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Staff Report PREPARED BY: MATT MORLEY Director of Parks and Public Works Reviewed by: Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 04/04/2017 ITEM NO: 5 DATE: MARCH 20, 2017 TO: MAYOR AND TOWN COUNCIL FROM: LAUREL PREVETTI, TOWN MANAGER SUBJECT: WEST VALLEY CLEAN WATER PROGRAM BUDGET AND NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM PERMIT UPDATE A. APPROVE THE FY 2017/18 WEST VALLEY CLEAN WATER PROGRAM BUDGET AND AUTHORIZE THE WEST VALLEY SANITATION DISTRICT TO COLLECT PROGRAM RELATED FEES ON BEHALF OF THE TOWN OF LOS GATOS. B. ACCEPT THE STAFF REPORT ON THE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM (NPDES) PERMIT UPDATE. RECOMMENDATION: Staff recommends that the Town Council: 1. Approve the FY 2017/18 West Valley Clean Water Program Budget and authorize the West Valley Sanitation District to collect program related fees on behalf of the Town of Los Gatos. 2. Accept the staff report on the National Pollutant Discharge Elimination System (NPDES) Permit Update. BACKGROUND: The West Valley Clean Water Program (WVCWP) ensures that clean, unpolluted water flows to the local creeks and ultimately the San Francisco Bay. Program requirements continue to increase, both under past regulations and recently approved regulations that took effect January of 2016. These increased requirements fall to local jurisdictions for implementation. This report provides a look at the new requirements and their associated costs. Additionally, this report provides information on the WVCWP budget and recommends Council approval of the draft budget. PAGE 2 OF 5 SUBJECT: WEST VALLEY CLEAN WATER PROGRAM BUDGET AND NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM PERMIT UPDATE MARCH 20, 2017 S:\COUNCIL REPORTS\2017\04-04-17\WV Clean Water\Staff Report FINAL.docx 3/30/2017 11:15 AM MM BACKGROUND (cont’d): The San Francisco Bay Regional Water Quality Control Board (RWQCB or Regional Board) acts as the responsible agency for regulating water that enters streams and ultimately the bay, ensuring the water is clean and unpolluted in compliance with the federally mandated Clean Water Act. The RWQCB does this through the issuance of permits to local agencies (the Municipal Regional Stormwater Permits) that require compliance with a series of regulations. The permits are issued regionally in approximately five year cycles, with the last issuance in January 2016. The permits issued by the RWQCB contain requirements which escalate over time. These requirements are meant to increase accountability at the local jurisdiction level while allowing ramp up time for compliance. The requirements of the permit may take the form of unfunded mandates. A discussion on the types of requirements occurs later in this report. Locally, there are four programs that manage pollution prevention for waterways: the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP), West Valley Sanitation District (WVSD), WVCWP, and the Town-managed Non-Point Source Discharge Elimination Program (NPDES). These programs perform various functions required under the Clean Water Act, Environmental Protection Agency regulations, and respective NPDES permits. SCVURPPP is an association of thirteen municipalities (including Los Gatos) in the Santa Clara Valley and also includes the Santa Clara Valley Water District. The organization ensures that efforts of the individual jurisdictions align to achieve the requirements set forth in the permit. WVCWP is a consolidated local program managed by WVSD for the Town and the cities of Campbell, Monte Sereno, and Saratoga. WVCWP’s purpose includes coordinating efforts of other agencies, such as the County Fire District and County Environmental Health Department, performing NPDES inspection activities for the Town, conducting public education activities, streamlining implementation of the current NPDES permit, and writing and submitting the Annual Report and Work Plan for the four municipalities to the State Regional Water Quality Control Board. The WVCWP offers a unified, stronger voice to represent the interests of West Valley cities at the County-wide program level and with regional bodies. Additionally, it has proven to be more cost-effective and time-efficient for the West Valley cities to manage this program and address NPDES issues through a single point of contact. The Town’s NPDES program provides the local enforcement and compliance efforts associated with the permit. This includes ensuring compliance at Town facilities, inspecting construction and development projects to ensure compliance, providing for street sweeping, and reporting information through the WVCWP to the Regional Board. As the requirements of the permit PAGE 3 OF 5 SUBJECT: WEST VALLEY CLEAN WATER PROGRAM BUDGET AND NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM PERMIT UPDATE MARCH 20, 2017 S:\COUNCIL REPORTS\2017\04-04-17\WV Clean Water\Staff Report FINAL.docx 3/30/2017 11:15 AM MM BACKGROUND (cont’d): have increased, the Town has taken on increasingly greater responsibilities and associated costs. DISCUSSION: Section C of the permit identifies areas of compliance, including Section C.2. Municipal Operations, C.3. New Development and Redevelopment, and C.10. Trashload Reductions. All private development must comply with the “C.3.” requirements of the regional stormwater permit. The C.3. requirements include the implementation of Low Impact Development (LID) features to treat stormwater onsite through the use of pervious surfaces, bio -retention basins, green roofs, or other solutions. Inspection requirements have increased under the current permit. Previously, one inspection was required per project within 45 days of project completion, and Parks and Public Works inspectors could often fit the inspection into their existing workload when the project was within proximity of other inspection sites. The escalating regulations now require more frequent inspections during construction to capture the installation progress of each LID. These costs will be collected through private development fees. Similarly in C.10. Trashload Reductions, the Town has submitted a plan to meet the requirement to reduce trashload impacts to creeks 40% by 2014, 70% by 2017, and 100% by 2022. The plan includes solutions such as determining the right size and number of trash receptacles needed, monitoring properties that are large contributors, installing trash capture devices in storm inlets, and increasing recycling efforts. Each of these items has associated costs and workloads and as the requirements increase, incremental gains become more difficult and more expensive. The Town completes a portion of this work with in -house staff while contracting some services to West Valley Sanitation. Where requirements and resulting expenditures directly correlate with keeping trash out of the storm drain system, staff will propose garbage rate increases through West Valley Sanitation District. Where costs are related to developments, including inspection of ongoing maintenance activities on private property, the Town has implemented additional fees , as noted above. For areas of the storm drain infrastructure that face capacity constraints or have capital maintenance needs, the Town relies on fees collected from developments within dedicated Storm Basin funds. These funds will not be sufficient to meet long -term needs for the Town, which may in turn necessitate alternative solutions such as a Proposition 218 compliant property assessed fee. The first step in addressing these needs is a Town wide storm system master plan and needs assessment. PAGE 4 OF 5 SUBJECT: WEST VALLEY CLEAN WATER PROGRAM BUDGET AND NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM PERMIT UPDATE MARCH 20, 2017 S:\COUNCIL REPORTS\2017\04-04-17\WV Clean Water\Staff Report FINAL.docx 3/30/2017 11:15 AM MM DISCUSSION (cont’d.): Program Expenses Each year, the WVSD and the four municipalities participating in the WVCWP cooperatively prepare an outline of the Annual Work Plan for WVCWP and the associated operating budget for approval prior to the establishment of the annual user fees, and prior to the District transmitting those fees to the County for collection from property tax rolls. The proposed budget is then presented to the four municipalities individually for approval. The draft budget is provided as Attachment 1 for review and approval with this item. The proposed budget is ultimately approved and adopted by the WVSD Board of Directors. The proposed FY 2017/18 WVCWP budget shows increases in the areas of operating expenditures, administrative costs, and permit compliance costs related to an increase in personnel costs. The State associated costs for the NDPES permit are projected to continue to increase in the long-term. Additionally, costs are projected to increase for fees associated with facility inspection. For next year’s proposed budget, NPDES related fees will increase by 5%, while overall administration and program management fees for the WVCWP will increase by approximately 7%. Page two of this report provides an overview of the services the WVCWP provides to the Town. The WVSD collects fees from Town residents through assessments collected with property taxes. The revenue collected is approximately $353,000 annually. These fees fund the WVCWP as well as some Town obligations within the Town’s overall program budget of approximately $580,000. WVSD conducts a regular review of the collections to ensure fees are levied at the appropriate level. CONCLUSION: Staff recommends that the Town Council: 1. Approve the FY 2017/18 West Valley Clean Water Program Budget and authorize the West Valley Sanitation District to collect program related fees on behalf of the Town of Los Gatos. 2. Accept the staff report on the National Pollutant Discharge Elimination System (NPDES) Permit Update. PAGE 5 OF 5 SUBJECT: WEST VALLEY CLEAN WATER PROGRAM BUDGET AND NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM PERMIT UPDATE MARCH 20, 2017 S:\COUNCIL REPORTS\2017\04-04-17\WV Clean Water\Staff Report FINAL.docx 3/30/2017 11:15 AM MM COORDINATION: This report has been coordinated with the West Valley Clean Water Program and the West Valley Sanitation District. FISCAL IMPACT: The approval of this budget will allow the WVSD to continue to collect revenue on behalf of the Town in the amount of approximately $353,000 to fund the Town’s portion of the WVCWP operating budget. The Town’s portion of the WVCWP for FY 2017/18 is $3 25,507. In other words, the approval of the budget does not involve the appropriation of any funds from the Town’s general fund. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachment: 1. West Valley Clean Water Program FY 2017/18 Proposed Budget.