June 14, 2005

SUBJECT:      Acceptance of Nomination for Sunnyvale to Act as Contracting and Fiscal Agent for the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP)

REPORT IN BRIEF

The City of Sunnyvale is one of 15 members of the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP).  SCVURPPP was formed to implement the National Pollution Discharge Elimination Permit (NPDES) issued to the cities, County, and Santa Clara Valley Water District who discharge storm water to the San Francisco Bay.  SCVURPPP also provides a regional forum to best address storm water issues.  These 15 agencies have signed a Memorandum of Agreement (MOA) and pay annual assessments to cover the cost of programmatic activities related to implementing the NPDES permit.

The MOA provides for the selection of one of the members as the Program’s Contracting and Fiscal Agent.  The Santa Clara Valley Water District has performed this function since the inception of the MOA, but has provided written notice that it no longer wishes to continue this role.  The City of Sunnyvale has been nominated as the proposed new Contracting and Fiscal Agent.  Staff proposes to accept this nomination with the condition of full reimbursement of costs to complete the required duties.

BACKGROUND

In May 1990, Council approved an agreement that implemented the Santa Clara Valley Nonpoint Source Pollution Control Program (the Agreement). The Agreement joined the City of Sunnyvale with twelve other cities in Santa Clara County, plus the County and the Santa Clara Valley Water District together as “Co-permittees.”  The Agreement allowed these entities to jointly apply for and implement their NPDES storm water permits.  The Agreement outlined area-wide programs for cohesive program planning, water quality monitoring, outreach and education.  The term of the agreement was five years with an automatic renewal provision upon the approval of the Co-permittees at that time.  Subsequently, in December 1999, Council approved an amendment to the Agreement to change the title of the program to Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP).  On March 1, 2005, the City Council approved a second amendment to the Agreement which extended the terms of the Agreement for one year.

The Program has initiated the application process for the fourth municipal storm water NPDES permit on behalf of the Co-permittees under the conditions of the MOA.  Members of SCVURPPP (including the City of Sunnyvale) submitted a reapplication for a new Storm Water NPDES Permit in February 2005 and will continue to use the program’s assistance in implementing the provisions of the current NPDES permit and negotiating the terms of the new permit.

In order to provide the services mentioned above, the Management Committee of SCVURPPP (essentially this is a Steering Committee which is comprised of a representative of each Co-permittee) collects yearly assessments from each of the Co-permittees.  The current SCVURPPP cost-sharing arrangement is based on roughly 30% contributions by the City of San Jose and Santa Clara Valley Water District, and the remaining 40% split amongst the other 13 co-permittees, based on population.  The total FY 2004/2005 assessments were $3,287,400 and Sunnyvale’s assessment, established under the MOA as 7.25% of the total, was $242,934. SCVURPPP contracts for professional program management services with a firm with specialized expertise in the area of urban runoff pollution prevention.  The contract is currently held by Eisenberg, Olivieri, and Associates (EOA) for a term of five years and a total contract price not to exceed $13,080,918.  EOA is responsible for providing general administrative assistance, budget preparation and reporting, and public information program development and management.  Most significantly, EOA also provides management of the joint stormwater NPDES permit, including permit application preparation, permit report preparation, permit compliance assistance, monitoring of the impacts of potential regulatory issues on Co-permittees, attendance at external meetings on behalf of SCVURPPP, and acting as the liaison to SCVURPPP’s legal counsel.

In order to generate and collect the assessments identified by the MOA for each Co-permittee and contract with a consultant for program management, the MOA calls for one of the Co-permittees to act as the Contracting and Fiscal Agent.  The Contracting and Fiscal Agent provides billing and payment services for the Management Committee, and acts as the awarding authority for any contracts that the Management Committee wishes to enter into.  These functions are currently being provided by the Santa Clara Valley Water District (SCVWD).  SCVWD has expressed a desire to reduce its role and contribution to SCVURPPP; this is attributed to recent revenue losses by SCVWD.  In keeping with their interest in playing a smaller role, SCVWD no longer intends to provide these services and has given the required ninety-day notice of intent to withdraw as the Contracting and Fiscal Agent to the Management Committee.  Sunnyvale has been nominated to serve in this role.

EXISTING POLICY

Surface Runoff Sub-Element Policy 3.4, A.1 supports the City’s continued participation in SCVURPPP to identify and develop Best Management Practices to assure the reasonable protection of beneficial uses of creeks and San Francisco Bay, as established in the Regional Board’s Basin Plan and to protect environmentally sensitive areas. 

Surface Runoff Sub-Element Policy 3.4, A.2 also states that the City will comply with regulatory requirements and participate in processes that may result in modifications to those requirements.

DISCUSSION

On March 17, 2005, the Management Committee adopted a resolution nominating the City of Sunnyvale to assume the role of the Program’s Contracting and Fiscal Agent (Attachment A).  The acceptance of this role by the City is contingent upon approval by the City Council and, if approved, subject to annual review by the Director of Public Works.  The resolution also states that the City shall be fully reimbursed for all reasonable and customary costs incurred in its provision of services to the Program as the Contracting and Fiscal Agent.  Finally, the resolution specifies, at the City’s request, that the Program shall pay to have an outside accounting firm conduct an annual audit of the Program to document the fiscal year end fund balance and ensure that the City is applying the appropriate fiscal and contracting practices.

Staff proposes that the Contracting and Fiscal Agent function be performed by the Finance Department.  All work will be performed in the Utility Billing, Collection and Revenue Management Program under a special project.  Accepting this task will require the hiring of a part-time employee who will be responsible for coordination and implementation of the tasks required by the Program.  Additional costs including general oversight, human resources services, payroll services, legal services, and other general city overhead, will also be recovered. 

The Management Committee of SCVURPPP recommended the City of Sunnyvale take on the role of Fiscal Agent due to Sunnyvale’s expertise and ability to successfully handle this work effort.  Sunnyvale’s acceptance of the role of Fiscal Agent will provide continuity for the Program and avoid any potential  disruption to our compliance with the NPDES permit.  

FISCAL IMPACT

The provision of this service for SCVURPPP will have no net fiscal impact on the City.  All costs incurred by the City will be fully reimbursed by the Program through the provisions of the MOA and the City will not subsidize any of the activities performed on behalf of the Program.  Anticipated costs to be reimbursed are detailed in the table below:

Finance staff will establish a new Agency Fund with a separate bank account to properly segregate the SCVURPPP funds from other City monies.  All payments and revenues will be posted to this account per standard governmental accounting practices. 

The appropriation for operating expenses will reside in the City’s Wastewater Management Fund as a Special Project (Attachment B). The project will be reimbursed each accounting period for the total cost of providing the services.  If Council approves Sunnyvale’s nomination as Contracting and Fiscal Agent, staff will include this project with the FY 2005/2006 Adopted Budget presentation on June 23, 2005. 

Conclusion

Acting as the Contracting and Fiscal Agent for SCVURPPP is consistent with the City’s reputation as an active participant in intergovernmental activities. Additionally, it is in the City’s interest to maintain this relationship with other jurisdictions as it is the most cost effective and environmentally preferable approach to storm water management.

PUBLIC CONTACT

Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s Web page, and the availability of the report in the Library and City Clerk’s Office.

ALTERNATIVES

1.                  Approve a motion to establish the City of Sunnyvale as Contracting and Fiscal Agent for the Santa Clara Valley Urban Runoff Pollution Prevention Program at full cost recovery, subject to annual review by the Director of Public Works and authorize the City Manager or designee to execute all agreements and documents necessary to effectuate this direction.

2.                  Take no action.

RECOMMENDATION

Staff recommends Alternative 1 to approve a motion to establish the City of Sunnyvale as Contracting and Fiscal Agent for the Santa Clara Valley Urban Runoff Pollution Prevention Program, subject to annual review by the Director of Public Works.

Reviewed by:

Mary J. Bradley, Director of Finance

Prepared by: Timothy J. Kirby, Revenue Systems Supervisor

Reviewed by:

Marvin A. Rose

Director of Public Works

Approved by:

Amy Chan

City Manager

Attachments

A. Approved Resolution of the Management Committee of the Santa Clara Valley Urban Runoff Pollution Prevention Program (.pdf format)

B. Santa Clara Valley Urban Runoff Pollution Prevention Program Contracting and Fiscal Agent Project Sheet (.pdf format)