March 1, 2005              

SUBJECT:             Amendment to the Memorandum of Agreement for Participation in the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP)

REPORT IN BRIEF

This report recommends that the City Council authorize the City Manager to sign a new First Amendment to the Memorandum of Agreement (MOA, Attachment A) Providing for Implementation of Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP or Program).  The existing MOA is set to expire on March 10, 2005.  The 15 participants have agreed to the concept that the program should continue, and that an evaluation of the cost allocation formula, term, scope and cost of the Program MOA should be performed during the upcoming year.  The attached amendment provides for the one year extension and the review of the program and cost sharing allocation and is being brought forward for Council approval.  If and when new cost sharing terms are determined and agreed upon, another amendment to reallocate costs amongst the participants and further extend the term of the MOA would be brought back to Council for approval.

BACKGROUND

The MOA provides for a five-year term that is set to conclude as of March 10, 2005.  A previous Amendment to the MOA was brought forward and approved by City Council on December 14, 2004, which would have extended the term of the MOA indefinitely.  However, this amendment was not approved by all 15 of the program participants, and thus it failed because unanimous approval is required under the terms of the MOA. 

The Santa Clara Valley Water District Board rejected the proposed amendment at its regular meeting on January 18, 2005 and instead directed their staff to negotiate to extend the term for just one year and to require that an evaluation of the program and cost allocation formula be performed. The Board expressed its unwillingness to extend the term indefinitely and its desire to review the cost allocation formula in part because of a large revenue loss the District recently experienced as a result of the state withholding allocations to local agencies to reduce its own revenue shortfalls, and in part because the District wishes to review the program in detail. 

The cost sharing allocation set forth in the MOA was originally made on the basis of population for the 13 cities, population in unincorporated areas for the County of Santa Clara share, and the Santa Clara Valley Water District agreed to a cost share of 30.02%.  San Jose’s share works out to 30.01% on this basis, and Sunnyvale’s share is the next largest at 7.25%.  The rest of the cities and the County’s share are smaller, ranging from less than a percent (City of Los Altos Hills) to 6.23% (City of Santa Clara). 

At a meeting of the Santa Clara County/Cities Managers’ Association in early February, the city managers and Stan Williams, CEO of the Santa Clara Valley Water District, came to an agreement to submit for approval by their governing boards an amendment to the MOA that would extend the term for one year and require the evaluation of the cost allocation formula and the term, scope and cost of the Program’s MOA.  The Association submitted a letter to the District Board, requesting the Board’s consideration of such an amendment, following its rejection of the previously proposed amendment.

At its regular meeting on February 15, 2005, the District Board authorized the District CEO to negotiate and sign a one year amendment to the MOA and to renegotiate the cost sharing allocation during the next year.  CEO Stan Williams has since signed the amendment and it is now being submitted for Council approval. 

SCVURPPP participants directed the program manager to submit the required application for the fourth municipal storm water NPDES permit on the due date of February 25, 2005 on behalf of all 15 participants, including the Water District, based on the agreement at the staff level that each participating agency would take the proposed amendment for a one year extension and a program review back to their governing board for approval.  The SCVURPPP participants expect to continue to use the Program’s assistance in implementing the provisions of the current NPDES permit after March 10, 2005 and to negotiate requirements for the new permit.

Program History - In May 1990, Council approved an agreement that implemented the Santa Clara Valley Nonpoint Source Pollution Control Program (Agreement, Attachment B.) 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.

In December 1999, City Council approved the revision to the Memorandum of Agreement (MOA) that is currently in effect, which joins these same co-permitees under the program title of Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP or the Program). The current MOA also allows the Program to jointly apply for and implement aspects of the NPDES storm water discharge permits on behalf of these entities.

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

The SCVURPPP is a nation-wide model for regional NPDES storm water permit compliance and is a leader in developing and implementing approaches to storm water issues for local Bay Area storm water programs.  Approval of the Amendment to the MOA will provide the most cost-effective and efficient method to maintain continuity in the implementation of SCVURPPP activities and negotiation of the upcoming permit. Over the past four years, the City of Sunnyvale, working together with other co-permittees and with Program assistance, has made significant strides in addressing pollutant specific and watershed based issues.  This is in addition to those issues dealing with the new and redevelopment requirements of our NPDES storm water permit.

The City’s annual contributions for the SCVURPPP to implement the provisions of the NPDES Storm Water Discharge Permit region-wide have shown minimal increases between FY 02-03 and FY 04-05 ($232,209 in FY 02-03; $242,977 in FY 03-04; and $242,934 in FY 04-05). The Program’s budget has remained essentially flat despite the demands of significant increases in annual permit fees assessed by the Regional Water Quality Control Board and other additional fees and contributions to and participation in regional storm water programs and monitoring efforts. These financial demands have continued to reduce the operating capital for internal Program activities.  However, the City’s proportional share of the cost allocations of the SCVURPPP budget has remained stable at 7.25%.

It has proven to be a cost-effective and practical approach to work together with the co-permittees under the current MOA with SCVURPPP to find area-wide and region-wide solutions to permit requirements that can then be implemented on a local basis.  Approval of the MOA amendment will allow for the City’s continued participation in the SCVURPPP and negotiation of the upcoming new storm water permit application.

The review of the cost allocation included in the proposed amendment will examine the original methodology for the cost allocation, as well as survey other storm water programs and their cost allocations. 

FISCAL IMPACT

The fiscal impact of continuing to participate in the MOA, which includes the re-application for the City’s NPDES Storm Water Discharge Permit was planned for in the FY 04-05 Operating Budget for the Wastewater Management Fund.   Current costs to the City in FY 04-05 for participation in the Program are $242,934, and would remain the same for FY 05-06 under the proposed Amendment.  If the City were to try to implement all of the NPDES Storm Water Permit provisions on its own without the assistance of the SCVURPPP, it is likely that significant additional City funds would be needed to ensure compliance with permit provisions.

CONCLUSION

Approving the amendment to the MOA to continue the City’s participation in the SCVURPPP will allow the City to utilize an area-wide approach for program development and provide a cost-efficient and effective way to comply with current storm water permit conditions and to negotiate the next storm water permit.

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. Authorize the City Manager to sign the Amendment to the Memorandum of Agreement, allowing the City’s continued participation in the Santa Clara Valley Urban Runoff Pollution Prevention Program.  This action is supportive of the area-wide urban runoff pollution prevention program and will allow for cost-effective implementation of the current storm water permit and negotiation of the next permit. 

1.      2. Do not authorize the City Manager to sign the amendment to the Memorandum of Agreement and discontinue the City’s participation as a member of the SCVURPPP. This would require the City to negotiate an individual NPDES storm water discharge permit and to achieve compliance with the current and future permits on its own, without the benefit and assistance of the program.

2.       

RECOMMENDATION

Staff recommends Alternative 1:  Authorize the City Manager to sign the Amendment to the Memorandum of Agreement, allowing the City’s continued participation in the Santa Clara Valley Urban Runoff Pollution Prevention Program.  This action is supportive of the area-wide urban runoff pollution prevention program and will allow for cost-effective implementation of the current storm water permit and negotiation of the next permit.