REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager, or Designee, to Execute the Regulatory Agreement Between the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) and the City of Sunnyvale for Sales Tax Exemption on Qualified Recycling Equipment for the SMaRT Station(r) NextGen Project
Report
REPORT IN BRIEF
Staff applied for and received a $2.13M sales tax exemption for the Sunnyvale Materials Recovery and Transfer (SMaRT) Station equipment procured under the NextGen Project. CAEATFA's board of directors approved Sunnyvale's application on December 9, 2025. This approval reduces the overall project cost, thereby lowering the financial impact on ratepayers in Sunnyvale and Mountain View.
BACKGROUND
The SMaRT Station is currently undergoing a $51 million capital improvement project known as the NextGen Project. The goal of this project is to identify, select, and install state-of-the-art systems to replace outdated and malfunctioning equipment, enhance overall processing efficiency, increase automation, and significantly expand the Station's waste diversion. The project is funded by municipal bonds issued in November 2025 and a $6.575 M CalRecycle grant.
To further offset the capital costs, staff applied for and was granted a sales tax exemption through the CAEATFA program for qualified recycling equipment. As a result of this exemption, the City will only pay a 0.645% sales tax rate (instead of the normal 9.125%) to the selected equipment vendors.
The Regulatory Agreement associated with the exemption has a three-year term, aligning with the anticipated completion of the NextGen Project, which is expected to be completed by December 2026.
EXISTING POLICY
Council Policy 7.1C.2.3- Funding Policies: 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 action is exempt from the California E...
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