REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager, or Designee, to (1) Execute the Cost Share Agreement by and between the City of Sunnyvale and the Santa Clara Valley Water District for the Construction of a Joint Wall for the Sunnyvale Cleanwater Program's Perimeter Wall, and (2) Execute the West Channel Joint Wall Project: Operation and Maintenance Agreement Between the City of Sunnyvale and the Santa Clara Valley Water District for the Sunnyvale Cleanwater Program's Perimeter Wall
Report
BACKGROUND
The City is currently working on the most significant single public works program in its history: the rebuild of its aging Water Pollution Control Plant (WPCP), which is responsible for treating wastewater from all of Sunnyvale and small areas within the cities of Cupertino and San Jose. Named the “Sunnyvale Cleanwater Program” (SCWP), the total budgeted cost is approximately $1.4 billion.
As a part of the SCWP, the City is constructing a perimeter wall around the WPCP, with construction divided into two project packages. The perimeter wall around the eastern half of the WPCP was completed as part of Project 824771-SCWP Primary Process Design and Construction. The perimeter wall around the northern and western sides of the WPCP is included in Project 833150-SCWP Existing Plant Rehabilitation. The wall surrounding the southern portion of the WPCP is also part of the SCWP Existing Plant Rehabilitation Project, but it is not included in the proposed agreements with the Santa Clara Valley Water District (Valley Water). The three segments of perimeter walls are currently in the design phase.
Valley Water is responsible for flood protection along the Sunnyvale East and West Channels and is designing additional flood control features to prevent 100-year storm-related flooding. These features parallel the City’s planned perimeter wall along the west and a portion of the north side of the WPCP.
As portions of the City’s wall and Valley Water’s wall would be very close or occupy the same footprint, the City and Valley Water collaborated on a single wall that satisfies the design criteria of both agencies.
EXISTING POLICY
The Sunnyvale City Council adopted the WPCP Master Plan and Programmatic Environmental Impact Report (PEIR) in August 2016 (RTC No. 16-0663). These planning documents include ten overall objectives, among them, “In partnership with other agencies, protect the WPCP from flooding and risks associated with sea level rise.”
Council Policy C.1.4 indicates “New or expanded capital improvements should maximize value and avoid duplication whenever possible by partnering with other entities to pool resources or share facilities.”
Further, Council Policy C.2.3 states: “The City will seek out and use intergovernmental funding sources for capital improvements, as is consistent with City priorities and General Plan goals.”
ENVIRONMENTAL REVIEW
The WPCP Master Plan PEIR evaluated all SCWP projects, including the SCWP Existing Plant Rehabilitation Project (833150). California Environmental Quality Act (CEQA) Guidelines Section 15162(a) requires that any changes or additions to the description of a project that occur after certification of an EIR may require additional analysis if those changes are substantial and involve new significant environmental effects or a substantial increase in the severity of previously identified effects. An addendum to the PEIR for Project 833150 determined that there are no new significant environmental effects or a substantial increase in the severity of previously identified effects. Council accepted this addendum in August 2021 (RTC No. 21-0756).
No additional environmental review is required.
DISCUSSION
City and Valley Water staff have collaborated on a single joint wall that serves the public’s best interest, aiming to achieve the economic benefits and efficiencies resulting from combining the design and construction of both agencies’ public improvement projects. The joint wall would be higher than the rest of the WPCP perimeter wall to provide 100-year storm protection as required by Valley Water. While both agencies would have responsibility for the joint wall after construction, the City would be responsible for managing the design, permitting, and construction, and would retain ownership of the structure.
City and Valley Water staff have negotiated an operation & maintenance (O&M) agreement and a cost-sharing agreement for the joint wall (Attachments 1 and 2). Execution of these agreements was approved by Valley Water’s Board of Directors (Board) on September 23, 2025. Valley Water’s Board also authorized conveyance of real property on the north side of the WPCP where the proposed joint wall will be constructed (Attachment 3).
Cost-Sharing Agreement
The purpose of the cost-sharing agreement is to define the City and Valley Water’s responsibilities for constructing the joint wall and to outline how the costs for its design and construction will be shared. A summary of the key terms is as follows:
• City covers 100% of program management and utility relocation fees.
• Valley Water covers 100% of appraisal costs.
• City and Valley Water share engineering (estimated at approximately $814,000) and construction phase costs (estimated at approximately $7,800,000) on a 50% / 50% basis.
o If the bid price exceeds the estimated cost by more than $3 million, then the City must either reject all bids or negotiate and reach an agreement with Valley Water for a mutually agreed-upon cost share.
• City assumes ownership of the joint wall upon completion of construction.
O&M Agreement
The purpose of the O&M agreement is to define the City and Valley Water’s responsibilities for maintaining the joint wall and to outline how the cost of this maintenance will be shared. A summary of the key terms is as follows:
• Both the City and Valley Water will jointly determine when structural repairs are required and will generally share costs of minor structural repairs (such as spalling, cracks, etc.) and major structural repairs from a force majeure on a 50% / 50% basis.
• The City will complete minor structural repairs. However, Valley Water must agree to the costs before starting any work. Should there be any need for major structural repairs, the City would lead efforts to design and implement repairs.
FISCAL IMPACT
Funding for the retaining wall is included in the FY 2025/26 Adopted Budget in Fund 6080 - Wastewater Management Fund under Project 833150 - SCWP Existing Plant Rehabilitation - Split Flow as part of the Sunnyvale Cleanwater Program. The original budgeted estimated cost of the entire perimeter wall in 2020 was $16.5M prior to the decision to construct a joint wall with Valley Water. Valley Water’s cost share contribution was not previously considered. Based on the consulting engineer’s opinion of probable construction cost, Valley Water’s contribution is expected to be approximately $4 million and will be derived from the selected contractor’s price for their joint wall bid item.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Approve the City Manager to execute the West Channel Joint Wall Project: Operation and Maintenance Agreement and Cost Sharing Agreement by and between the City of Sunnyvale and the Santa Clara Valley Water District for Construction of a Joint Wall.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
_X_ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Michaela Donahue, Engineering Assistant II, Public Works
Reviewed by: Marlon Quiambao, Assistant City Engineer, Public Works
Reviewed by: Dennis Ng, Assistant Director, Public Works
Reviewed by: Chip Taylor, Director, Public Works
Reviewed by: Matthew Paulin, Director, Finance
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. West Channel Joint Wall Project: Operation and Maintenance Agreement
2. Cost Sharing Agreement by and between the City of Sunnyvale and the Santa Clara Valley Water District for Construction of a Joint Wall
3. Quitclaim Deed