order to facilitate the inter-agency cooperation required during the reapplication process and to allow ongoing joint storm water pollution prevention efforts to continue without interruption, the MOA must be renewed. The attached Amendment No. Two to the MOA will retain the existing cost allocation formula and extend the term of the agreement until one year beyond the termination date of the next NPDES permit issued to the Program. The amendment also contains some minor "clean-up" language that updates the relevant NPDES permit references and designates the City of Sunnyvale as the Program’s new contracting/fiscal agent, replacing the District. CMR: 146:06 Page 2 of 3 RESOURCE IMPACT Approval of Amendment No. Two to the MOA commits the City to continued participation in the Santa Clara Valley Urban Runoff Pollution Prevention Program until one year beyond the termination date of the next NPDES storm water discharge permit issued to the Program (next permit is estimated to run through the year 2011). This includes payment of the City’s proportionate share of Program costs (4.06%, totaling approximately $140,000 per year); funding for and performance of the storm water pollution prevention activities contained in the City’s Urban Runoff Management Plan; and any other NPDES permit requirements.Continued funding for these activities is available from the Storm Drainage Fund. POLICY IMPLICATIONS Extension of the MOA is consistent with Comprehensive Plan Program N-29: Actively participate in programs such as the Santa Clara Valley Urban Runoff Pollution Prevention Program to improve the quality of storm water runoff. ENVIRONMENTAL REVIEW There is no environmental assessment required in conjunction with this report. The NPDES Program is exempt from the provisions of the California Environmental Quality Act (CEQA) under Section 15308 of the CEQA guidelines. ATTACtEVIENTS Attachment A: Amendment No. Two to the Memorandum of Agreement for the Santa Clara Valley Urban RunoffPollution Prevention Program. Attachment B: Review of Memorandum of Agreement (Hilton, Farnkopf & Hobson, LLC, November 23, 2005) PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: GLENN S. ROBERTS Direc~r of Public Assist~t C~ty Manager cc:Adam Olivieri, Urban RunoffProgram Manager CMR:146:06 Page 3 of 3 ATTACHMENT A SECOND AMENDMENT TO AGREEMENT PROVIDING FOR IMPLEMENTATION OF THE SANTA CLARA V.~LEY URBAN RUNOFF POLLUTION PREVENTION PROG1L~M THIS SECOND AMENDMENT TO AGREEMENT PROVIDING FOR IMPLEMENTATION OF THE SANTA CLARA VALLEY URBAN RLENOFF POLLUTION PREVENTION PROGRAM (the "Amendment") is entered into by and between the SANTA CLARA VALLEY WATER DISTRICT, a local public agency of the State of California ("District"); CITY OF CAMPBELL, a municipal corporation of the State of California; CITY OF CUPERTINO, a municipal corporation of the State of California; CITY OF LOS ALTOS, a municipal corporation of the State of California; TO\VN OF LOS ALTOS HILLS, a municipal corporation of the State of California; TOVV~N OF LOS GATOS, a municipal corporation of the State of California; CITY OF MILPITAS, a municipal corporation of the State of California; CITY OF MONTE SERENO, a municipal corporation of the State of California; CITY OF MOUNTAIN VIEW, a municipal corporation of the State of California; CITY OF PALO ALTO, a municipal corporation of the State of California; CITY OF SAN JOSE, a municipal corporation of the State of California; CITY OF SANTA CLARA, a municipal corporation of the State of California; CITY OF SARATOGA, a municipal corporation of the State of California; CITY OF SL_rNNYVALE, a municipal corporation of the State of California; and COUNTY OF SANTA CLARA, a political subdivision of the State of California. All of the above-mentioned entities are hereinafter collectively referred to as "Parties" or individually as ’°Party." RECITALS A. The Parties previously entered into that certain Agreement Providing For Implementation of the Santa Clara Valley Urban Runoff Pollution Prevention Program (the °’Agreement" or "MOA") pursuant to which the Parties established certain terms and conditions relating to the implementation and oversight of the Santa Clara Valley Urban Runoff Pollution Prevention Program (the "Program"), including a cost sharing allocation, which was appended thereto as Exhibit A. A copy of the Agreement, including Exhibit A, is attached hereto as Appendix 1. Unless otherwise set forth herein, all terms shall have the meaning set forth in the A~eement; B. The Agreement originally provided for a five year term, which, based on its execution, was set to conclude on or about March 10, 2005. However, on or about February 20, 2005, the Parties unanimously entered into a First Amendment to the Agreement (attached hereto as Appendix 2), which extended the term of the Agreement by one additional year and, during that year, directed the Program to undertake a management and cost allocation review. The Program used an independent contractor to conduct the management and cost allocation review, which was completed and submitted to the Management Committee in November 2005; s~2050445 C. The Parties expect to utilize the Program to continue to represent their interests in negotiating the terms of a renewed NPDES Permit, which may manifest itself in a Municipal Regional Permit ("MRP"), in 2006, and to othe~dse address a variety of matters related to assisting the Parties in effectuating compliance with the Permit and/or MRP after March 10, 2006; D. The Parties also expect to continue to utilize the Pro~am’s preferred approach of achieving consensus to resolve issues and reach decisions, and to rely on the Majority Vote mechanism set forth in Section 2.08 of the A~eement at the Management Committee level only when consensus-based resolutions appear or become elusive; E. The Parties desire to update the Agreement and extend the term of the MOA as set forth below; F. Section 7.02 of the MOA provides that it may be amended by the unanimous written agreement of the Parties and that all Parties agree to bring any proposed amendments to their Council or Board, as applicable, within three (3) months following acceptance by the Management Committee; and G. The Program’s Management Committee accepted this Amendment for referral to the Parties’ Councils and/or Boards at its meeting on December 15, 2005. NOW, THEREFORE, THE PARTIES HERETO FURTHER AGREE AS FOLLOWS: 1. Reco_o-nition of Current Permit. Recital F of the Agreement is hereby amended by the following additional subsections: 3. Order No. 01-024 (re-issued NPDES Permit No. CAS029718); adopted February 21, 2001; 4. Order No. 01-119 (Modification to re-issued NPDES Permit No. CAS029718); adopted October 17,200!; 5. Order No. R2-2005-0035 (Further Modification to re-issued NPDES Permit No. CAS029718); adopted July 20, 2005. 2. Cost Sharin~ Allocation. Effective with fiscal year 2007, the following footnote shall be deemed to have been added to "Exhibit A" of the MOA and to be shown by means of an asterisk placed immediately following the Proportional Share of "30.02%" shown for the District: *One-third of the District’s 30.02% contribution is expected to be from funding derived by the District from Outcome 2 and Activity 2.5 of the voter-adopted Clean Safe Creeks program; the remaining ~ro-thirds of the District’s contribution is expected to be derived by the District from property tax revenues. s52050445 3. Contractino_/Fiscal Ao_ent. Section 4.02 of the A~eement is hereby replaced by the following: In March 2005, the District notified the Management Committee that it was withdrawing as the Contracting/Fiscal Agent within ninety (90) days; the City of Sunnyvale thereafter a~eed to serve as the Contracting/Fiscal Agent and was nominated to do so by another Party and selected as the Program’s Contracting!Fiscal Agent by a majority vote of the Management Commi~ee. The City of Sunnyvale may withdraw as the Contracting/Fiscal Agent upon the provision of ninety (90) days written notice to the Management Committee. 4. Extension of Term of A~reement. Sections 6.02 and 6.02.01 of the Agreement, as previously amended, are hereby replaced as follows: This A~eement shall have a term extending one fiscal year beyond the termination date of the next NPDES Permit issued to the Parties by the RWQCB-SFBR; such termination date shall include any administrative extension of the next NPDES Permit’s term which occurs pursuant to the NPDES regulations. 5. Supersedin_o Effect. This Second Amendment of the Agreement shall supersede and replace the First Amendment of the Agreement. [remainder of page intentionally blank] s~2050445 IN WITNESS WHEREOF, the Parties have executed this Amendment effective as of March 10, 2006. Santa Clara Valley Water District: County of Santa Clara: cio, of By: Name: Title: Date: By: Name: Title: Date: By: Name: Title: Date: s~2050445 4 Appendix 1 A~eement Providing For Implementation of the Santa Clara Valley Urban Runoff Pollution Prevention Program as fully executed as of March 1 O, 2000 s~2050445 AGREEMENT PROVIDING FOR IMPLEMENTATION OF THE SANTA CLARA VALLEY URBAN RUNOFF POLLUTION PREVENTION PROGRAM THIS AGREEMENT, is made and entered into this day of 1999 by and between the SANTA CLARA VALLEY WATER DISTRICT (DISTRICT), a local public agency of the State of California; COUNTY OF SANTA CLARA, a political subdivision of the State of California; CITY OF CAMPBELL, a municipal corporation of the State of California; CITY OF CUPERTINO, a municipal corporation of the State of California; CITY OF LOS ALTOS, a municipal corporation of the State of California; TOWN OF LOS ALTOS HILLS, a municipal corporation of the State of California; TOWN OF LOS GATOS, a municipal corporation of the State of California; CITY OF MILPITAS, a municipal corporation of the State of Califomia; CITY OF MONTE SERENO, a municipal corporation of the State of California; CITY OF MOUNTAIN VIEW, a municipal corporation of the State of California; CITY OF PALO ALTO, a municipal corporation of the State of California; CITY OF SAN JOSE, a municipal corporation of the State of California; CITY OF SANTA CLARA, a municipal corporation of the State of California; CITY OF SARATOGA, a municipal corporation of the State of California; and CITY QF SUNNYVALE, a municipal corporation of the State of California. All of the above-mentioned entities are hereinafter collectively referred to as °PARTIES" or individually as "PARTY." RECITALS: The 1986 Water Quality Control Plan for the San Francisco Bay (Basin Plan), adopted by the California Regional Water Quality Control Board, San Francisco Bay Region, in implementation of the Federal Clean Water Act, required that PARTIES develop a program to control pollution from urban runoff, or nonpoint sources of water pollution in the Santa Clara Valley. In furtherance of their responsibilities pursuant to the Basin Plan, the PARTIES have previously entered into a series of agreements to jointly fund the cost of preparing an action plan to evaluate nonpoint source pollutants, monitor identified pollutants, and develop control measures to mitigate or reduce nonpoint source pollution. Collectively, the measures undertaken pursuant to the previous agreements and anticipated to continue pursuant to this Agreement, were known as the Santa Clara Valley Nonpoint Source Pollution Control Program and upon execution of this agreement henceforth shall be known as the Santa Clara Valley Urban Runoff Pollution Prevention Program (hereinafter called uProgram"). In 1987 Congress added Section 402 (p) to the Federal Clean Water Act (CWA) (33 U.S.C. Section 1342 (p)), which requires certain municipalities and industrial facilities to obtain a National Pollutant Discharge Elimination System (NPDES) permit for the 76075_4 MOA JRG:MGD 10/19/99 SCVURPPP MEMORANDUM OF AGREEMENT Page 2 of 13 discharge of stormwater to navigable waters. NPDES permits are also required under Section 402 (p) for any stormwater discharge which the Federal Environmental Protection Agency (EPA) or a State has determined contributes to a violation of a water quality standard or is a significant contributor of pollutants to surface waters. Section 402 (p) further required EPA to promulgate regulations for initial NPDES permit applications for stormwater discharges. The EPA promulgated such regulations in November 1990. The EPA has delegated authority to the California State Water Resources Control Board (SWRCB) to administer the NPDES permit process within California and, in turn, the SWRCB has delegated authority to the California Regional Water Quality Control Board - San Francisco Bay Region (RWQCB-SFBR) to administer the NPDES permit process within its region. Pursuant to Section 402 (p) of the CWA and EPA regulations, the RWQCB-SFBR adopted the following orders further defining the program that the PARTIES are to develop and implement: 1. Order No. 90-094 (NPDES Permit No. CA0029718), adopted June 20,1990; and 2. Order No 95-180 (NPDES Permit No. CAS029718); adopted August 23, 1995. In and for the mutual interest of the PARTIES, the PARTIES wish to continue the Program by entering into this Agreement for the purpose of ensuring continued participation, in terms of cost and administrative responsibilities. DISTRICT is a local public agency of the State of California duly organized and existing within the County of Santa Clara. The County of Santa Clara is a political subdivision of the State of California. All other PARTIES are municipal corporations, duly organized and existing under the laws of the State of California. The RWQCB-SFBR is conducting a Watershed Management Initiative (WMI) in Santa Clara County. The Program is required, as part of its NPDES permit, to develop and implement a Watershed Management Measures Strategy. The Urban Runoff Management Plan of the Program contains the Program’s Watershed Management Measures Strategy. This strategy, consistent with the NPDES permit, coordinates Program activities with the WMI to develop and implement cost-effective approaches to address specific urban runoff pollution problems. The Program, through a continuous improvement process, annually reviews the strategy. 76075 4 MOA JRG:MGD 10/19/99 SCVURPPP MEMORANDUM OF AGREEMENT Page 3 of 13 NOW, THEREFORE, THE PARTIES HERETO FURTHER AGREE, AS FOLLOWS: Section 1. Santa Clara Valley Urban Runoff Pollution Prevention Proqram 1.01 The Santa Clara Valley Nonpoint Source Pollution Control Program ("Program") is hereby continued as the Santa Clara Valley Urban Runoff Pollution Prevention Program to fulfill the requirements of NPDES Permit No. CAS029718 as it exists, may be modified, or may be reissued in the future (hereinafter referred to as "NPDES Permit"). 1.02 The Program is a collective effort and implementation of area-wide activities, designed to benefit all PARTIES. Section 2. Mana.qement Committee 2.01 A Management Committee is hereby reconstituted to provide for overall Program coordination, review, and budget oversight, with respect to the NPDES Permit. 2.02 The Management Committee may as necessary adopt and revise Bylaws for its governance. 2.03 The Management Committee is the official management and oversight body of the Program. The Management Committee shall direct and guide the Program and review and approve the Program Budget. The Management Committee shall consider permit compliance, including benefit to a majority of the PARTIES, as a primary objective in approving Program tasks and corresponding budgets. 2.04 The Management Committee may periodically re-evaluate and make recommendations to the PARTIES concerning reallocation of the proportion of the annual Program contribution that each PARTY shall pay. 2.05 The voting membership of the Management Committee shall consist of one designated voting representative from each PAR’FY. An alternative voting representative may be appointed by each PARTY. The RWQCB- SFBR may appoint a non - voting representative and alternate to the Management Committee. 2.06 A quorum of the Management Committee shall be achieved when at least nine (9) voting representatives, including at least one (1) representative from each of City of San Jose and Santa Clara Valley Water District, are present at any Management Committee meeting. 2.07 Meetings of the Management Committee, including any closed sessions with Program Legal Counsel, shall be conducted in accordance with the "Brown Act" 76075__4 MOA JRG:MGD 10/19/99 SCVURPPP MEMORANDUM OFAGREEMENT Page4 of 13 (Government Code Section 54950 et seq.) The individual parties have differing opinions on whether the Brown Act legally should be interpreted as applying to members of the Management Committee. In executing this Agreement, the parties do not waive their right to take the position that the Brown Act legally does not apply, but voluntarily agree to follow Brown Act procedures for Management Committee meetings. Except for official meetings of the Management Committee, nothing herein shall be interpreted to require meetings between staff members of the individual Parties (including designated representatives of the Parties) to be subject to the Brown Act, where the Brown Act would not otherwise apply. Each party is individually responsible for ensuring that it complies with the Brown Act. 2.08 The affirmative vote of at least eight (8) voting members of the Management Committee, which collectively contribute at least fifty percent (50%) of the area-wide Program costs (a °Majority Vote"), is necessary to approve any measure brought before the Management Committee. 2.09 The Management Committee shall be responsible for selecting any consultant(s) or contractor(s) who are to be paid from Program funds (°Outside Contractors"), using a process approved by the Contracting Agent, and for reviewing and approving any contracts with Outside Contractors, including the scope(s) of work, schedules of performance, use of subcontractors, and compensation for such Outside Contractors. 2.10 The Management Committee shall select a PARTY or Outside Contractor to act as Program Manager for the Program. The Program Manager shall be responsible for Program management and administration, Permit management, and technical program management all in accordance with the NPDES Permit, this Agreement, Program Bylaws, and as directed by the Management Committee in the best interest of the PARTIES as a whole and individually. The Program Manager shall be paid, from Program funds in accordance with the adopted Program budget, for providing the services described hereunder. The Program Manager shall not be responsible for providing program management services related to individual PARTIES permit programs, but may provide such services under separate contract with any PARTY or PARTIES. 2.11 The Management Committee may select an attorney (Program Attorney) or firm that is experienced with the Clean Water Act and Municipal Stormwater NPDES Permits to provide legal advice to the Management Committee on all matters involving administration of the Program’s NPDES permit and such other matters upon which the Management Committee may seek legal advice or request legal representation. Program Legal Counsel shall not be responsible for providing legal advice related to permit compliance to individual PARTIES, but may provide such services under separate contract with any PARTY or PARTIES. The Program Manager may 76075_4 MOA JRG:MGD 10/19/99 SC VURPPP MEMORA NDUM OF A GREEMENT Page 5 of 13 assist in coordination of activities with the Program Attorney but shall not give direction without prior authorization from the Management Committee. 2.12 The Management Committee shall establish timelines and budgets for completion of Program tasks. The Management Committee shall rate the performance of the Program, and in turn rate the performance of the Program Manager, based upon the Program’s ability to meet such approved timelines and budgets. 2.13 The Management Committee, through its Bylaws, may establish procedures for tracking, accounting for, and auditing the Program Fund. Section 3.Proqram Budqet 3.01 A collective budget for the Program (Program Budget) shall be based upon a projection of two consecutive fiscal year cycles, however, the Budget shall be adopted for only one fiscal year cycle. The Budget shall include a Contingency/Reserve Fund which shall not exceed ten percent (10%) of the operating costs of the adopted Budget. 3.02 The PARTIES shall each pay a yearly assessment into a fund established for Program operations for their assigned portion of the Program Budget. The proportionate share of the Program Budget that each PARTY shall pay is shown in the schedule marked Exhibit A hereto and incorporated by reference herein. 3.03 Except as provided in Section 6.03, the ending fund balance at the close of each fiscal year shall be disbursed annually to the PARTIES, or credited to the PARTIES’ share of the next fiscal year’s costs, in accordance with the PARTIES defined participation rates, as requested by each PARTY. Section 4.Contractinql Fiscal Aqent 4.01 DISTRICT shall serve as the initial Contracting/Fiscal Agent for the Program. 4.02 DISTRICT may withdraw as the Contracting Fiscal Agent upon the provision of ninety days (90) days written notice to the Management Committee. 4.03 In the event that the Contracting/Fiscal Agent withdraws from the Program or from providing Contracting/Fiscal Agent services to the Program, another PARTY may serve as a successor Contracting/Fiscal Agent. Any PARTY willing to serve as successor Contracting/Fiscal Agent may be nominated by another PARTY. Selection of a Contracting/Fiscal Agent must be by majority vote of the Management Committee. 76075_4 MOA JRG:MGD 10/19/99 SCVURPPP MEMORANDUM OF AGREEMENT Page 6 of 13 4.04 The Contracting!Fiscal Agent shall act in a reasonable amount of time to execute contracts with Outside Contractors, including the Program Manager, which have been requested and approved by the Management Committee. 4.05 The Contracting/Fiscal Agent shall be the treasurer of Program funds. The Contracting/Fiscal Agent, in accordance with generally accepted accounting procedures, shall keep the Program funds segregated from any other funds administered by the Contracting/Fiscal Agent; shall credit the Program with appropriate interest income earned on Program funds in each fiscal year; and shall not expend any funds except in accordance with the annual budget approved by the Management Committee or as otherwise directed by the Management Committee. 4.06 The Contracting/Fiscal Agent shall provide a copy of any contract executed on behalf of the Program to any PARTY or person designated by any PARTY or the Management Committee upon request. The governing body of the Contracting/Fiscal Agent, at its discretion, may delegate authority to execute agreements and contracts approved by the Management Committee, to a designated employee. Notice of any such delegation of authority shall be provided to the Management Committee. 4.07 The Contracting/Fiscal Agent may request, as part of the annual Program Budget, reimbursement for reasonable and customary costs incurred in providing the services described hereunder. Reimbursement to the Contracting/Fiscal Agent shall be subject to Management Committee review and approval as part of the Program Budget. Section 5.Ancillary Ri,qhts and Duties of the Parties 5.01 In addition to the participation in the Management Committee, the PARTIES accept and agree to perform the following duties: 1.Each will comply with the NPDES Permit conditions set forth in its Community-Specific plan; 2.Each will participate in Management Committee meetings and other required meetings of the PARTIES; Each will implement its Community-Specific program; Each will provide certain agreed upon reports to the Program for purposes of reporting, on a joint basis, compliance with applicable provisions of the NPDES Permit and the status of Program 76075_4 MOA JRG:MGD 10/19/99 SCVURPPP MEMORANDUM OF AGREEMENT Page 7 of 13 implementation; and Each will individually address inter-agency issues, agreements or other cooperative efforts. 5.02 This Agreement does not restrict the PARTIES from the ability to individually (or collectively) request NPDES Permit modifications andlor initiate NPDES Permit appeals for permit provisions to the extent that a provision affects an individual party (or group of PARTIES); however, any such PARTY (or PARTIES) shall make reasonable efforts to provide advance notice of their action to the other PARTIES and allow them to comment upon or join in their action before proceeding. Section 6.Term of Aqreement 6.01 The term of this Agreement shall commence on the date the last duly authorized representative of the PARTIES executes it. 6.02 This Agreement shall have a term of five (5) years. 6.03 Any PARTY may terminate its participation in this Agreement by giving the Chair of the Management Committee at least thirty (30) day written notice. The terminating PARTY will bear the full responsibility for its compliance with the NPDES Permit commencing on the date it terminates its participation, including its compliance with both Community-Specific and Program-wide responsibilities. Unless the termination is scheduled to be effective at the close of the fiscal year in which the notice is given, termination shall constitute forfeiture of all of the terminating PARTY’s share of the Program Budget, for the fiscal year in which the termination occurred (both paid and obligated but unpaid amounts). In addition, unless notice of termination is provided at least ninety (90) days prior to the date established by the Management Committee for approval of the budget for the succeeding fiscal year, termination shall constitute forfeiture of all of the terminating PARTY’s share of any unexpended, unencumbered funds remaining from all previous fiscal years. The cost allocations for the remaining PARTIES’ may be recalculated for the following fiscal year by the PARTIES without the withdrawing PARTY’s participation. Section 7.General Leqal Provisions 7.01. This Agreement supersedes any prior agreement among all the PARTIES regarding the Program, but does not supersede any other agreements between any of the PARTIES. 7.02 This Agreement may be amended by unanimous written agreement of the PARTIES. All PARTIES agree to bring any proposed amendment to this Agreement to their Council or Board, as applicable, within three (3) months following acceptance by the Management Committee. 76075_4 MOA JRG:MGD 10/19!99 SCVURPPP MEMORANDUM OF AGREEMENT Page 8 of 13 7.03 This Agreement may be executed and delivered in any number of copies ("counterpart") by the PARTIES, including by means of facsimile. When each PARTY has signed and delivered at least one counterpart to the Program, each counterpart shall be deemed an original and, taken together, shall constitute one and the same Agreement, which shall be binding and effective as to the PARTIES hereto. 7.04 No PARTY shall, by entering into this Agreement, participating in the Management Committee, or agreeing to serve as Fiscal Agent, Contracting Agent, Program Manager, and/or Legal Counsel, assume or be deemed to assume responsibility for any other PARTY in complying with the requirements of the NPDES Permit. This Agreement is intended solely for the convenience and benefit of the PARTIES hereto and shall not be deemed to be for the benefit of any third party and may not be enforced by any third party, including, but not limited to, the EPA, the SWRCB, and the RWQCB-SFBR, or any person acting on their behalf or in their stead. 7.05 In lieu of and notwithstanding the pro rata risk allocation which might otherwise be imposed between the PARTIES pursuant to Government Code Section 895.6, the PARTIES agree that all losses or liabilities incurred by a PARTY shall not be shared pro rata but instead the PARTIES agree that pursuant to the Government Code Section 895.4, each of the PARTIES hereto shall fully defend, indemnify and hold harmless each of the other PARTIES from any claim, expense or cost, damage or liability imposed for injury (as defined by Government Code Section 810.8) occurring by reason of the negligent acts of omissions or willful misconduct of the indemnifying PARTY, its officers agents or employees, under or in connection with or arising from any work, authority or jurisdictions delegated to such PARTY under this Agreement, including but not limited to any non-compliance by a PARTY with its obligations under the Program NPDES Permit. No PARTY, nor any officer, board member, employee or agent thereof shall be responsible for any damageor liability incurred by reason of the negligent acts or omissions or willful misconduct of the. other parties hereto, their officers, board members, employees or agents under or in connection with or arising from any work, authority or jurisdictions delegated to such PARTY under this Agreement, including but not limited to any non-compliance by a PARTY with its obligations under the Program NPDES Permit. 7.06 In the event that suit shall be brought by either party to this contract, the Parties agree that venue shall be exclusively vested in the state courts of the County of Santa Clara, or where otherwise appropriate, exclusively in the United States District Court, Northern District of California, San Jose, California. /// 76075_4 MOA JRG:MGD 10/19/99 SCVURPPP MEMORANDUM OF AGREEMENT Page 9 of 13 IN WITNESS WHEREOF, the PARTIES hereto have executed this Agreement as of the dates shown below. SANTA CLARA VALLEY WATER DISTRICT, a body corporate and politic of the State of California Date:APPROVED AS TO FORM: By: ........... Chair, Board of Directors By: General Counsel ATTEST: By:Date: General Manager By: COUNTY OF SANTA CLARA, a public entity of the State of California Date:APPROVED AS TO FORM: By: Chair, Board of Supervisors By:, Deputy County Counsel ATTEST: Date: By: Date: .... By: Name:. Title: APPROVED AS TO FORM: By:CO. Name" ~ ~ ~.w v,.), r2,4 Title: .S~_,q ~’o~- A-.s~. %L+~! MOA 10-28-99.doc JRG:MGD 10/19/99 SCVUtRPPP MEMC_ #ANDUM OF AGREEMENT Page I0 of I3 Date: CITY OF APPROVED AS TO FORM: By: Name : Title: By: Name: Title: Date: CITY OF APPROVED AS TO FORM: By: Name: Title: By: Name: Title: CITY OF Date: By: Name: Title: FORM: By: Name: Title: Date: CITY OF APPROVED AS TO FORM: By: Name: Title: By: Name l Title: MOA 10-28-99.doc JRG:MGD 10/I9/99 SCVURPPP MEMC. ,,4NDUM OF AGREEMENT Page 11 of ~3 CITY OF Date: By: Name: Title: CITY OF Date: By: Name: Title: CITY OF Date: By: Name: Title: CITY OF Date: By: Name: Title: APPROVED AS TO FORM: By: Name: Title: APPROVED ASTO FORM By: Name: Title: APPROVED AS TO FORM: By: Name: Title: APPROVED AS TO FORM: By: Name: Title: MOA !0-28-99.doc JRG:MGD 10/19/99 SCVURPPP MEML ’~NDUM OF AGREEMENT ~"Page 12 of 13 Date: CIW OF APPROVED AS TO FORM: By: Name: Title: By: Name: Title: Date: CITY OF APPROVED AS TO FORM By: Name: Title: By: Name: Title: Date: CITY OF APPROVED AS TO FORM: By: Name: Title: CITY OF Date: By: Name: Title: APPROVED AS TO FORM: By: Name: Title: By: Name: Title: MOA 10-28-99.d0c JRG:MGD 10/I 9/99 SCVURPPP MEMORANDUM OF AGREEMENT Page 13 of 13 EXHIBIT A SANTA CLARA VALLEY URBAN RUNOFF POLLUTION PREVENTION PROGRAM SCHEDULE OF COST-SHARING PROPORTIONS Jurisdiction Proportional Share Campbell 1.88% Cupertino 2.46% Los Altos 1.59% Los Altos Hills 0.43% Los Gatos 1.74% Milpitas 2.75% Monte Sereno 0.14% Mountain View 3.91% Palo Alto 4.06% Santa Clara 6.23% Saratoga 1.59% Sunnyvale 7.25% Santa Clara County 5.94% Subtotal 39.97% San Jose 30.01% District 30.02% TOTAL 100,00% 76075_4 MOA JRG:MGD 10/19/99 Appendix 2 First Amendment to A~eement Providing For Implementation of the Santa Clara Valley Urban Runoff Pollution Prevention Program as fully executed as of March 10, 2005 s~2050445 FIRST AMENDMENT TO AGREEMENT PROVIDING FOR IMPLEMENTATION OF THE SANTA CLARA VALLEY URBAN RUNOFF POLLUTION PREVENTION PROGRAM This first amendment to Agreement providing for implementation of the Santa Clara Valley Urban Runoff Pollution Prevention Program (THE "Amendment") is entered into by and between the SANTA CLARA VALLEY WATER DISTRICT, a local public agency of the State of California ("District"); CITY OF CAMPBELL, a municipal corporation of the State of California; CITY OF CUPERTINO, a municipal corporation of the State of California; CITY OF LOS ALTOS~ a municipal corporation of the State of California; TOWN OF LOS ALTOS HILLS, a municipal corporation of the State of California; TOWN OF LOS GATOS, a municipal corporation of the State of California; CITY OF MILPITAS, a municipal corporation of the State of California; CITY OF MONTE SERENO, a municipal corporation of the State of California; CITY OF MOUNTAIN VIEW, a municipal corporation of the State of California; CITY OF PALO ALTO, a municipal corporation of the State of California; CITY OF SARATOGA, a municipal corporation of the State of California; CITY OF SAN JOSE, a municipal corporation of the State of California; CITY OF SANTA CLARA, a municipal corporation of the State of California; CITY OF SUNNYVALE, a municipal corporation of the State of California; and COUNTY OF SANTA CLARA, a municipal corporation of the State of California. All of the above mentioned entities are hereinafter collectively referred to as "Parties" or individually as "Party." RECITALS A. The Parties previously entered into that certain Agreement Providing For Implementation of the Santa Clara Valley Urban Runoff Pollution Prevention Program (the "Agreement" or "MOA") pursuant to which the Parties established certain terms and conditions relating to the implementation and oversight of the Santa Clara Valley Urban Runoff Pollution Prevention Program (the "Program"). A copy of the agreement is attached hereto as Appendix A. Unless otherwise set forth herein, all terms shall have the meaning set forth in the Agreement; B. The Agreement provided for a five-year term, which, based on its execution, is currently set to conclude on or about March 10, 2005; C. The Parties expect to utilize the Program to submit a reapplication for the NPDES Permit in early 2005 and to otherwise address a variety of matters related to assisting the Parties in effectuating compliance with the Permit after March 10, 2005; D.The Parties therefore desire to extend the term of the MOA as set forth below; E Section 7.02 of the MOA provides that it may be amended by the unanimous written agreement of the Parties and that all Parties agree to bring any proposed amendments to their Council or Board, as applicable, within three (3) months following acceptance by the Management Committee; and NOW, THEREFORE, THE PARTIES HERETO FURTHER AGREE AS FOLLOWS: Section 6. Section 6.02 of the Agreement is hereby amended as follows: 6.02.01 This Agreement shall continue in full force and effect for an additional one year beyond its original termination date of March 10, 2005, unless otherwise terminated by the Parties in accordance with Section 6.03. Section 2. Section 2.04 of the Agreement is hereby amended as follows: 2.04.01 The Program shall conduct an independent review by December 31, 2005 to evaluate the MOA’s cost allocation formula and evaluate the term, scope and cost of the Program MQA. 2 IN WITNESS WHEREOF, The Parties have executed this Amendment effective as of March 10, 2005. Santa Clara Valley Water District. County of Santa Clara: City of Palo Alto By: Name: Title: Date: By: Name: Title: Date: Name:~-r~.m. Burch ..... Title:Have r Date:H.arch 10, 2005 3 ATTACH~’ENT B SANTA CLARA VALLEY URBAN RUNOFF POLLUTION PREVENTION PROGRAM REVIEW OF MEMORANDUM OF AGREEMENT HILTON FARNKOPF & HOBSON, LLC November 23, 2005 FINAL REPORT Urban Runoff Pollution Prevention P ,EVIEW OF MEMORANDUM OF AGREEMENT FINAL REPORT November 23, 2005 HILTON FARNKOPF & HOBSON, LLC 2175 North California Blvd., Suite 990 Walnut Creek, CA 94596 Tel: (925) 977-6950 Fax: (925) 977-6955 ~HILTON FARNKOPF & HOBSON, LLC Advisory Services to ~_W Municip~al Management Northern California Southern California 2175 N. California Boulevard, Suite 990 Walnut Creek, California 94596 Telephone: 925 / 977-6950 Fax: 925 / 977-6955 www.h.&-consultants.com Robert D. Hilton, CMC John W. Farnkopf, PE Laith B. Ezzet, CMC November 23, 2005 Mr. Adam Olivieri, Dr.PH., P.E. Santa Clara Valley Urban Runoff Pollution Prevention Program 1410 Jackson Street Oakland, CA 94612 Subject:Final Report: Review of Memorandum of Agreement Hilton Farnkopf & Hobson, LLC, is pleased to submit this Final Report that reflects the BATG discussions at their November 1, 2005 meeting, the City/County Managers’ discussion at their November 9, 2005 meeting, and written comments received from various Co-permittees. The report compares the Santa Clara Valley Urban Runoff Pollution Program with other similar programs in the areas of cost allocations, the term of its Memorandum of Agreement, Program scope and management, and Program Costs. Our findings are described in the report; key reference documents are provided in a separately submitted appendix. Good luck with renewal of the MOA. If we can be of further assistance, please do not hesitate to contact me. Very truly yours, HILTON FARNKOPF & HOBSON, LLC ~nior Vice PreSident Santa CIara Valiey Urban Ranqfif PolI’a.tio’,~ Prevention Program Final Report TABLE OF CONTENTS EXECUTIVE SUMMARY .......................................................................................................2 Purpose and Scope ...............................................................................................................2 Approach ..............................................................................................................................2 Summary of Findings ..........................................................................................................2 COST ALLOCATIONS ..........................................................................................................4 Comparison of Programs .....................................................................................................4 Findings ................................................................................................................................5 The 1987 Methodology .....................................................................................................5 Other Methodologies .......................................................................................................8 TERM OF MEMORANDUM OF AGREEMENT .............................................................15 Comparison of Programs ...................................................................................................15 Findings ..............................................................................................................................15 SCOPE OF PROGRAM ........................................................................................................16 Comparison of Programs ...................................................................................................16 Findings ..............................................................................................................................17 COST OF PROGRAM ..........................................................................................................20 Comparison of Programs ...................................................................................................20 Findings ..............................................................................................................................22 APPENDIX (submitted separately) SCVURPPP - First Amended Agreement, Work Plan ACCWP - Agreement, Budget CCCWP- Agreement with budget OCSWP- Agreement SDRSC- Agreement STOPPP- Agreement, Budget SCVWD - Cost Allocation Study Budget Comparison Hilton Farnkopf & Hobson, LLC i November 23, 2005 Sm~ta Clara Valley Urban Rw~q~.PolIution Prevention Program Final Report TABLE OF FIGURES Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure 1. Characteristics Of Surveyed Programs .................................................................3 2. Types Of Allocation Formulae Used By Programs ............................................10 3. Comparison Of Cost Allocations .........................................................................11 4. 1987 Allocation Methodology And Variations ...................................................12 5. Allocation Percentages Based On Population And Surface Area .....................12 6. Budget Allocations Based On Population And Surface Area ............................13 7. Comparison Of MOA Terms ................................................................................15 8. Comparison Of Program Scopes ..........................................................................18 9. Comparison Of Voting ..........................................................................................19 10. Comparison Of Budgets By Category ...............................................................22 11. Comparison Of Benchmarks ..............................................................................23 12. Comparison Of Indexed Benchmarks ...............................................................24 13. Historic SCVURPPP Budget By Category .........................................................24 14. Historic SCVURPPP Costs ..................................................................................25 ACRONYMS ACCWP - Alameda Countywide Clean Water Program ACFCWCD - Alameda County Flood Control and Water Conservation District C/CAG - City/County Association of Governments (San Mateo) CCCWP - Contra Costa Clean Water Program MHI - Median Household Income MOA - Memorandum of Agreement, which in some cases may be a Memoranda of Understanding NPDES - National Pollution Discharge Elimination System OCSWP - Orange County Storm Water Program OCFCD - Orange County Flood Control District SCVURPPP - Santa Clara Valley Urban Runoff Pollution Prevention Program SCVWD - Santa Clara Valley Water District SDRSC - San Diego Re~onal Stormwater Co-permittees SDUPD - San Diego Unified Port District STOPPP - Stormwater Pollution Prevention Program (San Mateo) Hilton Farnkopf & Hobson, LLC ii November 23, 2005 Santa Clara Valley Urban Ru’,wff PolIutio’~ Prevention Program Final Report ACKNOWLED GEMENTS This report was prepared by the following HF&H Project Staff: John Farnkopf, P.E., Senior Vice President, I-IF&H, LLC Yen Tieu, Assistant Consultant, HF&H, LLC Kim Erwin, Production Coordinator, HF&H, LLC HF&H gratefully acknowledges the assistance of the following agency staff and consultants: SCVURPPP Budget Ad Hoc Technical Group - Lorrie Gervin (Chair), Randy Shipes, David Chesterman, Rick Mauck, Joe Teresi, Cheri Donnelly, Darryl Wong Bob Davidson, San Mateo Stormwater Pollution Prevention Program Michelle McCauley, Contra Costa Clean Water Program Larry McKermey, Orange County Storm Water Program Adam Olivieri, Eisenberg, Olivieri & Associates Jim Scardin, Alameda Countywide Clean Water Program Jon Van Rhyn, San Diego Regional Stormwater Co-permittees Hilton Farnkopf & Hobson, LLC iii November 23, 2005 Sa’,~ta CIa.ra Valley Urban Runoff PoIiution Prevention Program Final Report REVIEW OF MEMORANDUM OF AGREEMENT Executive Summary Cost Allocations Term of Memorandum of Agreement Scope of Program Cost of Program Hilton Farnkopf & Hobson, LLC 1 November 23, 2005 Santa Clara Valley Urban Runof]:PoIh~.tion Prevention Program Final Report Executive Summa~3/ EXECUTIVE SUMMARY PURPOSE AND SCOPE The purpose of this project is to provide technical assistance to the Management Committee of the Santa Clara Valley Urban Runoff Pollution Prevention Program. The scope of services calls for collecting data that allows the Management Committee to conduct a review of four topics: 1.The formula used for allocating the Program costs among the Co-permittees. 2.The term of the Memorandum of Agreement that binds the 15 Co-permittees. 3.The scope of the Program. 4.The cost of the Program. The evaluation of these topics is described in this report; a separate appendix contains copies of key documents such as program MOAs and budgets. APPROACH Legal documents such as memoranda of agreement or joint powers of authority agreements were collected for each of the six programs shown in Figure 1. All programs include at least one county agency in addition to cities, which comprise the majority of members. SCVURPPP has the fewest number of member agencies of the six programs. San Mateo is noteworthy because it includes two transit agencies as ex o,~cio members, which reflects the fact that this pro~am deals with transit and other services in addition to stormwater. San Diego’s Program includes the Port. SCV-UT~PPP’s population is slightly below the 1.8 million average for the six programs. For those programs in the Bay Area, budgets were also collected to make cost comparisons. SUMMARY OF FINDINGS Our findings for each of the four topics are as follows: Cost Allocations. It appears that the allocation between the SCVWD and other Co- permittees was based on a 1987 study; the allocations among the other Co-permittees were based on runoff factors. Variations on the 1987 methodology were examined to study the sensitivity of the allocations to the assumptions. The resulting allocations to the District ranged from 20% to 33%. Hilton Farnkopf & Hobson, LLC 2 November 23, 2005 Santa Clara Valley Urban RunofflPolIution Prevention Program Fina! Report Executive S~:mma77 When SCVURPPP’s current cost allocations are compared with formulae using measures of benefit used by other programs, they approximate the allocations that rely on the average of surface area and population. The analysis is sensitive to the surface area that is assumed for the SCVWD. Here, the District has proposed values of 10% or less based on the land it controls. The example analyses result in allocations over 20% based either on total land within the Program or land with runoff tributary to San Francisco Bay (i.e., net of runoff that is recharged). Term of Memorandum of Agreement. SCVURPPP’s Memorandum of Agreement has a specific termination date that, in theory, has been established to coincide with the term for its discharge permit. This approach has led to administrative complexity. One of the surveyed programs has no specific date for the term of its MOA. Instead, the term of the MOA extends six months beyond the term of the discharge permit, whatever that may be. Scope of the Program. Based on a comparison of the programs’ M©As, SCVURPPP’s Program, consistent with the MOA’s requirements, is more rigorously managed than any of the other programs surveyed. SCVURPPP has management controls, self-audit procedures, budget monitoring and reporting requirements not found in any of the other programs. Cost of the Program. Based on various benchmark comparisons, the SCVURPPP program is in line with other Bay Area program budgets. This is particularly noteworthy because it is the most heavily scrutinized (e.g., two State/Federal audits of Program and Co-permittee activities in the past two years) and exercises the strongest management practices. 1. Characteristics of Surve~ s~,,,6.090 I s2,~7.000 I s2.~e4.009I s~.~94.000!s6.000.0001 s6.g6,.ooo ,657,482 (program only)1 ~,461,000 !1,001,100 I 697,500 t 2,900,000 !2,930,000 951 (prog .....,y)I 664 (program only)~720 (Co~nW/program)427 (pro~ .....’y) !789 (Count)!4200 (CounW) 1,743 ~2,200 !1,3£0 I 1,635 I 3,676 ~698 Hilton Farnkopf & Hobson, LLC 3 November 23, 2005 Santa Clara Valley Urban RunoffPolh~.tion Prevention Program Final Report Cost Allocations COST ALLOCATIONS COMPARISON OF PROGRAMS Cost allocations can be generally categorized into four types: ¯Proportionate allocations - Costs that are related to each member in proportion to some measure of size could be allocated proportionately. Common examples related to stormwater allocations are population, which is related to pollutant production, and surface area, which is related to the quantity of stormwater. ¯Assigned allocations - Members can receive minimum, maximum, or other allocations that are deemed reasonable. Such assignments typically have very little, if any, formulaic or quantitative basis and may be entirely judgmental. These assigTwnents are intended to balance qualitative factors that are not reflected in other types of allocations. °Direct allocations - Specific costs that correspond to the needs of individual members are only allocated to those members and not pooled for allocation among all members. An example would be a study concerned with a specific member or subset of members would be allocated to only that member or subset of members. Equal allocations - Costs that benefit all members equally (regardless of measures of size such as population or surface area) could be allocated in equal amounts. An example would be legal expenses, of which 1/nth share would be allocated to each member of a group of n members. Each of these types of allocations is present in one or more of the programs as surmnarized in Figure 2. Figure 2 shows what portion of the total costs are allocated by each type of allocation. Each program is different but some generalizations can be inferred from the sample of programs in Figure 2. 2. 3. 4. All of the programs use a form of proportionate allocation to allocate the majority of costs. Population and surface area are common measures used for proportionate allocations. The use of population is involved in all of the al!ocations, sometimes for all costs or in combination with surface area or another type of allocation1. The use of surface area is almost as common as population. Surface area is combined with population and never used alone. Hilton Farnkopf & Hobson, LLC 4 November 23, 2005 Santa Clara Valley Urban Runoff Pollution Prevention Program Final Report Cost Allocations The most common form of proportionate allocation combines population and surface area. 6. Assigned allocations are not uncommon and tend to be small amounts. 7. Most of the programs’ MOAs contain specific provisions for allocating certain appropriate costs directly to specific members. 8.Equal allocations are uncommon. Only a small portion of costs are allocated equally. Figure 3 provides additional detail on the adjustments, excluded land, and update frequency. Figure 3 also shows the highest three allocations, which gives a quick means of comparing the overall results of each program’s allocations and adjustments. It can be seen that the Santa Clara and San Diego Programs are similar. Both allocate about 60% of their costs to two members. With the other four programs, there tends to be a gradual tapering off from the highest allocation. FINDINGS Not surprisingly, there is no single type of cost allocation that can be identified as an industry practice among the programs surveyed. Although there is some variety, the range is quite narrow. Generally, proportionate allocations based on both population and surface area are used to allocate the majority of costs. SCVURPPP’s allocation formula is not well documented but appears to depart somewhat from this generalization. The 1987 Methodology. A 1987 cost allocation study2 derived several allocations between the SCVWD and the other Co-permittees. The study recommended a 33%/67% allocation and also presents a 30%/70% variation as well as others. The District’s eventual allocation in Exhibit A to the MOA is 30.02%. The rationale for the allocations of the 70% among the other Co-permittees was not addressed in that study. The allocations among the SCVURPPP’s cities are also not well documented. Historical information provided by Mr. Joe Teresi indicates that the cost allocations have a common root: "proportional stormwater runoff from respective jurisdictions as computed for purposes of District’s Benefit Assessment Revenue Program." However, no documentation has been provided showing the derivation of the runoff factors. Figure 4 summarizes the methodology used in 1987 with some variations. In the 1987 methodology, four types of benefits were allocated between the SCVWD and other Co- permittees. Each of the benefits was also weighted to derive an overall weighted allocation. Each allocation and weighting is briefly described below, including some ~ Nonpoint Source Discharge Evaluation Cost Allocation Study. CH2M Hill. August 1987. Hilton Farnkopf & Hobson, LLC 5 November 23, 2005 Santa Clara Valley Urban Runof.fiPoIlutio’~ Prevention Program Final Report Cost Allocations "devil’s advocacy" commentary that is offered as a means of testing the assumptions in the 1987 methodology and to help in considering other allocations. Groundwater Protection. Groundwater protection "can be considered a benefit most directly accruing to the SCV-WD.’’3 The study goes on to say, "However, future water supplies directly benefit the ultimate users or the water consumers because it [sic] affects both the cost and availability of water to these consumers. Protecting future groundwater resources is therefore a benefit that is shared by the SCVWD and water users.’’4 It is true that the customer benefits from future water supplies. However, if the customers established the SCVWD to protect those water supplies on their behalves, it could be argued that the benefit should be allocated entirely to the SCVWD. On the other hand, perhaps it is felt that the District’s allocation should only reflect its flood control activities and that water supply protection is handled separately as part of the District’s water supply activities. In that case, the benefits of groundwater protection to the Co-permittees through SCVURPPP’s activities would be much less or nothing General Benefits. This benefit refers to "the benefits of cleaner water that affect the biological, recreational, and wildlife resources and the environment in general...,,s The 33% / 67% allocation implies that the SCVWD receives half the benefit that is received by all the other Co-permittees. It could be argued that these environmental benefits reflect terrestrial conditions, in which case the allocation should correlate with surface area (64.22% represents that portion of the County that drains to San Francisco Bay lying outside the urbanized city and County lands). Potential Liability. This benefit refers to exposure to enforcement action resulting from non-compliance. "The liability of non-complian,c,e with this requirement is assumed to be shared by stormwater management agencies. 6 A simple approach to sharing this qualitative responsibility is to allocate it equally in one-fifteenth shares to all Co- permittees. The 25%/75% allocation in the study implies that the SCVWD’s liability is significantly higher than the 6.7% average per Co-permittee. Informational Benefits. This benefit refers to the "additional water quality data" that will be generated by implementing the Action Plan. Because other types of data have also been compiled (which are available to all of the Co-permittees as wel! as to the program), this qualitative benefit could also be allocated equally among Co-permittees. Assuming that the assigned weightings contained in the 1987 model are still appropriate and should not be changed, the benefit to the District reflects only the allocations between the District and the other Co-permittees. For example, under the current benefit assumptions the District allocation is calculated at 30.01%. If the values were adjusted to 15% for all allocations between the District and the other Co- permittees, then the calculated overall weighted allocation would be 15%. Ibid., page A-1. Ibid., page A-1. Ibid., page A-1. Ibid., page A-1. Hilton Farnkopf & Hobson, LLC 6 November 23, 2005 Santa Clara Valley Urban Runqff PolIution Prevention Program Final Report Cost Allocations Variation 1 in Figure 4 shows an alternative allocation that occurs if all of the groundwater protection is allocated to the District, the general benefits are alig-ned with surface area, and potential liability and informational benefits are shared equally (holding the weightings constant). The result slightly increases the allocation to the SCVWD from 30.1% to 32.7%. Variation 2 shows the allocation if none of the groundwater protection benefits are allocated to the District and the other allocations are the same as in Variation I (again, holding the weightings constant). In this case, the allocation to the District is substantially reduced to 20.2%. The 1987 methodology is unique among the programs evaluated. The method was developed to address the differences between the SCVWD and the other Co-permittees: (1) the SCVWD does not have its own separate population as do the cities and County; (2) the SCVWD does not have its own service area. In dealing with those differences, the 1987 methodology introduced a set of parameters that rely on judgment alone. We see in two of the other programs (ACCWP and OCSWP) that allocation values were judgmentally assigned to their flood control districts and then proportionally distributed among the other members based on population and area. The 1% allocations to each of ACCWP’s two flood control and water conservation districts are token allocations. These districts serve relatively small portion of Alameda County. The 10% allocation to Orange County’s flood control district was negotiated. Its derivation is undocumented, although Orange County staff speculated that it may have been linked to funding provided by the flood control district at the time the allocations were originally negotiated. In the San Diego program, the County was allocated 30.2% through a formula that was applied equally to all Co-permittees, a formula that is substantially based on population and area. San Diego County provides general public works and flood control services and not water supply services. The allocation resembles SCVURPPP’s. In other programs (e.g., CCCWP and STOPPP) all members were treated no differently. It is our understanding that in San Mateo flood control is managed directly by each of the cities and thus is included within the city assessments. In Contra Costa, the County manages flood control and water supply is managed by other special districts. As evidenced by the above practices, a one-for-one comparison of allocation approaches between different programs is extremely difficult. The review of the various stormwater programs indicates that the range of allocations for program members that provide county-wide flood control services is 10% to 30%. Because the SCVWD’s authority and responsibility as the g-uardian of both surface water and groundwater (as well as their overall stream stewardship and watershed protection responsibilities) goes beyond the roles of the flood control and water conservation districts in the other Hilton Farnkopf & Hobson, LLC 7 November 23, 2005 Santa Clara Valley Urban Runof~;PolIution Prevention Program Final Report Cost Allocations programs, the allocation to the SCVWD should be larger than the allocation to a single- purpose flood control district. Other Methodologies An analysis of alternative allocations for SCVU-RPPP using population and surface area is presented in Figure 5A. The analysis compares the current percentage allocations in Exhibit A of SCVURPPP’s MOA with allocations that would result from using only surface area, only population, and the average of population and surface area. The area for the District was derived by subtracting the area attributable to the cities and estimated for the County from the Program’s total area. The County’s area was derived in proportion to population.7 The District has proposed a 10% allocation in keeping with the al!ocation assigned to the Orange County Flood Control District. As previously mentioned, this comparison does not reflect the fact that the SCVWD provides more than flood control services. A reduction from the current 30% to 10% raises the question of whether the 30% was ill- conceived or whether conditions changed markedly since 1987 that would warrant such a reduction. Shifting from 30% to an arbitrary 10% would seem to weaken the rationale for the District’s allocation unless it is possible to point to specific changes that justify reducing the District’s share by two-thirds. In the District’s November 10, 2005 written comments on the draft report, the District indicates that a 10% allocation can be justified on the basis of the amount of land that the District directly controls through fee title, easements, or permit jurisdiction. As we understand this comment, the District may not have also reduced the other Co- permittees" land to only the lands that they directly control through fee title, easements, or permit jurisdiction. If that is the case, the District may be comparing land it controls with not just the land controlled by the other Co-permittees, which would overstate the District’s percentage. If this adjustment were made so that all Co-permittees were treated equivalently, the allocation would be reduced to a subset of the land within the Program. This raises a question as to why the Program includes considerably more land than just the land under municipal control. It would seem that privately owned land (much of which is non-urban) should have some influence (if not the same proportionate influence as publicly owned land) in any land-based allocation formula. ~ The average allocation percentages in Figure 5A are closest to the percentages in Exhibit A, but increase the allocations to the City of San Jos~ and the SCVWD while decreasing 7 The assumption is that there is a correlation between population and surface area. The County’s population is 4.86% of the total Program population. The cities’ land is 324.5 sq. mis. 4.86% of this land is 15.8 sq. mis.. s One approach to identif%;ing land that should be included in allocating costs is to consider how revenue is generated from land for stormwater related purposes. Review of the District’s FY 2005/2006 annual budget indicates that the District collects revenue from several sources including property taxes and special parcel assessments on all land parcels / owners within the SCVURPPP boundary as well as from benefit assessment revenue from the various watersheds located within the SCVURPPP boundarv (District FY 2005/2006 Operating and Capital Budget). Most of this revenue is derived from privately o~ned urban~ and rural land. Hilton Farnkopf & Hobson, LLC 8 November 23, 2005 Santa Ctara Valley Urban Runoff Pollution Prevention Program Final Report Cost Allocations them to most of the other Co-permittees. Applying the allocation percentages in Figure 5A to SCVURPPP’s budget yields the amounts in Figure 6A. The resulting redistribution of costs is significant in most cases in both dollar amounts and percentages. An alternative to Figure 5A could adjust for the runoff that is recharged and is therefore not tributary to San Francisco Bay. According to the 1987 study, one-third of the runoff is recharged. Assuming that runoff correlates with surface area, one-third of the Program’s land could be deducted from the surface area. This alternative is shown in Figures 5B and 6B. The affect of this adjustment lowers the District’s allocation from 32.11% in Figure 5A to 23.17% in Figure 5B. Figure 6B shouts a $213,643 reduction to the District, a $379,778 increase to San Jos~, and a variety of mostly decreases to the other Co-permittees. In effect, San Jos~ is picking up not only the $231,643 reduction to the District, but another $165,135 reduction to most of the other Co-permittees. It might be argued that reducing the District’s allocation should not result in either a windfall or burden to any of the other Co-permittees. In other words, San Jos~ would pick up the $213,643 District reduction and all the other Co-permittees remain unchanged. The affect of this refinement is shown in Figure 6C. The result is a 6.85% increase and decrease to San Jos~ and the District, respectively, whereby San Jos~’s allocation shifts from 30.01% to 36.86% and the District’s allocation drops from 30.02% to 23.17%. Phasing in any major adjustment over a period of years to allow the Co-permittees that receive increased allocations to make budgetary accommodations is a valid consideration. If there is a reduction in the District’s share, the phasing in could, for example, fix the District’s allocation at its current level and allow the allocations to others increase as the SCVURPPP budget increases. Another approach would fix all allocations so that none decreased and any cost increases would be absorbed by only those Co-permittees whose allocations are shown to increase based on the formula. Other rates of phasing in could be adopted that would complete the phasing in over a set period of years. Hilton Farnkopf & Hobson, LLC 9 November 23, 2005 Santa Clara Valley Urban Runoff:Pollution Prevention ?reg,’am Final Report Cost Allocatfons Figure 2. Types of Allocation Formulae Used by,Programs Allocation Type SCVURPPP ACCWP CCCWP STOPPP OCSWP SDRSC Proportionate: Population Surface Area Average of Both Pop & Area Runoff Factors Other 7O% 30% [a] 100%100%45% 45% 98%90% Assigned 2%10% Direct [b][b][b][b] Equal 10% 100.00%100%100%100%100%100% [a] Based on the 1987 study, which considered water quatity protection, environmental benefits, non-compliance liability, and data development. [b] Specifically provided for in the MQA. Hilton Farnkopf & Hobson, LLC 10 November 23, 2005 Santa Clara Valley Urban Runof.fPollution Prevention Program Final Report Cost Allocations 3.)arison of Cost Allocations SCWYD share may be based on weighted parameters 10% ailocetad equally among all (general benefits, potential Co-permittees, 45% allocated in noncompliance groundwater Average of population and area. Population for ait Co-permittees. Population for all Co-permittees. Average of population and area.propo~on to population, 45% protection, informational !allocated in proportion to benefits). All other allocations I urbanized tend area. are based on runoff factors. Total Program costs allocated among Co-permittees based on Exhibit A of MOA General Program costs allocated among Co-permittees Total Program costs allocated based on fon’nula, individual i among Co-permi tees based On Program costs are directly i allocation formula. charged to individual members Totai C!CAG budcet allocated based On all allocation formute. Failure to pay results in loss of voting rights. Total Program casts allocated among Co-permittees based on allocation formula. Shared Regional Genera~Program costs are allocated among Co-permittees based on allocation formula. Watershed and other GeneraI Program costs may be allocated differently. Individual program costs are directly charged to individual members. Undocumented Dublin, Livermore, and Pieasanton shares are reduced by Zone 7’s 1% share; Fremont, Hayward, Newark, Oakland, San Leandro, and Union City shares are reduced by ACFCWCD’s 1% share. County population is based on unincorporated area. County area and population areUnspecifiedbased on unincorporated area. County population based on unincorporated area. Port population based on vessel residents within San Diego Bay. Urbanized area for Port includes only urbanized land within Port boundaries. Land in cities overlying Port is included Port. As Principal Permittee, County waives administration costs. II National forests, state parks,Land east of the County Water Open water and Bay wetlands;Not applicable.Not applicable airports, landfill, oceans,Authority service area notUndocumentednonurbenized County land.harbors, tidal bays and military thbutary to the ocean and not instaflations,served public water. Undocumented 1% minimum (applies to Zone 7 None. All allocations are based None. All allocations are based 10% to District, 90% to cities None. All allocations are based and ACFCWCD)on formula,on formula,and County.on formula. 30.62% * SCVWD 21.76% - Oakland 15.81% - County 14.65% - Daly city 15.34% - County 30.2% - County 30.01% - San Jose 15.96% - Fremont 12.62% - Concord 13.08% - San Marco 10.00% - OCFCD 29.8% - San Diego 7.25% - Sunnyvale 11.96% - County 10.30% - Richmond 10.66% - Redwood City 7.46% - Anaheim 4.9% - Chula Vista 6.23% - Santa Clara 11.05% - Hayward 9.85% - Antioch 8.66% - County 6.15% - Santa Ana 4.6% - Oceanside Unspecified Specified in bylaws.Annual At any time.Unspecified Unspecified Hilton Farnkopf & Hobson, LLC 11 November 23, 2005 Santa Clara Valley Urban Runoy~. PoIIution Prevention Program Final Report Cost Allocations Figure 4. 1987 Allocation Methodology and Variations 1987 Allocation Methodology Allocations Weighted Allocations Benefits SCVWD Others Weight SCVWD Others Groundwater protection 50.0%50.0%12.5%6.3%6.3% General benefits 33.0%67.0%25.0%8.3%16.8% Potential liability 25.0%75,0%50,0%12.5%37.5% Informational benefits 25.0%75.0%12.5%3.1%9.4% 100.0%30.1%69.9% Variation 1 - All Groundwater Benefits Allocated to District Allocations Weighted Allocations Benefits SCVWD Others Weight SCVWD Others Groundwater protection 100.0%0.0%12.5%12.5%0.0% General benefits 64.2%35.8%25,0%16.1%8.9% Potential liability 6.7%93.3%50.0%3.3%46.7% Informational benefits 6.7%93.3%12.5%0.8%11.7% I00.0%32.7%67.3% Variation 2 - No Groundwater Benefits Allocated to District Allocations Weighted Allocations Benefits SCVWD Others Weiqht SCVWD Others Groundwater protection 0.0%100.0%12.5%0.0%12.5% General benefits 64.2%35.8%25.0%16.1%8.9% Potential liability 6.7%93.3%50.0%3.3%46.7% Informational benefits 6.7%93.3%12.5%0.8%11.7% 100.0%20.2%79.8% Figure 5A. SCVURPPP Current Member Allocations Allocation Percentages Based on Population and Surface Area Surface Area Allocations Population Allocations Averaqe of Surface Area and Population AIIocatiions Compared Compared Compared Land Area With Current With Current Land Population With CurTent (sq, mL}Distribution Allocation Population Distribution Allocation Distribution Distributioin Avera,qe Allocation Campbell 1.88%6.0 0.63%-1.25%38,415 2.32%0.44%0.63%2.32%t.47%-0.41% Cupertino 2.46%10.4 %09%-1.37%53,452 3.22%0.76%1.09%3.22%2.16%-0,30% Los AItos 1.59%6.6 0.69%-0.90%27,614 1,67%0.08%0.69%1.67%1.18%43.41% Los Altos Hills 0.43%8.4 0.88%0.45%6,452 0.51%0.08%0.88%0.51%0.70%0.27% Los Gates 1.74%10.0 1.05%-0.69%26,976 t.75%0.01%1.05%1.75%1.40%-0.34% Milpitas 2.75%13.5 t.42%-1.33%64,998 3.92%1.17%1.42%3.92%2.67%-0.06% Monte Serano 0.14%1.5 0.16%0.02%3,505 0.21%0,07%0.16%0.21%0.18%0.04% Mountain View 3.91%12.3 1.29%-2.62%72,033 4.35%0.44%1.29%4.35%2.82%-1.09% Palo Aito 4.06%26.0 2.73%-1.33%61,674 3.72%-0.34%2.73%3.72%3.23%-0.83% San Jos~30.01%173.6 16.25%-11.76%844,857 57.00%26.99%18.25%57.00%37.63%7.62% Santa Clara 6.23%16.3 2.03%-4.20%109,106 6.58%0.35%2.03%6.56%4.31%-1.92% Saratoga 1.59%11.9 1.25%-0.34%30,850 1.88%0.27%1.25%1.85%1.56%-0.03% Sunnyvale 7.25%25.0 2.63%-4.62%133,086 8.03%0.78%2.63%8.03%5.33%-1.92% Santa Clara County 5.94%15.8 1.66%-4.28%60,564 4.86%-1.08%1.66%4.86%3.26%-2.68% SCVWD 30.02%610.8 64.22%3~ .20%0.00%-30.02%64.22%0.00%32.11%2.09% Total 100%951.1 100.00%0.00%1,657,582 100.00%0.00%100.00%100.00%100.00%0.00% Hilton Farnkopf & Hobson, LLC 12 November 23, 2005 Santa Clara Valley Urban Runqfif Pollution Prevention Program Final Report Cost Allocations Figure 6A.Budget Allocations Based on Population and Surface Area Average of Surface Area and Population Surface Area Allocations Population Allocations Allocations Current Allocations Allocations Allocations SCVURPPP Budget Based on Compared With Current Based on Compared With Current Based on Compared With Current Member Allocations Land Area Allocation Population Allocation Averages Allocation Campbell $58,618 S 19,669 $(38,949)-66%$72,26I $13,642 23%$45,965 S (12,653)-22% Cupertino S 76,703 $34,094 $(42,609)-56%$100,546 $23,843 31%$67.320 $(9,383)-12% Los Altos $49.576 $21,636 S (27,940)-56%$51,943 $2,367 5%$36,790 $(12,786)-26% Los Altos Hills $13,407 $27,537 $14,130 105%$15.899 $2,491 19%$21.718 $8,311 62% Los Gatos $54.253 $32,782 $(21,471)-40%$54.505 $252 0%$43,644 $(10,609)-20% Milpitas $85.745 $44,256 $(41,489)-48%$122.265 $36,520 43%$83,260 $(2.485)-3% Monte Sereno $4,365 $4,917 $552 13%$6,593 $2,228 51%$5,755 $1.390 32% Mountain View $121.914 $40,322 $(81,591)-67%$135,498 $13,584 11%$87,910 $(34.004)-28% PaloA~to $126,591 $85,234 $(41,357)-33%$ 116,012 $(10,579)-8%$ 100.623 $(25,968)-21% San Jos~$935,712 $569,103 $(366,609)-39%$ 1,777,326 $841,615 90%$ 1,173,214 $237,503 25% Santa Clara $194,251 $63,270 $(130,981)-67%$205,234 $10,983 6%$134,252 $(59,999)-31% Saratoga $49,576 $39.011 $(10,565)-21%$58.030 $8,454 17%$48.521 $(1,055)-2% Sunnyvale $226,055 $81,956 $(144,099)-64%$250,342 $24,287 11%$166,149 $(59,906)-27% Santa Clara County $ 185,209 $ 51,704 $(133,506)-72%$151,545 $(33,664)-18%$ 101,624 $(83,585)-45% SCVWD $ 936,024 $ 2.002,507 $ 1,066,484 114%$$(936,024)-100%$ 1,001,254 $ 65,230 7% Total $ 3,118,000 $ 3,118,000 $0%$ 3,118,000 $0%$ 3,118,000 $0 0% Current budget does not intrude 9ermit fee<~ Figure 5B. Allocation Percentages Based on Population and Surface Area (One-Third Reduction in Surface Area for Runoff that is Recharged) SCVURPPP Current Member Allocations Surface Area Allocations Population Allocations Averaqe of Surface Area and Population AIIocatiions Compared Compared Compared Land Area With Current With Current Land Population With Current (eq. mi.)Distribution Allocation Population Distribution Allocation Distribution Distributloin Average Allocation CampbetI 1.88%6.0 0.95%-0.93%38,415 2.32%0.44%0.95%2.32%1.63%-0.25% Cupertino 2.46%10.4 1.64%-0.82%53,452 3.22%0.76%1.64%3.22%2,43%-0,03% Los Altos 1.59%6,6 1.04%-0.55%27,614 i .67%0.08%1.04%i ,67%t.35%-0.24% Los Altos Hills 0.43%8.4 1.32%0.89%8,452 0.51%0.08%1.32%6.51%0.92%0.49% Los Gatos 1.74%10.0 1.58%-0.16%28,978 1.75%0.01%t.58%t.75%1.66%-0.08% Milpitas 2.75%13.5 2.13%-0.62%64,998 3.92%1.17%2.13%3.92%3.03%0.28% Monte Sereno 0.14%1.5 0.2a%0.10%3,505 0.21%0.07%0.24%0.21%0.22%0.08% Mountain View 3.9I%12.3 1.94%-1.97%72,033 4.35%0.44%1.94%4.35%3.14%-0,77% Palo Alto 4.06%26.0 4.10%0.04%61,674 3.72%-0.34%4.10%3.72%3.91%-0.15% San Joe6 30.01%t73.6 27.38%-2.63%944,857 57.00%26.99%27.38%57.00%42.19%12.18% Santa Clara 6.23%19.3 3.04%-3.19%109,106 6.58%0.35%3.0~.%6.58%4.81%-1.42% Saratoga 1.59%11.9 1.88%0.29%30,850 1.86%0.27%1.88%1.86%1.87%0.28% Sunnyvale 7.25%25.0 3.94%-3.31%133,086 8.03%0.78%3.94%8.03%5.99%-1.26% Santa Clara County 5.94%15.8 2.49%-3.45%80,564 4.86%-I.08%2.49%4.86%3.67%-2.27% SCV’WD 30,02%293.8 46.34%16.32%-0.00%-30,02%46.34%0.00%23.17%-6.85% Tota!100%634.1 100.00%0.00%1,657~’582 I00.00%0.00%100.00%100.00%100.00%0.00% Hilton Farnkopf & Hobson, LLC 13 November 23, 2005 Santa Clara Valley Urban RunoS#PolIution Prevention Program Final Report Cost Allocations Figure 6B. Budget Allocations Based on Population and Surface Area (One-Third Reduction in Surface Area for Runoff that is Recharged) Surface Area Allocations Population Allocations Current Allocations Allocations SCVURPPP Budget Based on Compared With Current Based on Compared With Current Member Allocations Land Area Allocation Population Allocation Campbell $58,618 $29,504 $(29,114) Cupertino $76,703 $5I ,141 $(25,562) Los Altos $49,576 $32,455 $(17,122) Los Altos Hills $13,407 $41,306 $27,898 Los Gates $54,253 $49,174 $(5,080) Milpitas $85,745 $66,384 $(19,361) Monte Serene $4,365 $7,376 $3,011 Mountain View $121,914 $60,484 $(61,430) Pale Alto $126,591 $127,851 $1,261 San Jos~$ 935,712 $853,654 $(82,058) Santa Clara $194,251 $94,905 $(99,346) Saratoga $49,576 $58,517 $8,940 Sunnyvale $226,055 $122,934 $(103,121) Santa Clara County $ 185,209 $ 77,556 $(107,654) SCVWD $ 936,024 $ 1,444,761 $508,737 Total $ 3,118,000 $ 3,118,000 $ Average of Surface Area and Population Allocations Allocations Based on Compared With Current Averages Allocation -50%$72,261 $13,642 23%$50,882 $(7,736)-13% -33%$100,546 $23,843 31%$75,843 $(859)-1% -35%$51,943 $2,367 5%$42,199 $(7,377)-15% 208%$15,899 $2,491 19%$28,602 $15,195 113% -9%$54,505 $252 0%$51,840 $(2,414)-4% -23%$122,265 $36,520 43%$94,325 $8,580 10% 69%$6,593 $2,228 51%$6,985 $2,619 60% -50%$ 135,498 $13,584 11%$ 97,991 $(23,923)-20% 1%$ 116.012 $(10,579)-8%$ 121,932 $(4,659)-4% -9%$ 1,777,326 $841,615 90%$ 1,315,490 $379,778 41% -51%$205,234 $I0,983 6%$150,070 $(44,182)-23% 18%$58,030 $8,454 17%$58,274 $8,697 18% -46%$250.342 $24,287 11%$186,638 $(39,417)-17% -58%$ 151,545 $(33,664)-18%$ 114,550 $(70,659)-38% 54%$$~936.024)-100%$ 722.380 $(213,643)-23% 0%$ 3,118,000 $0%$ 3,118,000 $0% Curren~ budget does not include permit fees Figure 6C. Allocations Shift From SCVWD to San Jos4 With All Others Unchanged Current Adjustment Revised Revised SCVURPPP Budget Current For Budget Alloc-Compared With Current Member Allocations Allocation District Allocations ation Allocation Campbell 1.88%$58,618 Cupertino 2.46%$76,703 Los Altos 1.59%$49,576 Los Altos Hills 0.43%$13,407 Los Gatos 1.74%$54,253 Milpitas 2.75%$85,745 Monte Sereno 0.14%$4,365 Mountain View 3.91%$121,914 Pato Alto 4.06%$126,591 SanJos~30.01% $213,643 $1,149,355 Santa Clara 6.23%$194,251 Saratoga 1.59%$49,576 Sunnyvale 7.25%$226,055 Santa Clara County 5.94%$185,209 SCVWD 30.02% $(213,643)$ 722,380 Total $ 3,118,000 100.00% $$ 3,118,000 $ 58,618 $ 76,703 $ 49,576 $13,407 $54,253 $ 85,745 $ 4,365 $ 121,914 $ 126,591 $ 935,712 $ 194,251 $ 49,576 $ 226,055 $ 185,209 $ 936,024 1.88% $ 2.46% $ 1.59% $ 0.43% $ 1.74% $ 2.75% $ 0.14% $ 3.91% $ 4.06% $ 36.86% $ 213,643 6.23% $ 1.59% $ 7.25% $ 5.94% $ 23.!7% $(213,643) 100.00% $ 0~00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.85% 0.00% 0.00% 0.00% 0.00% -6.85% 0.00% Hilton Farnkopf & Hobson, LLC 14 November 23, 2005 Fi~al Report Te~om qf Me~ora~d~¢~’, qf Agreez~e~t TERM OF MEMORANDUM OF AGREEMENT COMPARISON OF PROGRAMS The term of SCVURPPP’s MOA and NPDES Permit currently coincide or, rather, the term of the MC)A matches the Permit. Figure 7 summarizes the information that was readily available from the other program’s MOAs regarding the terms of their MOAs and Permits. Very little information was available on Permit dates. FINDINGS The lack of data in the program MOAs on Permit dates may indicate that this issue has not been of ~eat concern to the other programs. Indeed, two of the programs’ permits have been administratively extended. San Diego’s Program is noteworthy in that they specify that the term of the MOA shall equal the term of the Permit plus six months. This is a practical arrangement that allows for modifications to the MOA, if needed, within a reasonably short period after the Permit renewal. 7.~arison of MOA Terms 9-Mar-O~I 31-Mar-98 I 1 l-Jul-03 t 24-Jun-98 1 3-Dec-01 I Indefinite I Same as life of Permit plus 6 -!I months. One 5-year extension with no I Requires County and at leastOne-year extension to March objection 180 days prior to eleven members representing10, 2006.renewa! period.50% of population. Feb 21,2001, amended Oct.17. 2001 and July 20, 2005 t Feb-03 I Ju,-99 I Ju,-9£t I 21-Feb-01 2~-Feb-06 I Feb-08 I Jul-04 !Jul-04 !!2006 Hilto~z Fa~’~ko~f & Hobso~, LLC 15 November" 23, 2005 Santa Clara Valley Urban Runoff Pollution Prevention Program Final Report Scope qf Program SCOPE OF PROGRAM COMPARISON OF PROGRAMS All of the prog-rams are single-purpose, independent organizations devoted to stormwater pollution prevention and related objectives with the exception of San Mateo’s Program, which is part other programs managed by the City/County Association of Governments. As a result, the management of San Mateo’s Program is part of a larger administrative process. Figure 8 summarizes the program scopes and management procedures that are specified in their MOAs. SCVURPPP stands out among the programs in several respects: 1.It is the only program that prepares quarterly budget reports, semi-annual budget reconciliations, annual budget reviews, and compilation reports. 2.It is the only program that prepares an annual "Self-Audit Report" of the Program Manager, which is submitted to the program members and to the State as part of the Annual Report. 3. It has many more committees (i.e., ad hoc technical groups and work groups) than the other programs, thus allowing for more in-depth involvement in program activities by Co-permittees and other interested stakeholders. SCVIfRPPP is similar to the other Bay Area programs in securing resources to assist the Program Manager and the governing body address permit requirements. All of the programs rely on the following two approaches: 1.Request for Qualifications (RFQ) and/or Request for Proposal (RFP) process. All programs use some form of an RFQ and / or RFP process to identify and select assistance (for example, the Alameda Program just completed an RFQ process to select regulatory and technical program management assistance, and the Santa Clara Program recently utilized an RFP to identify and secure public information consulting assistance). 2. Sole Source process. All programs utilize this approach for very specialized work. All programs rely on sole source justification to secure resources in a timely and cost-effective manner (for example, the Alameda program recently used this process to secure the services of a specialized firm to assist with hydromodification analysis and the Contra Costa program recently secured outside resources to assist with water quality monitoring). The urban runoff programs appear to rely on the governing decision-making body, along with guidance from the Program Manager, to decide on a case-by-case basis which approach to utilize for identifying and selecting resource assistance. Hilton Farnkopf & Hobson, LLC 16 November 23, 2005 Santa Clara Valley Urban Runqff PolIution Prevention Program Final Report Scope qf Program Voting policies are a part of program management and are summarized in Figure 9. Most of the program members’ votes are weighted using their allocation shares. A majority and in some cases a supermajorit-y is required for passage. FINDINGS SCVURPPP is a rigorously managed program as evidenced by its budgeting and reporting controls. In this respect, it is in a class by itself compared with the other programs. This level of rigor does not seem inappropriate for SCVURPPP, which has been heavily scrutinized by the Regional Board (i.e., two audits in the last two years). SCVURPPP’s voting procedures are appropriately structured given the large stake of two of the members. By comparison with the other programs, we do not see any changes required in SCVURPPP’s management practices. Hilton Farnkopf & Hobson, LLC 17 November 23, 2005 Santa Clara Valley Urban Runqfif PoIIution Preve’~tion Program Final Report Scope of Program ;on of Pro Sco )es Main Categories: Operational, Projects, Collaborative.Subcetegofies: Program, Permit and Technical Management, Legal Services, Fiscal Agent, Monitoring, C3/HMP, PIP/WE&O, Coflaborat~ve fees RMP, CEP, CASQA) and Permi Fees. Planning and Regutatory Compliance, C.3 & Hydromodificatiein Management, Watershed Assessment, Monitoring and Spedal Studies, Pubic Information and Participation, Municipal Maintenance Activities, New Development and Construction Controls, Illicit Discharge Controls, and industrial/Commercial Discharge Controls. Administrative/personnel, Technicel Support Service, Permit Compliance Fees/Contributions, Group Activities, General Services & Supplies. Ratify permit application; prepare management plans;identify alternative revenue programs; enter into contracts with members to implement management plans and revenue programs; perform activities presecribed in management )tan; coordinate with members. (CtCAG atso handles transit, traffic, airport, solid and hazardous waste programs~) Equipment, services, contracted analytical services, and the cost of Regional Board permits. Regional General Programs, Watershed General Programs, Other General Programs MC Annual Work plan and Board adopts annual budget for Budget Committee preparesBudget Development and MC review and recommend expenses and revenues to MCApproval; quarterly budget annual budget; prepare draft City/County Association of I County prepares and submits estimated reports include twice yearly annual budget and pedodic Unspecified Governments (C/CAG) showing I implementation and operating budget reconciliations; annuaI t status reports on Program expenses, funding sources, and annual budgets. Members MC prepares draft budget. approve budget and work plan.Governing bodies approvebudget revieWreport.and compiiaticn activities and expenditure,serv ce teve s.annua budget. Administrators’ Advisory Committee: City Managers from cities providing staff to C/CAG, One representative from each One representative from each Up to b,,.,o representatives from County Manager, SamTrans Co-permittee.I Co-permittee.each Co-permittee.GM, City Manager appointed by City Managers’ Assoc, and C1CAG Chair, Vice Chair, andLogo, Counsel No designated MC One representative from each Co-permi~ee. Chaired by Principal Permittee (County). Annual Program Manager "Self- I Audit Report" submitted to MC for review and approval (draft, submi~ed at end of third quarter None specified.None spech3ed.None specified.None specified.None specified. and final submitted as pa~ of I State 11 Ad Hoc Technical Groups: Budget, Monitoring, Employee Training, C3PO (Design Standards WG, HMP WG, BMP Operations and Maintenance WG, Site Design WG, Infiltration WG), PIP! WEe (Scripts Review WG, Schools Outreach WG, AIviso Education Program WG, ]PM Pesticide Outreach WG, Mercury P2 Outreach WG), Pest Management Perfon’nance Standard, Watershed Analysis, Mercury P2, Trash, Waiver Provision. 5 Subcommittees: Watershed Assessment and Monito,ffng, Public Information and Participation. Munidpal Maintenance, New Development and Construction Site Controls, and ffticit and Industrial/Commercial Discharge control. 4 Subcommittees: Administrative, New Development and Construction Control, Pubtic Education and Industrial Outreach, and the Watershed and Monitoring. 2 Stormwater advisory committees: NPDES Committee, NPDES Technical Advisory Committee. (C/CAG has eight other committees unrelated to stormwater.) Technical Advisory Committee None specified. Hilton Farnkopf & Hobson, LLC 18 November 23, 2005 Santa CIm’a Valley Urban Runq~fPolIution Prevention Program Final Report Scope of Program of Votin~ County and Distdct represent Each Co-permittee has one Each Co-permittee has one Each Co-permittee has one one voting Co-perrnittee with ashare equal to the sum of their Each Co-perrnittee has oneweighted vote based on weighted vote based on weighted vote based on Each member has one vote.individual shares. Each city has vote.allocated shares,allocated shares,allocated shares,ore weighted vote based on allocated shares. At le-s" 8 ^fiqrm~tive votes that I Majority vote. Specie~ votes A majority of the allocated 223 affirmative vote of Co-" = ~ = ~ ~~2/3 affqrmetive vote of allocated require maiority of membersrepresen at least 50 ~ of i shares "shares,permittees.allocated shares,representing of population. £ voting reps, including 1 rep from either the City of San Jose Majority of Ce-permittees.Majority of Co-permittees.Majority of voting members.213 rounded up to the next or SCVWD.!,whole person of MC. Hilton Farnkopf & Hobson, LLC !9 November 23, 2005 Santa Clara Valley Urban Runoff Pollution Prevention Program Fina! Report Cost qf Program COST OF PROGRAM COMPARISON OF PROGRAMS Cost comparisons are difficult because of the lack of uniformity in budget formats and cost accounting. Even if there were perfect uniformity, differences in NPDES Permit requirements lead to different levels of response in each program. To improve comparability, cost comparisons were made for only the four programs in the Bay Area so that regulatory differences were minimized. Even so, each of the programs regulatory requirements differ.9 The costs are summarized by category in Figure 10. The key observation to draw from this comparison is that the percentages for each of the major program elements are generally the same among the programs. Percentages are a better indicator than absolute dollar values because percentages account for (normalize) the differences in overall program budgets. Based on information provided by the programs, it is our understanding that the program budgets only cover stormwater related costs and do not extend beyond their permit requirements. Differences between permits were not taken into account in the budget comparison (i.e., SCVURPPP and ACCWP have more recent and complete permits and thus broader and more specific permit requirements than STOPPP and CCCWP). The categories correspond to those that are used by SCVURPPP. Every attempt was made to map the other programs’ costs into these categories. This mapping process is imperfect because of the differences in budget line items used by each program. The budget details for each of the programs are shown in an appendix to this report. SCVURPPP’s budget is more detailed than other program budgets and thus assumptions regarding assignment of costs were required. Figure 11 compares the total budgets for each of the four Bay Area programs in terms of four benchmarks: cost per capita, cost per household, cost per gross square mile, and on the basis of median household income. The two southern California programs were not included because they are regulated by different Regional Boards. Programs were ranked I through 4 from lowest to highest benchmark. For the first three benchmarks, normalized budgets were derived using SCVURPPP’s population. The normalized budgets represent what the budget would be for each of the programs if they had the same population as SCVURPPP. In the case of the income benchmark, the benchmark was derived by dividing the cost per household by median household income for each county. The ranking was based on the resulting percentage; no normalized budget was calculated. 9 It should be noted that CCCWP falls within both Region 2 and Region 5. Hilton Farnkopf & Hobson, LLC 20 November 23, 2005 Santa Clara Valley Urban Runo/y PoIh;tion Prevention Program Final Repo~’t Cost qf Program The rankings are somewhat simplistic because they do not account for relative differences. To account for the relative differences, each of the four benchmarks was also indexed to SCVURPPP at the bottom of Figure 11 and in Figure 12. In addition to the above, we reviewed the memo prepared by SCV-O~,PPP entitled "SCVURPPP Stormwater Regulatory Drivers and Implications to SCVURPPP Budget, January 11, 2005" that provided a summary of the program costs for the past 14 Years. Figures 13 and 14 (Figures I and 2 from the memo) provide a summary of the historic Program costs. The following observations can be made: ¯The total budget during the recent period of from 1997 to 2005 has on average been 5% less than the total budget from 1991 thru 1996; ¯Recent management costs average 16% less than historical management costs; ¯Management costs (as a percent of total program costs) represent approximately 36% of the total budget and have steadily decreased (as a percentage of total costs) over the past seven years while the management demands and reporting requirements have steadily increased due to new permit requirements; o Collaborative costs (i.e., contributions to various state programs such as Clean Estuary Progarm, Regional Monitoring Program, BASMAA, and CASQA) have increased significantly from FY 1996-1997 and represent approximately 18% of the current total budget; ¯Permit fees have increased from $10,000 prior to 2002 to $161,000 per year and are expected to increase each year; ¯Technical, monitoring, and outreach efforts historically represented about 60% of the total budget and represent about 50% of total budget for the last several years; and °Overall, the Program and Co-permittees are doing more work with less operating and technical budget while permit requirements have steadily increased and collaborative and permit fees have significantly increased. Based on the review contained in the memo, it is obvious that the 2001 NPDES permit required significantly more effort on the part of the Program and the Co-permittees than the previous permits and includes preparation and implementation of new and redevelopment performance standards, pollutant specific requirements (mercury, pesticides, sediment, copper & nickel), watershed monitoring, and outreach efforts. All indications are that the requirements of the new regional permit that are anticipated sometime next year would demand even more from the Program and Co-permittees. It is clear that SCVURPPP’s goal through Management Committment administration and oversight has been to efficiently and effectively comply with the demands of the Water Board permits. Hilton Farnkopf & Hobson, LLC 2~November 23, 2005 Sa’nta Clara Valley Urban Runoff PolIution Prevention Program Final Report Cost of Program FINDINGS SCVURPPP’s benchmarks compare well with the other programs. None of SCVURPPP’s benchmarks are ranked most costly. One of its benchmarks ranks as the least amount. On the basis of average ranking, SCVURPPP is equal to STOPPP. On the basis of average index, SCVURPPP is second lowest to ACCWP. As previously explained, SCVURPPP is comparatively well managed. Management comes at a cost, but as seen here with these benchmarks, the cost of SCVURPPP’s program compares quite favorably with the other Bay Area programs. Figure 10. Comparison of Bud A Permit/Program Administration and Reporting B Public Education and Outreach C Monitoring D Legal E Collaborative Program F Miscellaneous $1,128,576 36% $612,997 20% $735,000 24% $87,818 3% $553,480 18% $0 0% $781,500 34~ $681,500 29~ $632,000 27~ $0 0~ $222,000 10% $0 0% $1,025,834 42% $610,000 25% $230,000 9% $5,000 0% $55~,000 23% $33,893 1% $442,000 $466,159 $203,000 $100,000 $183,100 $0 Budget Total $3,117,871 100%$2,317,000 100%$2,463,727 100%$1,394,259 Notes: Permit fees are not included in the budgets. The permits for CCCWP and STOPPP do not include provisions for POCs or sediment and watershed assessments as do the SCVURPPP and ACCWP permits. 32% 33% 15% 7% 13% O% 100~ Hilton Farnkopf & Hobson, LLC 22 November 23, 2005 Santa Clara ValIey Urban Runqff. Pollution Prevention Program Final Report Cost qf Program Figure 11.Comparison of Benchmarks SCVURPPP ACCWP CCCWP STOPPP FY 05-06 Budget $3,118,000 $2,317,000 $2,464,000 $1,394,000 Population Benchmark Population 1,657,582 1,461,000 1,001,100 Dollars per Capita $I .88 $1.59 $2.46 Rank 2 1 4 Indexed to SCVURPPP ! 00%84%131% Budget Normalized to SCVURPPP $3,118,000 $2,628,759 $4,079,794 Household Benchmark Households (2000)565,863 523,366 344,100 Dollars per Household $5.51 $4.43 $7.16 Rank 3 1 4 Indexed to SCVURPPP 100%80%130% Budget Normalized to SCVURPPP $3,118,000 $2,505,139 $4,051,980 Surface Area Benchmark Total Area, sq. mis. (2000)951 664 720 Dollars per Square Mile $3,278 $3,488 $3,422 Rank 2 4 3 Indexed to SCVURPPP 100%106%104% Budget Normalized to SCVURPPP $3,118,000 $3,317,894 $3,254,944 697,500 $2.00 3 106% $3,312,788 254,103 $5.49 2 100% $3,104,304 427 $3,268 1 100% $3,108,337 Income Benchmark Median Household Income (1999)$74,300 $55,900 $63,700 $70,819 Dollars per Household $5.51 $4.43 $7.I6 $5.49 Percent of MHI 0.0074%0.0079%0.0112%0.0077% Rank 1 3 4 2 Indexed to SCVURPPP 100%I07%152%104% Averaoes Rank 2.0 Z3 3.8 Index 100%94%129% 2.0 102% Notes: Population: SCVURPPP is for program on}y. A!I others are total Count, (program populations are unavailable). Households: For ati programs County households are used. Surface area is estimated for programs. Median household income is for counties; program MHIs are unavailable. Hilton Farnkopf & Hobson, LLC 23 November 23, 2005 Santa Clara ~.II~! Urban Runqf.fPollution Prevention Program Final RepoTt Cost of Prouam Figure 12. Comparison of Benchmark Indices Population Land Ares Normalized P~,rarneters II~SCVURPPP i~ACCWP i-;CCCWP E~STOPPP 100% Figure 13. Historic SCVURPPP Budget By Category ~ Collaborative Fees ’[ r~ Permit Fees~l~Tech.fMon~ & Outreach i ~ Management SCVURPPP Program Cost Percent of Total by ~NTERNA~ I "-~ 80% 60% 40% 20% O% Hilton Farnkopf & Hobson, LLC 24 November 23, 2005 Sal~ta Clara VaIIq! Urban Runqff. PolIution Prevention Program Final RepoYt Cost qfi I~I Cetlabora,:~#e Fees ~, Perm~ Fees t~Tech/Monit, & Ou’~reach ~ Managemen~ Figure 14.Historic SCVURPPP Costs SCVURPPP Program Cost By Category IHTERNAL ~1~~ -EXTERNAL NEWPERMIT $3 000.000 Hilton Farnkopf & Hobson, LLC 25 November 23, 2005