Title XVI – Water Reclamation and

Reuse

WaterSMART: Water Recycling and Desalination

Planning

Funding for Fiscal Year 2023 

Notice of Funding Opportunity No. R23AS00076 

South County Water Reuse Program Feasibility Study

Santa Clara Valley Water District

February 2023 

Santa Clara Valley Water District

Point of Contact:

David Tucker

Associate Engineer

Recycled and Purified Water Unit

5750 Almaden Expressway

San José, CA 95118

Dtucker@valleywater.org 

Tel: 408-630-3203
Table of Contents

Executive Summary ....................................................................................................................... 1

Applicant ................................................................................................................................. 1

Project Summary and Location.............................................................................................. 1

Technical Project Description........................................................................................................ 2

South County Water Reuse Program Feasibility Study, Financial Capability

Determination, and Pre-Final Design Activities and Coordination................ 3

Task 1 – Project Management..................................................................................... 3

Task 2 – Title XVI Feasibility Study and Report........................................................... 3

Task 3 – Financial Capability Determination .............................................................. 7

Task 4 – Pre-Final Design Activities and Coordination............................................... 7

Task 5 – Grant Administration ..................................................................................... 8

Technical Proposal: Evaluation Criteria........................................................................................ 8

Evaluation Criterion 1 – Project Planning and Analysis (30 points).................................... 8

Subcriterion No. 1a – Water Recycling Needs and Opportunities (15 Points) ......... 8

Subcriterion No. 1b – Evaluation of Project Alternatives (15 Points)......................10

Evaluation Criterion 2 – Stretching Water Supplies (20 points) ....................................... 13

Evaluation Criterion 3 – Environment and Water Quality (20 points)...............................15

Evaluation Criterion 4 – Department of Interior Priorities (15 points)..............................17

Evaluation Criterion 5 – Watershed Perspective (15 points) ............................................19

Required Permits or Approvals ............................................................................................ 21

Project Budget....................................................................................................................... 22

Funding Plan and Letters of Commitment ................................................................ 22

Funding Commitment Letters..................................................................................... 22

Budget Proposal.......................................................................................................... 24

Overlap or Duplication of Effort Statement......................................................................... 28

Uniform Audit Reporting Statement .................................................................................... 28

Conflict of Interest Statement.............................................................................................. 28

Letters of Support................................................................................................................. 29

Official Resolution................................................................................................................. 38

Individual SF-424 Forms ...................................................................................................... 40

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List of Abbreviations

AF acre-feet

AFY acre-feet per year

CEC constituent of emerging

concern

CEQA California Environmental

Quality Act

CoRe Pan Countywide Water Reuse

Master Plan

County Santa Clara County 

CVP Central Valley Project

FAC 09-01 Reclamation Manual

Directives and Standards,

Cost Estimating

Feasibility Study South County Water Reuse

Program Feasibility Study 

Gilroy City of Gilroy 

GWR groundwater recharge

MGD million gallons per day 

Morgan Hill City of Morgan Hill

NEPA National Environmental

Policy Act

NOFO Notice of Funding 

Opportunity 

NPR non-potable reuse

NPR+ blend of tertiary treated

effluent and purified water

to improve recycled water

quality 

O&M operations and

maintenance

O3/BAC ozone and biologically 

activated carbon

Partner Agencies SCRWA, Gilroy, Morgan Hill

PR potable reuse

Reclamation U.S. Bureau of Reclamation

RO reverse osmosis

ROC reverse osmosis

concentrate

RWA raw water augmentation

RWS Regional Water System

SB Senate Bill

SCRWA South County Regional

Wastewater Authority 

Sewershed

SFPUC 

SWA

SWP 

TWA

UWMP

Valley Water

WSMP

WTP 

WTR 11-01

WTR 11-02

WWTP

The area contributing sewer

flows to a wastewater

treatment plant

San Francisco Public

Utilities Commission

surface water

augmentation

State Water Project

treated water augmentation

urban water management

plan

Santa Clara Valley Water

District

Water Supply Master Plan

2040

water treatment plant

U.S. Bureau of Reclamation

Manual Directives and

Standards WTR 11-01

U.S. Bureau of Reclamation

Manual Directives and

Standards WTR 11-02

wastewater treatment plant

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WaterSMART: Water Recycling and

Desalination Planning 

Technical Proposal and Evaluation Criteria

Executive Summary

Applicant 

Santa Clara Valley Water District, San José, California. 

David Tucker, Associate Engineer, Recycled and Purified Water Unit, Santa Clara Valley 

Water District, 5750 Almaden Expressway, San José, CA 95118, Dtucker@valleyWater.org, 

Tel: 408-630-3203.

February 28, 2023 

Project Summary and Location

Summarize the project in one paragraph. Specify the work proposed, including how funds 

will be used to accomplish specific activities, and briefly identify how the proposed activities 

contribute to accomplishing the goals and objectives of this NOFO. 

The Santa Clara Valley Water District (Valley Water), the South County Regional Wastewater

Authority (SCRWA), the City of Gilroy (Gilroy), and the City of Morgan Hill (Morgan Hill) 

(Partner Agencies) have been working together since 1999 to find ways to develop and

broadly distribute high quality recycled water for landscape, agriculture, and industrial uses

in the southern portion of Santa Clara County (County). Recycled water is a reliable source of

water supply that can help alleviate dependence on local groundwater, the sole source of

water supply for both Gilroy and Morgan Hill, and contribute to the long-term water security

of the region. These agencies are nearing completion of an update to their 2015 South 

County Recycled Water Master Plan Update that identified several new reuse opportunities

for the southern portion of the County, including expanded treatment, recycled water

pipelines, and new satellite facilities. Valley Water and the Partner Agencies would like to

use funds from this notice of funding opportunity (NOFO) to further assess these

opportunities, which include both non-potable and potable end uses, through the

development of a Title XVI Feasibility Study. Development of this feasibility study would help

advance planning and preliminary design activities around these new potential projects

which align with the goals and objectives of this NOFO. It is anticipated that the Feasibility 

Study would take up to 24 months to complete and would conclude by October 2025. The

study area will primarily encompass portions of Gilroy and Morgan Hill – Figure 1 identifies

the sewer collection area (sewershed) for both Gilroy and Morgan Hill. The proposed reuse

projects will not modify and/or directly involve any Federal facility or Federal land. 

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Technical Project Description

The project description should describe the 

proposed work, including specific activities that

will be accomplished. Describe the project. As 

part of this discussion, please address the

following: 

• Applicant Category: Please indicate 

whether you are seeking funding for

Funding Group I or Funding Group II

• Eligibility of Applicant: Please write a

narrative summary indicating how the

applicant meets the eligibility

requirements, as described in Section

C.1. Eligible Applicants.

• Goals: Discuss the goals and objectives 

for the proposed activities. 

• Approach: Provide a comprehensive 

description of your planned approach

for this project Figure 1. South County Water Reuse Expansion

Valley Water is a special district that provides Feasibility Study Area

water resources management for the County.

Under this grant application, Valley Water is seeking funding assistance for the following

items:

• Development of the project feasibility study that meets all the requirements of

Reclamation Manual Directives and Standards WTR 11-01 (WTR 11-01);

• Completion of the Financial Capability Determination that meets the criteria of

Reclamation Manual Directives and Standards WTR 11-02 (WTR 11-02); and

• Consultation and coordination on actions needed to complete the environmental

documentation needed for National Environmental Policy Act (NEPA) compliance. 

The proposed study will focus on assessing the feasibility of implementing several of the

new treatment and pipeline reuse projects that were identified as part of an ongoing update

to the 2015 South County Recycled Water Master Plan Update. Since the total project cost is

anticipated to be less than $500 million, Valley Water is seeking funding under Funding

Group I. If deemed feasible, the reuse projects identified through this feasibility study would

help expand the use of recycled water in the region which directly supports Valley Water’s

goal of having recycled and purified water provide for at least 10% of the total County water

demands by 2025. Additionally, as the groundwater management agency for the County, 

Valley Water is responsible for safeguarding the County’s groundwater resources. By

potentially increasing the amount of reuse, these projects would help reduce groundwater

demands and help promote the long-term sustainability of the local groundwater basin. 

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South County Water Reuse Program Feasibility Study, Financial Capability

Determination, and Pre-Final Design Activities and Coordination

The following is the proposed South County Water Reuse Program Feasibility Study scope of

work that provides the entire planning, engineering, environmental, economic, public

information, and administrative management tasks needed to undertake the Feasibility 

Study investigations. Also included is the scope to complete the Financial Capability 

Determination that the U.S. Bureau of Reclamation (Reclamation) requires before Federal

funding for construction activities can be disbursed. The products of this scope of work are

the Feasibility Study and Financial Capability Determination. As noted in the following 

discussion, significant information will be drawn from the planning and preliminary 

engineering work conducted ahead of the preparation of this Feasibility Study. Note that a

more formal consultation with Reclamation is needed to develop the scope and timetable to

complete the environmental documentation for NEPA compliance. 

Task 1 – Project Management 

Task 1.1 Administration

Valley Water is responsible for overall management responsibilities. A prime consultant, 

retained for developing this feasibility study, will manage, compile invoicing, conduct

administration and documentation of the subconsultant’s activities, and report directly to

Valley Water. Valley Water and the prime consultant will hold periodic progress status

meetings and up to three stakeholder workshops to be scheduled at specific milestones

during the Feasibility Study development process. 

Task 1.2 Stakeholder Engagement and Outreach

Stakeholder engagement and outreach is critical to all phases of the proposed project. It

supports planning, environmental, and project development tasks and includes: 

Support of project public outreach and communication needs, 

Stakeholder engagement and relations, and

Public meetings and workshops support. 

Task 2 – Title XVI Feasibility Study and Report

The scope of work supports Valley Water’s intent to prepare a Feasibility Study that will

identify the most feasible program alternatives in accordance with U.S. Bureau of

Reclamation’s WTR 11-01. The tasks below follow the outline of WTR 11-01 and define the

product of the Feasibility Study Report. The sequence of report sections does not necessarily 

represent the sequence of tasks to conduct the study. The studies will build on the planning 

and preliminary engineering work that has been completed to date. 

Task 2.1 Introductory Information

Basic information regarding the project, Valley Water, and the study area will be summarized

based on planning and preliminary engineering studies completed to date and updated with 

available new information. 

Task 2.2 Statement of Problems and Needs

This task provides a description of the study area’s key water resource management

problems and needs for which water reclamation, recycling, or desalination may provide a

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solution. Valley Water plans to leverage information provided in other studies and current

drought and climate data to inform development of the water supply picture in the study

area. The statement of problems and needs will describe: 

Problem and Need for a Water Reclamation, Recycling, or Desalination Project. A broad

view of the study area’s water resources, including challenges such as growing 

population, risks to surface water supplies, groundwater resources, climate change, and

increasingly stringent wastewater discharge requirements.

Current and Projected Water Supplies. Current and projected water supplies for the study 

area (including quantities). 

Current and Projected Water Demands. A summary of current and projected water

demands through 2040; water use by general end use category (e.g., municipal, 

environmental, agricultural); population served and associated water quality 

requirements.

Water Quality Concerns for the Current and Projected Water Supply. A summary of water

quality issues pertaining to water supply (mainly groundwater) and wastewater. 

Current and Projected Wastewater and Disposal Options other than the Proposed Title

XVI project and Plans and Project Costs for New Wastewater Facilities. A summary of

current and projected wastewater amounts (annual and monthly) and disposal options; 

wastewater disposal locations; planned wastewater facility improvements and/or

expansions, including projected costs. 

Task 2.3 Water Reclamation, Recycling, or Desalination Opportunities 

This task will summarize the opportunities for water reclamation, recycling, and desalination

providing the information required for federal requirements specified in WTR 11-01, 

including: 

Uses and market for water reuse. 

Water market available to use recycled water. 

Considerations that may prevent water reclamation, recycling, or desalination program

implementation.

Water and wastewater agencies with jurisdiction in the potential service area or over

source water for reuse. 

Potential reuse source water origin, including impaired surface and groundwaters. 

Location of source water facilities.

Current water reuse volumes, treatment technologies, and opportunities for developing 

improved technologies. 

Task 2.4 Analysis of Alternatives and Feasibility Study Report

The following information is required by WTR 11-01 for the analysis and selection of

alternatives. These topics are required in the Feasibility Study Report. 

Task 2.4.1 Non-Federal Funding Future Actions

This task provides a baseline for the “no project” alternative by identifying actions Valley

Water might take if no federal funding is provided. 

Task 2.4.2 Project Objectives 

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In coordination with Valley Water, the prime consultant will develop a draft framework for

decision-making to use throughout the evaluation and selection of alternatives. The

methodology will include the selection of project objectives (e.g., unit cost of product water, 

regulatory complexity, environmental impacts, water quality, operational complexity, public

support, etc.) and assignment of weighting factors for each objective, which will be used to

evaluate and score alternatives. 

Task 2.4.3 Alternatives Considered

Based on the planning and preliminary engineering work completed to date, three

alternatives including the No Project alternative will be formulated to meet project

objectives. These alternatives will receive a reconnaissance-level analysis, and the project

objectives will be applied to support Valley Water’s selection of the proposed project

alternative in Task 2.4.4. The following subtasks will be conducted to develop information

and costs for the three alternatives:

• Alternative Formulation. The conceptual alternatives will be formulated to meet

objectives and to develop an equitable benefit to Valley Water. 

• Layout of Alternatives. Project layouts of the pipeline routes and locations of the

treatment, wells, storage, pumping facilities, and environmental projects.

• Cost Estimates. Estimated costs will include capital, annual operation and maintenance, 

replacement, and life-cycle costs.

Task 2.4.4 Proposed Project Description

The proposed project will require more detailed definition than the a lternatives in

Task 2.4.3. The proposed Project will be selected by Valley Water applying the objectives

discussed in Task 2.4.2. The following subtasks will be conducted on the proposed project:

• Layout of Alternative. Develop project layouts of the pipeline routes and locations of the

treatment, storage, well, environmental projects and pumping facilities.

• Geotechnical Review. Address existing geologic and geotechnical conditions in a regional

and project-specific context for the proposed infrastructu re. Describe geologic conditions

including topography, stratigraphy, faulting and seismicity. 

• Hydraulic Analysis. Evaluate the hydraulics of the proposed distribution system to

determine the hydraulic grade line under anticipated peak demand month flows . 

• Cost Estimates. Estimate capital, annual operation and maintenance, replacement, and

life-cycle costs. Develop costs as required for feasibility studies in Reclamation Manual

Directives and Standards, Cost Estimating (FAC 09-01). 

• Discharge Requirements. Identify anticipated effluent treatment and disposal water

quality requirements for the proposed Project. 

• Alternative Measures or Technologies. Identify and summarize alternative measures or

technologies available to the project for water reclamation, distribution, and reuse. 

Task 2.4.5 Economic Analysis 

An economic analysis for the project will be conducted, including: 

• A life-cycle cost analysis to compare the three alternatives to determine the most costeffective alternative. The life-cycle costs analysis calculates annual capital costs of

implementing alternatives over a 30-year and 100-year period of analysis using the

current real discount rate and adds annual operations and maintenance costs. 

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• Potentially significant environmental effects 

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and legal requirements. Significant information will be derived from 

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The economic benefits of the proposed project Alternative relative to the No Project

Alternative using other water supply options, assuming costs are readily available. Water

supply benefits of the proposed alternative will be calculated using the avoided costs

from the non-recycled water alternative most likely to be implemented in the absence of

the project. 

In addition, the prime consultant will perform a non-quantifiable benefits analysis to

qualitatively describe the difficult-to-quantify benefits such as drought tolerant water

supply and other social or environmental benefits. These qualitative benefits will be

incorporated as part of the justification for the Project in conjunction with the

comparison of project costs. 

Task 2.4.6 Recommended Project Alternative

Following Tasks 2.4.3 and 2.4.5, the prime consultant will score and rank the alternatives in

coordination with Valley Water and perform a sensitivity analysis to determine the effects of

scores and/or weighting on resulting ranks. Based on the outcome of this exercise, the

prime consultant will recommend a project alternative. 

Task 2.4.7 Environmental Considerations and Potential Effects

This task will provide an overview of anticipated potential environmental effects, regulatory 

requirements, and compliance measures. The analysis will focus on the selected Project

alternative. Final environmental analysis (not part of this task) will be completed after a

finding of feasibility. The project team will address the following topics required by WTR 11-

01 at a reconnaissance level: 

Pote , 

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Status of required environmental compliance measures,

Measures necessary to comply with NEPA and other laws, 

Water supply and water quality,

Public involvement, and/or

Potential effects on historic properties. 

Task 2.4.8 Legal and Institutional Requirements 

This task will describe the project’s institutional framework, interactions with other agencies

the planning-level

engineering work completed to date. The project team will address: 

Water rights issues, 

Legal and institutional issues, 

Multi-jurisdictional or interagency agreements, 

Permitting procedures, 

Current and projected wastewater discharge requirements, and/or

Rights to wastewater. 

Task 2.4.9 Financial Capability of Sponsor

Under this task, the prime consultant will summarize Valley Water’s financial capability to

fund or repay their respective share of costs and identify:

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financially capable of funding the non 

Potential research needs identified during the 

financial analysis. Prior to federal funds being disbursed for project construction activities, a 

financial capability determination must be approved by Reclamation to ensure non 

. This task reflects an update to and expansion of 

• financial statement data to enable Reclamation reviewers to 

• roject cost allocation to reflect the current cost estimate, which defines the 

• federal financing plan and status from 

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• Submit a draft financial capability report to 

review, the financial capability report will be submitted to 

the financial capability report will 

The proposed schedule for implementing the recommended project alternative. 

The willingness of the project sponsor to pay for its share of capital costs and the full

operation, maintenance, and replacement costs.

A plan for funding the recommended project alternative’s construction, operation, 

maintenance, and replacement costs, including analyzing the project sponsor’s funding 

for such costs. 

A description of funding sources and restrictions on such sources. 

Detailed analysis will be provided in the separate Financial Capability Report (Task 3 of this

grant proposal) to demonstrate that Valley Water (the non-federal project sponsor) is

-federal share of the project’s costs before a funding 

agreement covering construction can be executed. 

Task 2.4.10 Research Needs 

project feasibility study will be developed and

summarized. 

Task 3 – Financial Capability Determination

The purpose of the Financial Capability Determination is to develop a Reclamation-approved

-federal

partners can provide their cost share

information provided in the feasibility report. 

Update Valley Water’s

compare project investment costs to existing capital assets, project operation costs to

current operation costs, and annual project revenue requirements to existing revenues.

Update p

federal and non-federal shares for Valley Water. 

Collect information on the non- Valley Water

through emails and phone conference calls, or possibly at a meeting. The plans should

include details and documentation both for funding of the non-federal share of

construction (e.g., loans, grants, bonds) and for any required annual debt service and

annual project operations costs (e.g., user fees and tax assessments). 

Coordinate with Reclamation and possibly meet with Reclamation staff to better

understand review requirements identified in WTR 11-02; this shall be an opportunity to

propose a level analysis based on what Valley Water has available and can provide. 

Valley Water for their review. If requested, 

Valley Water meetings will be scheduled to discuss comments. After making revisions

based on Valley Water

Reclamation. Responses to Reclamation questions and comments will be prepared, and

be revised as necessary.

Task 4 – Pre-Final Design Activities and Coordination

This task will allow Valley Water and the Partner Agencies to work with the Consultant on any 

site-specific investigations to gather design data, environmental and cultural resources

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compliance activities, as-needed pre-final design tasks, and other project related

assessments that contribute towards project implementation. 

Task 5 – Grant Administration

Administration and reporting will be done in coordination with Valley Water as the primary

fiscal agent for this feasibility study. Administration consists of assisting all involved

agencies with completing the feasibility study grant agreements and preparing semi-annual

reports for the duration of this feasibility study.

Technical Proposal: Evaluation Criteria

Evaluation Criterion 1 – Project Planning and Analysis (30 points) 

Subcriterion No. 1a – Water Recycling Needs and Opportunities (15 Points)

1. Describe the problems and needs in the project area. 

Valley Water supplies wholesale water to Santa Clara County’s approximately 2 million

residents and diverse water users, and a safe, reliable supply of clean water is vital for the

environmental, economic, and social well-being of the county. Currently, about half of the

water used in Santa Clara County is imported from outside the county, primarily through the

State Water Project (SWP) and CVP (total about 40%) and the San Francisco Public Utilities

Commission’s (SFPUC) Regional Water System (RWS) to retailers in the northern part of the

county (about 10%). Local supplies make up the balance of overall water use, with about

30% local surface water and groundwater, 5% recycled water, and 15% water conservation. 

Valley Water’s supply portfolio is vulnerable to future severe droughts since it relies primarily 

on imported and local surface water and has limited drought resilient supplies. The greatest

challenge to Valley Water’s water supply reliability is multiple dry years when its main

sources of supply become depleted as drought conditions persist. During the 2012-2016 

drought and the ongoing current drought, Valley Water has faced challenges to meet its

Level of Service goal due to greatly reduced local and imported water supply and had to rely 

on water use reductions and emergency transfers/ purchases to mitigate drought risks.

Valley Water’s water supply challenges are expected to become greater with anticipated

climate change, recurring droughts, growing population and businesses, and increasing 

uncertainty about imported supply reliability. The past and ongoing droughts highlight the

importance of and need for drought resilient supply such as water recycling and desalination

to improve long-term water supply reliability. Therefore, it is imperative that Valley Water

prepare for future droughts with more resilient water supply alternatives to continue

providing Silicon Valley with safe, clean water for a healthy life, environment, and economy. 

2. Describe the current and projected water supplies and demands in the project area; 

include a discussion on supply and demand imbalances. 

Currently, countywide demand is approximately 310,000 AFY on average and projected to

increase to 345,000 in 2045, as estimated by a 2020 Valley Water demand study. Demand

increases will largely be driven by population increase and economic growth. In any given

year, actual availability of each of Valley Water’s existing sources of supply depends on

hydrology, groundwater recharge operations, and conditions, among other factors. Generally, 

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Valley Water’s existing supply is sufficient to meet County-wide demand during normal years,

but during critical dry years and multiple-year droughts, Valley Water faces water shortages

and must rely on short-term actions such as calls for water use reduction and emergency 

transfers. To meet future demand, Valley Water plans to invest in maintenance of existing 

supplies and infrastructure and in a diverse suite of cost-effective projects including recycled

water and potable reuse, stormwater capture, conservation, and new storage identified in its

Water Supply Master Plan 2040 (WSMP). Valley Water’s current projected future demand

scenarios indicate that Valley Water will experience a water shortage starting 2030 without

adding water supply sources. Recycled and purified water is identified as an essential

component of Valley Water’s water supply portfolio to ensure water supply reliability for the

County through 2040. 

Climate change impacts such as warming temperatures, shrinking snowpack, increasing 

weather extremes, and prolonged droughts pose significant challenges for water resources

management. Climate change will impact both Valley Water’s demands and sources of

supply. As weather becomes drier and warmer in the future, Valley Water’s long-range

planning analysis indicates that climate change may increase annual demands to

approximately 360,000-375,000 acre-feet (AF) by mid-century primarily by increasing 

outdoor irrigation needs across all water use sectors and cooling needs in the commercial, 

industrial, and institutional sector. On the supply side, climate change will impact water

supply by changing the volume, timing, and quality of water that is available, both locally and

statewide (imported water). Therefore, climate change will make Valley Water’s problems

worse by increasing its service area demand while decreasing its surface water supply.

Through long-range master planning, Valley Water has been incorporating climate change

impacts into demand projections and future supply analysis. In fact, climate change is one

of key drivers of Valley Water’s long-term investment. Water supply modeling indicates that

locally developed and renewable water supplies such as the proposed treatment and

pipeline reuse projects are the most drought and climate resilient projects, and Valley Water

is prioritizing investments in developing a water reuse program. 

3. Describe how the planning activities will investigate potential uses and markets for

reclaimed or desalinated water (e.g., environmental restoration, fish and wildlife, 

groundwater recharge, municipal, domestic, industrial, agricultural, power generation, and

recreation). 

In South County, the primary uses for reclaimed water are municipal and industrial, and

recycled water use is limited to Gilroy and farmlands nearby in unincorporated Santa Clara

County, though Morgan Hill is also interested in developing reuse as a drought resilient

supply. Reclaimed water supports environmental and agricultural uses indirectly by freeing

up other water supplies.

To identify feasible opportunities for expanding reuse, Valley Water led development of a

Countywide Water Reuse Master Plan (CoRe) Plan for Santa Clara County. Through 

development of the CoRe Plan, Valley Water and participating partners (four wastewater

treatment plants [WWTP] in the county) evaluated a wide range of reuse opportunities by

building upon and integrating existing planning-level studies and reports that identify reuse

projects (potable and non-potable) and demonstrate regional benefit. Additionally, Valley 

Water and its partners identified new projects that show promise in contributing to regional

resilience and Valley Water’s potable reuse goal. Reuse projects were combined into

alternatives (portfolios), primarily distinguished by wastewater source (i.e., Partner Agencies’

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facilities) and reuse type, and then evaluated for feasibility. The CoRe Plan evaluated reuse

alternatives that expand existing recycled water distribution systems for non-potable reuse

(NPR) and explore full advanced treatment (purification) for potable reuse through 

groundwater recharge (GWR), surface water augmentation (SWA), raw water augmentation

(RWA), and/or treated water augmentation (TWA). 

The proposed feasibility study will further build on the work completed as part of the CoRe

Plan, considering changes that have occurred following the plan’s finalization (e.g., 

regulatory framework for direct potable reuse, including RWA and TWA). 

4. Describe the source water that will be considered for the project, including location, 

capacities, existing flows, treatment processes, and quantities of impaired water available

to meet the new reclaimed, recycled, or desalinated water demands. 

The source water to be considered under the proposed feasibility study is treated effluent

from SCRWA, located in Gilroy (Figure

1). The SCRWA WWTP receives

wastewater from two cities: Gilroy and

Morgan Hill. Currently, NPR is only 

delivered in Gilroy and nearby

unincorporated areas of Santa Clara

County.

As part of the CoRe Plan

development, Valley Water Figure 2. Flow balance approach for assessing availability of

coordinated with SCRWA to use a flow source water remaining for purification

balance approach to estimate the

availability of source water (treated

effluent) for purification to support

additional reuse (Figure 2). 

During the summer months, a

portion of wastewater from Morgan

Hill is needed to supply NPR in

Gilroy. On average, 3 million gallons

per day (MGD) of remaining effluent

is available from SCRWA WWTP

(Figure 3). However, if considering 

satellite treatment in Morgan Hill, 

only 2.1 MGD of Morgan Hill’s

wastewater would be available on

average, with minimal flow available Figure 3. Projected flow conditions at SCRWA considering

in the summer months (when projected influent and Gilroy NPR demands

needed to supply NPR in Gilroy). 

Subcriterion No. 1b – Evaluation of Project Alternatives (15 Points) 

1. Describe the objectives that all alternatives will be designed to meet. What other water

supply alternatives and project alternatives will be investigated? 

Alternatives will be evaluated by comparing them to one another based on the following 

criteria that reflect key objectives:

WWTP Non-potable 

(including in-plant uses) 

- Environmental 

flow requirements 

Other losses Remaining effluent 

(e g evaporation) 

10 

8 

7 

6 

~5 

C 

(!I 

~4 

~ 

~ 3 

2 

0 

2.1 mgd (average wastewater! 

available for advanced 

treatment in Morgan Hill) 

Jan Feb Mar Apr May Jun 

Total projected influent 

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Economics, including a comparison of each alternative’s total unit cost (e.g., cost per

acre-foot [$/AF]) reflecting capital, operations and maintenance (O&M), and

replacement (over an extended time period) costs of new treatment and conveyance

facilities; estimated life-cycle costs as a present value and funding capability. 

Groundwater management and countywide supply reliability, including a comparison of

each alternative’s potable reuse water supply (AFY) based on future estimated flows and

design capacity; the number of delivery points included in the alternative; seasonality of

PR supply and delivery point capacity; the dry year drought reliability; and the ability to

protect groundwater basin quality. 

Environmental benefits/impacts and sustainability, including energy consumption, used

as a proxy for reducing carbon footprint and GHG emissions; environmental protection, 

from a wastewater discharge and reverse osmosis concentrate (ROC) management

perspective; and environmental protection, from a more general California

Environmental Quality Act (CEQA) and NEPA perspective. 

Ease of implementation and permitting/regulatory considerations, including each 

alternative having willing partner(s) interested in collaborating, providing ownership of

wastewater, offering operational simplicity, minimizing difficulty in obtaining permits for

PR, minimizing difficulty in obtaining permits for environmental regulations (including 

ROC management and CEQA), being ready to proceed/reducing delays, gaining public

acceptance/support, and supporting environmental and social justice/equity. 

Engineering feasibility, including using tested and proved technology, and meeting other

water quality requirements without difficulty, such as source control and/or monitoring 

requirements.

2. Describe how the planning activities will develop project alternatives (water supply

sources, reuse strategies, or treatment technologies) that have been or will be investigated. 

The proposed feasibility study report will provide a framework for decision-making and

integrated actions to increase the region’s water supply reliability through water reuse. The

approach for developing alternatives will include: 

1. Determine reuse supply availability. Identify sources and amounts of water available for

reuse; the appropriate split between non-potable (NPR) and potable reuse (PR); and

regional, Valley Water, and local-level benefits from NPR and PR. 

2. Identify projects for regional integration. Formulate several project alternatives

composed of project elements in two general categories: conveyance/ distribution

facilities (i.e., pipelines and pump stations) and treatment facilities. Collaborate with 

partners on residuals management, permitting, and land use decisions. Optimize use of

existing supply and infrastructure, improve water system reliability and flexibility, and

explore redefining sewersheds. 

3. Develop alternative layouts and cost estimates. Determine treatment locations, 

treatment level, delivery points (where treated water is delivered for reuse), pipeline

routes, wells, storage, and pumping facilities. Cost estimates will include capital, annual

operation and maintenance, replacement, and life-cycle costs. 

4. Evaluate trade-offs and viability of project alternatives. Determine acceptability, 

efficiency, effectiveness, and completeness of alternatives, and the climate change

impacts of each alternative. Analysis includes effects on the environment and

legal/institutional requirements. 

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5. Solicit input and generate regional support via coordination, third-party review, and

stakeholder outreach. Improve public perception of water reuse through educational

and outreach programs. 

3. Provide a general description of the selected project, including project features, benefits, 

anticipated costs, and analyses conducted. 

A South County Recycled Water Program Feasibility Study centers on using available effluent

from the SCRWA WWTP or a new satellite treatment facility in Morgan Hill to feed a new

advanced water purification facility (AWPF). Alternatively, Valley Water could negotiate an

amendment to an existing agreement with South Bay Water Recycling (SBWR) in the North 

County to import recycled water to Morgan Hill for non-potable reuse (NPR). Depending on

the form of potable reuse selected, recycled or purified water could be delivered to one or

more of the following delivery points:

For NPR+: Extend recycled water pipeline from Metcalf Energy Center to customers in

Morgan Hill; includes a 6-mile pipeline extension and serving peak demands up to 5 

MGD for an estimated annualized NPR demand of 2,900 AFY. SBWR delivers a blend of

tertiary treated effluent and purified water to improve recycled water quality; blended

product water is referred to as NPR+. Estimated capital cost is $70M (in 2019 $). 

For GWR: Recharge Llagas Subbasin using purified water from a satellite WWTP and

AWPF in Morgan Hill (flow diverted from the SCRWA trunk line) in ponds proximate to

Morgan Hill. Estimated capital cost is $125M (in 2019 $), assuming San Pedro Ponds

for preliminary costs. 

For SWA: Augment Anderson Reservoir using purified water from a satellite WWTP and

AWPF in Morgan Hill, pumping to the reservoir for blending and dilution, and subsequent

treating at Santa Teresa and/or Rinconada water treatment plants (WTP). In exchange,

Valley Water could recharge Llagas Subbasin with equal volume of raw water from Santa

Clara Conduit. Estimated capital cost is $145M (in 2019 $), assuming San Pedro Ponds

for preliminary costs. 

For RWA: Morgan Hill and/or Gilroy do not currently have access to a conventional WTP

that treats surface water. Thus, this alternative has not been evaluated previously and

preliminary costs are not available. 

For TWA: Morgan Hill and/or Gilroy could receive purified water for TWA to supplement

water supply. This alternative has not been evaluated previously; thus, preliminary costs

are not available. 

Valley Water has performed preliminary engineering, regulatory review, and cost estimating

for the alternatives related to NPR+, GWR, and SWA.

4. Include a preliminary schedule showing major tasks, milestones, and dates for the 

planning, design, and construction activities related to the project. 

The schedule for the 24-month project is presented in Figure 4. 

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Grant Administration 

Identify Problems and Needs 

Identify Water Reuse Opportunities 

Stakeholder Outreach 

Alternatives Analysis and selection of Title XVI Project 

Alternatives Identification 

Alternatives Layouts and Cost Estimates 

Financial capability Determination 

NEP,1/CEQA Evaluation 

Alternatives Evaluation 

Independent Peer Review 

Feasibility study Report 

Prepare Draft for Reclamation Review 

Reclamation Review Period 

Finalize Report with Reclamation Input 

Submit Final Report 

2023 

Q4 Ql 

-

2024 

Q2 Q3 Q4 Ql 

2025 

Q2 Q3 Q4 

Figure 4. South County Recycled Water Program Feasibility Study Schedule

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Evaluation Criterion 2 – Stretching Water Supplies (20 points)

1. Describe the potential for the project to reduce, postpone, or eliminate the development

of new or expanded non-recycled water supplies. 

South Santa Clara County relies heavily on groundwater. Without expanding water reuse

options, reliance on groundwater would continue to increase with population growth, which

will increase risks of groundwater overdraft and consequently land subsidence. The

population in Morgan Hill alone is anticipated to increase 60% by 2045. Over a future 20-

year period (2025 to 2045), the Morgan Hill UWMP projects groundwater demand will

increase and make up 87-99% of the supply. This presents a potential for demand to exceed

supply in dry years and warrant development of new or expanded non-recycled water

supplies such as additional well construction and imported water. For example, Morgan

Hill’s 2017 Water System Master Plan, describes a plan to install two new groundwater wells

(2,600 AFY total capacity) by 2030 to serve the anticipated population growth. 

Valley Water’s coordination with South County agencies to expand water reuse infrastructure

would have the potential to reduce, postpone, or eliminate the development of new or

expanded non-recycled water supplies by producing advance purified recycled water for

indirect potable reuse and expanding non-potable reuse in South County. Morgan Hill’s

UWMP demonstrates a need for recycled water is projected to grow from zero (current) to

2,900 AF (2045) which would be approximately 20% of the overall potable and non-potable

demand in the area. 

2. Describe the potential for the project to alleviate pressure on existing water supplies 

and/or facilities. 

Water supplies for South County consist of local groundwater and a small amount of

recycled water for Gilroy. Groundwater is pumped from two alluvial subbasins, Llagas and

Coyote Valley. While both have well-managed levels, during periods of drought Valley Water

will request that water suppliers reduce groundwater pumping to avoid overdraft and

minimize subsidence. Pumping can exceed recharge during times of drought and in 2020,

13 
 

 

 

 

 

 

 

 

pumping was above the 5-year average and recharge was below the 5-year average for both 

subbasins. Additionally, in 2021, subbasin monitoring indicated that the groundwater levels

in the Llagas subbasin were 13 feet lower than the 5-year average. 

Valley Water’s coordination with South County agencies to expand water reuse infrastructure

would help reduce the demand for groundwater from each subbasin. Reduced pumping 

during times of drought would help maintain the subbasins at a healthy and sustainable

level. 

3. Describe the potential for the project to make water available to address a specific

concern. Explain the specific concern and its severity. Also explain the role of the project

being investigated in addressing that concern and the extent to which the project will 

address it. 

Valley Water’s coordination with South County agencies to expand water reuse infrastructure

will address water supply reliability concerns. Currently, groundwater is the primary source of

water supply for the South County and highly variable annual precipitation and long periods

of drought could impact the groundwater supply with increased pumping and decreased

recharge rates, making it difficult to maintain the groundwater basins at sustainable levels

while still meeting water demands. Also, imported water, which serves as the main sour of

water for replenishing the groundwater basins, is highly dependent on the hydrologic cycle

and often greatly reduced during times of drought. Furthermore, climate change is likely to

increase water supply demand for irrigation and cooling water due to increased

temperatures.

Currently, recycled water only serves Gilroy and lands nearby in Santa Clara County, and no

infrastructure exists for Morgan Hill to supply it to their potential users. Morgan Hill identified

potential recycled water users through a market assessment and found that future uses

would consist of landscape irrigation, agricultural irrigation, and industrial processes. Valley 

Water’s CoRe Plan also identified opportunities to expand water reuse in the South County 

service area, including Morgan Hill. Expanded water reuse directed towards the projected

uses identified would increase water supply reliability and water supply self-reliance within

the County.

4. Describe the potential for the project to help create additional flexibility to address 

drought. Will water made available by the project being investigated continue to be available

during periods of drought? To what extent is the water made available by the project being 

investigated more drought resistant than alternative water supply options? Explain.

Expanding water reuse throughout the entire South County would create additional flexibility 

to address drought with a sustainable source of water that is more drought resistant than

alternative water supply options. Purified water from a satellite advanced water treatment

plant would allow Morgan Hill to have the opportunity to utilize wastewater through

groundwater recharge, surface water reuse, or non-potable reuse. Additionally, realignments

in Gilroy combined with expanding recycled water infrastructure at the wastewater treatment

plant could provide additional supply to Gilroy and to Morgan Hill where there currently is

none. 

Non-potable reuse and potable reuse with purified water are more drought resistant water

supplies than others because they are not dependent on local or imported water and are

less vulnerable to surface water supply constraints such as minimum flow requirements.

During periods of drought, expansion of water reuse infrastructure will provide the South

14 
 

 

 

 

 

 

 

County more opportunities to offset additional demands on the supply and prevent negative

impacts (e.g., subsidence) to the groundwater basins primarily serving the two cities.

Evaluation Criterion 3 – Environment and Water Quality (20 points)

1. Describe the potential for the project to improve the quality of surface water or

groundwater. 

Disinfected tertiary treated effluent from the SCRWA facility feeds the SCRWA recycled (NPR) 

water system, and remaining effluent is discharged to percolation ponds that allow water to

soak into the soil and slowly recharge the groundwater basin. During the months of

November through April, SCRWA may discharge tertiary treated effluent to the Pajaro River

on an as-needed basis to facilitate safe operation of percolation ponds, provided flow in the

Pajaro River is greater than 180 MGD at the gauging station nearest the outfall and less

than 6,004 MGD at the Chittenden gauging station. 

The proposed project is likely to eliminate the need for wet-weather discharges to the Pajaro

River from the SCRWA WWTP, which could protect surface water quality in the river with 

respect to salts and nutrients. Reducing the use of percolation ponds adjacent to the

SCRWA facility may also improve groundwater quality. 

A potable reuse project would also reduce dependence on groundwater supply and avoid

over-pumping. According to Stanford research in 2018, over pumping in the San Joaquin

Valley Tulare basin led to land subsidence along with releases of naturally occurring arsenic

from clay layers within the aquifer. When water pumping slowed to more sustainable levels,

research suggested that natural recharge from streams and rainfall helped lower arsenic

concentrations again1. A GWR project in Morgan Hill is likely to help maintain or improve

groundwater quality by recharging with high-quality purified water, and an SWA project is

likely to improve groundwater quality by reducing the risk of over-pumping by diversifying 

water supplies. 

According to the Morgan Hill and Gilroy 2020 UWMPs, groundwater levels in Llagas

subbasin were 13 feet lower than the 5-year average, groundwater pumping for 2020 was

6% above the subbasin 5-year average, and groundwater recharging for 2020 was 11% 

lower than the subbasin 5-year average (2015-2020). Although the basin is not an

adjudicated groundwater basin and is not in a condition of overdraft, the Llagas subbasin is

Gilroy’s sole source of potable water and increasing means of recharging this subbasin is

critical for subbasin sustainability, particularly as climate change leads to increased periods

of drought. 

2. Describe the potential for the project to improve effluent quality beyond levels necessary

to meet State or Federal discharge requirements. 

SCRWA’s National Pollutant Discharge Elimination System (NPDES) permit specifies the

average daily flow in the three driest months of each year shall not exceed 8.5 MGD. The

average daily influent flow in the three wettest months shall not exceed 10.8 MGD. Effluent

containing fecal coliform bacteria originating from human sources may not be discharged to

the Pajaro River. By diverting additional effluent for reuse, it is unlikely SCRWA will ever

exceed effluent flow limitations.

1 Citation: Smith R, Knight R, Fendorf S. Overpumping leads to California groundwater arsenic threat. Nat Commun. 2018 

Jun 5;9(1):2089. doi: 10.1038/s41467-018-04475-3. PMID: 29872050; PMCID: PMC5988660. 

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The role of the WWTP has shifted in the context of potable reuse. Whereas it has historically 

sought to make waters suitable for environmental discharge, it is now viewed as the first

and critical barrier to creating a high-quality and consistent feedwater for the AWPF (Olivieri 

et al. 2016, Tchobanoglous et al. 2015). The State Expert Panel recommended that WWTPs

feeding DPR AWPFs provide both biological nutrient removal and tertiary filtration (Olivieri et

al. 2016). Improvements to water quality may:

provide greater degrees of pathogen reduction or inactivation. 

decrease the concentration of organic compounds and constituents of emerging

concern (CECs).

improve the performance of downstream processes.

Ozone and biologically activated carbon (O3/BAC) pre-treatment included in the proposed

treatment train can also improve the quality of the overall effluent stream. O3/BAC breaks

down, biodegrades, and removes organic compounds before the reverse osmosis (RO) 

separates those compounds into the concentrate stream. With O3/BAC pre-treatment, both

the RO feed and the concentrate have lower concentrations of organic contaminant

material. This additional benefit of O3/BAC pre-treatment may allow for easier RO

concentrate management and discharge, particularly regarding the control of toxic organic

compounds and CECs (Kenny, J. et al. 2018).

Advanced treatment of effluent as part of a potable reuse project can assist with salt and

nutrient management for the percolation pond by reducing the volume of effluent and the

overall mass of salt/nutrients discharged. Over a long timescale, reduced salts and nutrients

in the percolation ponds could lead to groundwater quality improvements. 

3. Describe the potential for the project to improve flow conditions in a natural stream

channel. 

Reducing groundwater pumping and recharging the aquifer is likely to improve flow

conditions in the Pajaro River and other local stream channels in South County. 

4. Describe the potential for the project to restore or enhance habitat for non-listed fish and

wildlife species. 

The SCRWA percolation ponds act as a winter refuge for wildlife, particularly many birds. The

following species have been observed within the ponds: Cooper’s Hawk, American Kestrel, 

Loggerhead Shrike, Say’s Phoebe flycatcher, Western Meadowlarks, American Pipits, Redwinged Blackbirds, Savannah Sparrows, Short-billed Gulls, Canvasbacks, Ruddy Ducks,

White-faced Ibis, Black-necked Stilts, Least Sandpipers, and Wilson’s Snipe. 

The proposed project may decrease flows to the ponds in winter by diverting effluent for

reuse, but river habitat may improve with reduced SCRWA effluent discharge to the Pajaro

River. Additional opportunities as part of the project to benefit habitat will be examined as

part of the feasibility study. 

5. Describe the potential for the project to provide water or habitat for federally listed

threatened or endangered species. 

According to the 2020 SCRWA WWTP Facility Expansion Project Environmental Impact

Report, 23 special-status wildlife species exist in the project area, including high profile

federally listed species such as the California Red-legged Frog (threatened), California Tiger

Salamander (threatened), San Joaquin Kit Fox (endangered). Other Federally listed species

16 
 

 

 

 

 

 

 

 

 

 

having predicted habitat in and around Morgan Hill include Western Red Bat, Hoary Bat, 

Yuma myotis, Red-winged Blackbird, Tricolored Blackbird, Burrowing owl, Northern Harrier, 

White-tailed kite, Peregrine falcon, and near Anderson Reservoir, Bald eagles and western

pond turtles. Nesting migratory birds and raptors also use the percolation ponds as

described above. 

The proposed project would minimize discharges to Pajaro River and reduce percolation

pond discharges, which may improve river water quality and benefit special-status fish 

species along with the threatened CA Red-legged frog and CA Tiger Salamander. Additional

opportunities as part of the project to benefit habitat will be examined as part of the

feasibility study. 

Evaluation Criterion 4 – Department of Interior Priorities (15 points) 

Please provide specific details and examples on how the project will address the impacts of

climate change and help combat the climate crisis. 

To adapt to increasing uncertainties and secure a reliable, sustainable water supply for the

region’s future, Valley Water’s Board of Directors set a goal to meet 10% of Santa Clara

County’s total water demands with recycled and purified water for non-potable and potable

reuse by 2025 to improve resilience to future uncertainties, including drought and climate

change. The Board also established a long-term goal of producing a total of 24,000 AFY of

purified water for potable reuse (drinking water) to bolster supplies. Complementing the

potable reuse goal, Valley Water estimates that 28,000 AFY of 2045 demand will be met

with recycled water for NPR.

Does this proposed project strengthen water supply sustainability to increase resilience to

climate change? Does the proposed project contribute to climate change resiliency in other

ways not described above? 

Valley Water currently relies on imported water for about half of its total supply, which is

especially vulnerable to the effects of climate change. To ensure long-term water supply

reliability in facing of climate change, Valley Water must diversify local water supply, and

expand climate resilient, local sources of water, such as reuse and groundwater recharge. 

NPR is a fit-for-use strategy that reduces use of potable supply for purposes that do not

involve human consumption and/or contact. While NPR is an important aspect of water

resources management, the focus of this feasibility study also involves evaluating 

opportunities for purified water to serve potable reuse, which offers the promise of a new

drought-resistant local supply to improve climate change resilience. The delivery point(s) for

purified water will be evaluated through this feasibility study to determine the most

beneficial type of reuse for strengthening resilience in the face of climate change impacts. 

Will the proposed project serve or benefit a disadvantaged or historically underserved

community? Benefits can include, but are not limited to, public health and safety by

addressing water quality, new water supplies, or economic growth opportunities. 

Yes. The proposed project would directly benefit communities that have been identified as

disadvantaged by developing a new water supply in the form of reuse and conversely 

helping to preserve the local groundwater basin, which is the sole source of potable water

supply for South County. Area served by the SCRWA includes several agricultural and

farming operations, many of them are disadvantaged and becoming underserved amid

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Figure 5. Senate Bill 535 Disadvantaged

Communities in Study Area as of 2022 

 

 

 

 

growing uncertainty around water availability and climate change. Expansion of PR and NPR

water availability in this area will improve access to water to such underserved communities. 

Please describe in detail how the community is disadvantaged based on a combination of

variables (see NOFO). 

In 2012 Senate Bill (SB) 535 established initial

requirements for minimum funding levels to

disadvantaged communities as part of

California’s Cap and Trade Program that was

authorized by the California Global Warming 

Solutions Act of 2006. As part of SB 535, the

California Environmental Protection Agency was

tasked with identifying these communities based

on geographic, socioeconomic, public health, and

environmental hazard criteria. As shown in Figure

5, several of these communities can be found in

both Morgan Hill and Gilroy. Communities is the

red shaded areas are considered

disproportionately affected by environmental

pollution and other hazards that can lead to

negative public health effects exposure, or

environmental degradation and contain areas

with concentrations of people that are of low

income, high unemployment, low levels of

homeownership, high rent burden, sensitive

populations, and/or having low levels of

educational attainment. 

If the proposed project is providing benefits to an underserved community, provide

sufficient information to demonstrate that the community meets the underserved definition

in E.O. 13985. 

As shown in Figure 5, the study area contains large portions of communities that are

considered disadvantaged per the criteria under SB 535. The policies under SB 535 are

aimed at improving public health, quality of life and economic opportunity in California’s

most burdened communities, and at the same time, reducing pollution that causes climate

change. Many of these areas are rural, home to minorities, high concentrations of people

with low income, and high rent areas. These are the same populations E.O. 13985 defines

as being “undeserved communities”. 

Does the proposed project directly serve and/or benefit a Tribe? Will the project improve 

water management for an Indian Tribe? 

The proposed project does not directly serve and/or benefit a Tribe, although opportunities

can be examined as part of the Feasibility Study. 

Does the proposed project support Tribal resilience to climate change and drought impacts 

or provide other Tribal benefits such as improved public health and safety by addressing

water quality, new water supplies, or economic growth opportunities? 

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There are no Tribal communities in the project area, although opportunities for Tribal

benefits can be examined as part of the Feasibility Study.

Evaluation Criterion 5 – Watershed Perspective (15 points)

1. Will the proposed project implement a regional or state water plan or an integrated

resource management plan? Explain. 

Yes. The project concepts being proposed for this feasibility study were included in both 

Valley Water’s WSMP and the recently completed CoRe Plan. The WSMP explains Valley

Water’s strategy for providing a reliable and sustainable water supply in a cost-effective

manner. It informs investment decisions by describing the type and level of water supply 

investments Valley Water is planning to make through 2040. Included in the WSMP are a

portfolio of water supply projects that include potable reuse and groundwater recharge

concepts that this feasibility study would aim to help implement. Some of these potential

projects were also included in the CoRe Plan. The CoRe Plan is a regional planning effort

that saw Valley Water partner with cities, water retailers, and stakeholders in the County to

integrate and expand recycled and purified water as a local, reliable, environmentally 

adaptive, drought-resilient water supply. The feasibility study would further assess some of

these reuse concepts and move them closer to implementation.

These potential projects also help advance the goals and objectives of the Pajaro River

Watershed Integrated Regional Water Management Plan by helping to maximize the use of

recycled water and conjunctive use and helping to optimize the use of local groundwater and

imported water supplies. 

2. Will the proposed project help meet the water supply needs of a large geographic area, 

region, or watershed? Explain. 

Yes. The proposed projects would directly help meet the water supply needs of Gilroy and

Morgan Hill (see Figure 1), which form part of the Uvas-Llagas Watershed. The watershed is

approximately 104 square miles, composed of agricultural lands and natural areas. This

watershed forms part of the much larger Pajaro River Watershed that spans approximately 

1,300 square miles and includes portions of Santa Cruz, San Benito, and Monterey 

Counties. 

3. Will the proposed project promote collaborative partnerships to address water-related

issues? Explain. Describe stakeholder involvement in the project planning process. 

Yes. The proposed feasibility study would promote ongoing collaboration efforts between

Valley Water and the Partner Agencies. These agencies have been working together since

1999 with the goal to investigate the feasibility of distributing treated wastewater for

landscape, agriculture, and industrial uses and optimize the value of recycled water in their

own communities. The benefits that recycled water provides the region are well documented

under other criteria in this document. However, of equal importance are the benefits of

learning to work together as a region – beyond service areas, political, and district

boundaries – to understand that all agencies, wastewater authorities, water districts, cities, 

and other relevant stakeholders need to work together on water supply reliability. This

partnership between Valley Water and the Partner Agencies is a successful example of

regional-scale planning and implementation where the benefits of water reuse accrue on

multiple levels. This approach has allowed all parties to collaborate on, identify, and

19 
construct diverse projects that meet multiple needs for the region. It also facilitates

leveraging of local, state, and federal funding sources resulting in local entities realizing 

projects and benefits that would be out of their reach without regional collaboration. 

4. Will the proposed project include public outreach and opportunities for the public to learn

about the project? Explain. 

Yes. Public outreach and education are vital elements of any water reuse project. Valley 

Water’s website (https://www.valleywater.org/your-water/recycled-and-purified-water) offers

educational videos, photos, maps, project descriptions, access to reports and documents,

and education about recycled and purified water. As it pertains to the proposed water reuse

projects, Valley Water and the Partner Agencies plan on developing a thoughtful and

strategic approach to public outreach and communications, for both internal and external

audiences, to inform and educate management and stakeholders. 

20 
South County Water Reuse Program Feasibility Study

Santa Clara Valley Water District

South County Water Reuse Program Feasibility Study

Summary

Federal Non-Federal

6. Budget Object Category Total Cost Estimated Estimated

Amount Amount

a. Personnel $94,836b. Fringe Benefits $77,765c. Travel $0d. Equipment $0e. Supplies $0f. Contractual $400,000g. Construction $0

h. Other Direct Costs $25,759i. Total Direct Costs $598,360j. Indirect Charges $0

Total Costs $598,360 $299,180 $299,180

Cost Share Percentage 50% 50%
Required Permits or Approvals

The permits required for the construction of the proposed project will depend on the final

design selected. The project will likely need to obtain the federal, state, and regional/local

permits summarized in Table 1 (ESA, 2022).

Table 1. Anticipated Permits and Approvals

Anticipated Permit or Approval Agency

Federal

Clean Water Actsection 404 permit U.S. Army Corps of Engineers

Endangered Species Act authorization National Marine Fisheries Service

U.S. Fish and Wildlife Service

Section 106 of the National Historic Preservation Act California Office of Historic Preservation

State

Section 1602 lake and streambed alteration agreement California Department of Fish and Wildlife

Right-of-way permit California Department of Transportation

Approval prior to change of discharge, place of use, and purpose of use of treated wastewater 

State Water Resources Control Board

Clean Water and Drinking Water State Revolving Fund loan

Clean Water Actsection 401 water quality certification

Central Coast Regional Water Quality Porter-Cologne Water Quality Control Act NPDES permit and waste discharge requirements Control Board 

Construction General Permit and Industrial General Permit coverage

Title 22 section 60320.108, Groundwater Replenishment Regulations Central Coast Regional Water Quality

Control Board and State Water Resources

Control Board, Division of Drinking Water 

Regional and Local

Project approval – CEQA lead agency Valley Water 

Well permit(s)

Project approval – CEQA responsible agency

Building Permit

City of Morgan Hill and/or City of Gilroy Sewer Use Permit 

Permanent easement and encroachment permit, approval of traffic control plans

Permit to construct and permit to operate emergencystationary diesel engines Bay Area Air Quality Management District 

Santa Clara Valley Habitat Conservation Plan and Natural Communities Conservation Plan Santa Clara Valley Habitat Agency compliance

Grading permit, approval of traffic control plans Santa Clara County

21 
 

 

 

 

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Project Budget

Funding Plan and Letters of Commitment 

Describe how the non-Federal share of project costs will be obtained. Reclamation will use 

this information when making a determination that the applicant meets the cost share 

requirements identified in C.3 Cost Sharing Requirements. 

The non-federal share of funding for project costs will be covered through Valley Water

revenue from the sale of water to its customers. Table 2 summarizes funding sources for the

proposed project requesting federal funds through this funding opportunity. 

Table 2.Total Project Cost

Funding Sources Amount

Federal: Requested Reclamation funding $299,180

Non-federal $299,180

TOTAL $598,360

Project funding provided by a source other than the applicant shall be supported with letters 

of commitment from these additional sources. Letters of commitment shall identify the 

following elements: 

The amount of funding commitment. 

The date the funds will be available to the applicant. 

Any time constraint on the availably of funds. 

Any other contingencies associated with the funding commitment. 

Commitment letters from third-party funding sources should be submitted with your project

application. If commitment letters are not available at the time of the application

submission, provide a timeline for submitting all commitment letters. Cost-share funding

from sources outside the applicant’s organization (e.g., loans or State grants) should be 

secured and available to the applicant prior to award. 

Reclamation will not execute a financial assistance agreement until non-Federal funding 

has been secured or Reclamation determines that there is enough evidence and likelihood

that non-Federal funds will be available to the applicant after executing the agreement. 

Funding Commitment Letters

No time constraints apply to the non-federal share of project costs, and there are no other

contingencies associated with this funding commitment. 

In addition to Valley Water’s commitment to fund this project, the City of Morgan Hill will

provide non-federal funding in the form of in-kind staff support, as documented in the

funding commitment letter below. 

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OF MORGAN HILL 

Bureau of Reclamation 

Financial Assistance Operations Section 

Attn: NOFO Team 

P.O. Box 25007, MS 84-27133 

Denver, Colorado 80225 

CITY OF MORGAN HILL 

17555 PEAK AVENUE 

MORGAN MILL, CA 9 5037 

PHONE 408-779-7270 

FAX408-779-3117 

WWW.MORGANHJLL.CA.GOV 

February 8, 2023 

Subject: Funding Commitment Letter for the South County Water Reuse Program Feasibility Study Application 

for Funding Assistance under WaterSMART: Water Recycling and Desalination Planning 

(NOFO No. R23AS00076) 

Dear Application Review Committee members: 

The City of Morgan Hill is submitting this letter documenting its funding commitment in support of the South 

County Water Reuse Program Feasibility Study grant application submitted to the Bureau of Reclamation's 

WaterSMART Water Recycling and Desalination Planning funding opportunity for Fiscal Year 2023. 

The City has been working with Valley Water since 1999 to find ways to curve local groundwater demands 

through the expansion of recycled water in South County. This grant would provide an opportunity to evaluate 

the feasibility of further expanding water reuse for our South County communities and improve water supply 

reliability through a drought-resilient supply. We are committed to providing staff support equating to a value of 

$25,759 for the development of the South County Water Reuse Program Feasibility Study to continue this 

regional partnership with Valley Water to find regional solutions that will build drought resilience. 

• The amount of funding commitment - We are committed to providing staff support equating to a value 

of $25,759 to continue ongoing water reuse planning efforts and evaluate the feasibility of further 

expanding reuse for our Silicon Valley communities and improve reliability through a drought-resilient 

supply. 

• The date the funds will be available to the applicant - Our in-kind staff support will be available upon 

execution of the grant agreement between Valley Water and Reclamation, estimated to be October 

2023. 

• Any time constraints on the availability of funds - Our in-kind staff support will continue through the 24-

month duration of developing the feasibility study. 

• Any other contingencies associated with the funding commitment - No other contingencies apply. 

We thank you for your consideration. 

Christina Turner, City Manager 

23 
Budget Proposal

The total project cost is the sum of all allowable costs, including all required cost-sharing 

and voluntary committed cos- sharing and third-party contributions that are necessary to

complete the proposed activities. Include the following chart (Table 3) to summarize all 

funding sources and denote in-kind contributions with an asterisk (*). 

The total project budget is $598,360. Table 3 summarizes the non-federal and federal

funding sources. Valley Water’s funding will be available October 2023, and no time

constraints apply on the availability of funds through the duration of the two-year project

schedule. 

Table 3. Summary of Non Federal and Federal Funding Sources

Funding Sources Amount

Non-Federal Entities

1. Valley Water direct contribution $100,820

2. Valley Water in-kind contribution* $172,601*

3. City of Morgan Hill, third-party in-kind contribution* $25,759*

Non-Federalsubtotal $299,180

REQUESTED Reclamation Funding $299,180

* Asterisk denotes in-kind contribution

The budget proposal should include detailed information on the categories listed below, and

it must clearly identify all items of cost, including those that will be contributed as a nonFederal cost share by the applicant (required and voluntary), third-party in-kind

contributions, and those that will be covered using the funding requested from Reclamation, 

and any requested pre-award costs (table 2). 

The total project cost is summarized in Table 4. 

Table 4.Total Project Cost

Source Amount

Costs to be reimbursed with the requested Federal funding $299,180

Costs to be paid by the applicant $273,421

Value of third-party contributions $25,759

Total project cost $598,360

Total project cost is $598,360. Table 5 summarizes the budget by category, while Table 6 

presents a breakdown of costs and funding source for each category. 

24 
 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5. Budget Summary

Federal Non-Federal

Budget Object Category Total Cost Estimated 

Amount

Estimated 

Amount

a. Personnel $94,836

b. Fringe Benefits $77,765

c. Travel $0

d. Equipment $0

e. Supplies $0

f. Contractual $400,000

g. Construction $0

h. Other Direct Costs $25,759

i.Total Direct Costs $598,360

j. Indirect Charges $0

Total Costs $598,360 $299,180 $299,180

Cost Share Percentage 50% 50%

25 
• 

• 

Table 6. Budget Proposal for Valley Water

Reclamation Recipient

Budget Item Description Qty Unit Unit Cost Funding Funding Total Cost

a. Personnel 1,344 hours -- $- $94,836 $94,836

Senior Project Manager, Hossein Ashktorab 96 hours $101.21/hour -- $9,716 $9,716

Associate Engineer, David Tucker 576 hours $79.05/hour -- $45,533 $45,533

Assistant Engineer 576 hours $61.74/hour $35,562 $35,562

Administrative Assistant 96 hours $41.92/hour -- $4,024 $4,024

b. Fringe Benefits 82 % $46,020 $- $77,765 $77,765

Senior Project Manager, Hossein Ashktorab 82 % $4,858 -- $7,967 $7,967

Associate Engineer, David Tucker 82 % $23,715 $37,337 $37,337

Assistant Engineer 82 % $15,435 -- $29,161 $29,161

Administrative Assistant 82 % $2,012 -- $3,300 $3,300

c. Travel $- $- $-

d. Equipment $- $- $-

e. Supplies/Materials $- $- $-

f. Contractual $299,180 $125,012 $400,000

Lead Consultant for Feasibility Study and $299,180 $820 $300,000 Financial Capability Determination

Facilitator / Stakeholder Engagement and -- $50,000 $50,000 Outreach Consultant

Consultant Pre-Final Design Activities and -- $50,000 $50,000 Coordination

g. Construction $- $- $-

h. Other Direct Costs $- $25,759 $25,759

City of Morgan Hill in-kind staff support -- $25,759 $25,759

i.Total Direct Costs $299,180 $299,180 $598,360

j. Indirect Costs $- $- $-

Total Project Costs $299,180 $299,180 $598,360

Cost Share Percentage 50% 50% 100%

A narrative summary of costs follows. If selected for award, detailed supporting 

documentation of costs will be provided. 

Personnel: The total cost for salaries and wages is $94,836. Valley Water staff will

include a Senior Project Manager, an Associate Engineer, an Assistant Engineer, and an

Administrative Assistant. As the lead applicant, Valley Water will manage Task 5, Grant

Administration and oversee the development of the Feasibility Study, Financial Capability 

Determination, and Pre-Final Design Activities (Tasks 1-4). 

Fringe Benefits: Fringe benefits are anticipated to cost $77,765. The fringe benefit rate

is 82% of staff salary. Fringe benefits for staff include health insurance, employer paid

Medicare taxes, unemployment insurance, employer pension contributions, employer

26 
 

 

 

 

• 

• 

• 

• 

• 

• 

• 

• 

• 

contributions to deferred compensation retirement accounts, life insurance, and

disability insurance. 

Travel: Valley Water will not incur any travel related expenses for this planning project. 

Equipment: Valley Water will not incur any equipment related expenses for planning 

project. 

Supplies: Valley Water is not supplying any supplies for this portion of the project.

Contractual: Valley Water will contract with consultants for the following: 

Lead the development of the Feasibility Study and Financial Capability 

determination. 

Facilitate stakeholder meetings and public outreach efforts. 

Assist with any pre-final design activities or other project related assessments that

contribute towards project implementation.

Budgeted costs for the consultant will be fair and reasonable through assessment of

qualifications, evaluation of rates, and prior experience of professional staff on projects

of similar size and scope. 

Construction: Because this is a planning project, no construction related costs are

anticipated. 

Other Direct Costs: As noted above, in addition to Valley Water’s commitment to fund

this project, the City of Morgan Hill will provide non-federal funding in the form of in-kind

staff support. 

Total Direct Costs: The total direct cost for this funding request is $598,360. 

Indirect Costs: Valley Water will not include indirect costs for this portion of the project. 

Total Costs: The total cost of this funding request is $598,360. 

27 
 

 

 

 

Overlap or Duplication of Effort Statement 

Valley Water is submitting a separate proposal under the Funding Opportunity No. 

R23AS00076 that will address the water reuse needs for San José and Santa Clara through 

the development of the San José-Santa Clara Purified Water Program Feasibility Study.

However, the feasibility studies described in each proposal will be developed by outside

contracted consultants. While it is anticipated that some of the same Valley Water staff will

work on both projects, their involvement will largely consist of project oversight and grant

administration which will make up only a small portion of the overall grant award. 

Uniform Audit Reporting Statement 

Valley Water was required to submit a Single Audit report for the 2021-2022 fiscal year and

that report is available through the Federal Audit Clearinghouse website under the Employer

Identification Number (EIN): 94-1695531. 

Conflict of Interest Statement 

Valley Water, nor any potential subrecipients, have identified any conflicts of interest,

including instances of employees, potential subrecipients, or contractors being related to, 

married to, or having a close personal relationship with any Federal employee in the Federal

funding program or who otherwise may have been involved in the review and selection of the

award. If a conflict of interest arises or is identified during the life of the Federal award, 

Valley Water will immediately provide written notification to the Water Recycling Program. 

28 
• 

• 

• 

• 

Letters of Support 

See the letters of support below from the following:

City of Gilroy; 

City of Morgan Hill; 

City of Santa Clara; and

City of San José. 

29 
Administration Department 

7351 Rosanna Street, Gilroy, California 95020-6197 

Telephone: (408) 846-0202 

http://www.cityofqilroy.org 

February 28, 2023 

Bureau of Reclamation 

Financial Assistance Operations Section 

Attn: NOFO Team 

P.O. Box 25007, MS 84-27133 

Denver, Colorado 80225 

Subject: Letter of Support for the South County Water Reuse Program Feasibility Study 

Application for Funding Assistance under WaterSMART: Water Recycling and 

Desalination Planning (NOFO No. R23AS00076) 

Dear Application Review Committee members: 

The City of Gilroy ardently supports the application that Santa Clara Valley Water 

District (Valley Water) is submitting on behalf of our communities in southern Santa 

Clara County, California, to seek financial assistance through the Bureau of 

Reclamation's WaterSMART Water Recycling and Desalination Planning funding 

opportunity for Fiscal Year 2023. 

Because the South County depends solely on managed groundwater supply for drinking 

water, the City of Gilroy has worked with Valley Water (the county's primary water 

resources agency) over decades to develop recycled water to offset use of the potable 

water supply. The City of Gilroy participated in the development of the South Santa 

Clara County Recycled Water Master Plan Implementation Feasibility Report that was 

funded by a WaterSMART grant awarded to Valley Water and completed in 2009. Since 

the 2009 Feasibility Report was finalized, we have worked with Valley Water to: 

1. Implement recycled water projects, including an expansion of the non-potable 

distribution system in the City of Gilroy; 

2. Consider the potential for serving recycled water to the City of Morgan Hill; and 

3. Consider opportunities (CoRe Plan) for purified water to improve the South 

County's water supply reliability and maintain a sustainable groundwater basin. 

This grant would provide an opportunity to evaluate the feasibility of further expanding 

water reuse for our South County communities and improve water supply reliability 

through a drought-resilient supply. Current regulations enable communities to use 

recycled water for drinking via a reservoir or aquifer, and in 2023, the State Water Board 

will establish direct potable reuse regulations that will allow suppliers to distribute 

recycled water without first putting it into a reservoir or aquifer. 

Jimmy Forbis 

City Administrator 

30
The South County Reuse Feasibility Study would begin by updating the 2009 Feasibility 

Report to reflect existing conditions, based on progress made since 2009. The 

Feasibility Study would also evaluate opportunities to develop recycled or purified water 

for the City of Morgan Hill through either a centralized or decentralized (satellite) 

treatment facility, as well as opportunties to develop purified water for the City of Gilroy. 

Financial support for the development of the Feasibility Study is needed. 

The City of Gilroy is in full support of the development of the South County Water Reuse 

Program Feasibility Study and agrees with Valley Water that regional solutions will build 

drought resilience. 

Sincerely, 

?:/)!'/y/ (--} / / -, / 7 -~ 

Jimmy Forbis, City Administrator 

City of Gilroy 

2 

31 
TY OF MORGAN HILL 

Bureau of Reclamation 

Financial Assistance Operations Section 

Attn: NOFO Team 

P.O. Box 25007, MS 84-27133 

Denver, Colorado 80225 

CITY OF MORGAN HILL 

17555 PEAK AVENUE 

MORGAN H ILL, CA 95037 

PHONE 408 -779- 7270 

FAX408-779 -3117 

WWW.MORGANHILL.CA.GOV 

February 8, 2023 

Subject: Letter of Support for the South County Water Reuse Program Feasibility Study Application 

for Funding Assistance under WaterSMART: Water Recycling and Desalination Planning 

(NOFO No. R23AS00076) 

Dear Application Review Committee members: 

The City of Morgan Hill ardently supports the application that Santa Clara Valley Water District (Valley 

Water) is submitting on behalf of our communities in southern Santa Clara County, California, to seek 

financial assistance through the Bureau of Reclamation's WaterSMART Water Recycling and 

Desalination Planning funding opportunity for Fiscal Year 2023. 

Because the South County depends solely on managed groundwater supply for drinking water, the 

City of Morgan Hill has worked with Valley Water (the county's primary water resources agency) over 

decades to develop recycled water to offset use of the potable water supply. The City of Morgan Hill 

participated in the development of the South Santa Clara County Recycled Water Master Plan 

Implementation Feasibility Report that was funded by a WaterSMART grant awarded to Valley Water 

and completed in 2009. Since the 2009 Feasibility Report was finalized, we have worked with Valley 

Water to: 

1. Implement recycled water projects, including~ an expansion of the non-potable distribution 

system in the City of Gilroy; 

2. Consider the potential for serving recycled water to the City of Morgan Hill; and 

3. Consider opportunities (CoRe Plan) for purifiied water to improve the South County's water 

supply reliability and maintain a sustainable groundwater basin. 

This grant would provide an opportunity to evaluate the feasibility of further expanding water reuse for 

our South County communities and improve water supply reliability through a drought-resilient supply. 

Current regulations enable communities to use recycled water for drinking via a reservoir or aquifer, 

and in 2023, the State Water Board will establish direct potable reuse regulations that will allow 

suppliers to distribute recycled water without first putting it into a reservoir or aquifer. 

The South County Reuse Feasibility Study would begin by updating the 2009 Feasibility Report to 

reflect existing conditions, based on progress made since 2009. The Feasibility Study would also 

evaluate opportunities to develop recycled or purified water for the City of Morgan Hill through either a 

centralized or decentralized (satellite) treatment facility, as well as opportunities to develop purified 

water for the South County. Financial support for the development of the Feasibility Study is 

CI 

32 
CITY OF MORGAN HILL 

CITY OF MORGAN HILL 

17555 PEAK AVENUE 

MORGAN HILL, CA 95037 

PHONE 408-779-7270 

FAX408-779-3117 

WVvW.MORGANHILL.CA.GOV 

The City of Morgan Hill is in full support of the development of the South County Water Reuse 

Program Feasibility Study and agrees with Valley Water that regional solutions will build drought 

resilience. 

Sincerely, 

Christina Turner, City Manager 

33 
City of 

Santa Clara 

The Center or What's Possible 

February 21 , 2023 

Bureau of Reclamation 

Financial Assistance Operations Section 

Attn: NOFO Team 

P.O. Box 25007, MS 84-27133 

Denver, Colorado 80225 

Subject: Letter of Support for the South County Water Reuse Program Feasibility 

Study Application for Funding Assistance under WaterSmart: Water 

Recycling and Desalination Planning 

(NOFO No. R23AS00076) 

Dear Application Review Committee members: 

The City of Santa Clara ardently supports the application that Santa Clara Valley Water District 

(Valley Water) is submitting on behalf of communities in southern Santa Clara County, 

California, to seek financial assistance through the Bureau of Reclamation's WaterSMART 

Water Recycling and Desalination Planning funding opportunity for Fiscal Year 2023. 

Alongside representatives from the County, the City of Santa Clara participated in the 

Countywide Water Reuse Master Plan (CoRe Plan) effort completed by Valley Water in 2021 

and understands the need to improve water supply reliability and groundwater sustainability for 

communities in southern Santa Clara County. Tlhe southern portion of the county depends 

solely on groundwater for drinking water, and water reuse is expected to become an integral 

component of Valley Water's water supply portfolio in the future. 

This grant would provide an opportunity to evaluate the feasibility of furth.er expanding water 

reuse for South County communities and improving water supply reliability through a droughtresilient supply. Current regulations enable communities to use recycled water for drinking via a 

reservoir or aquifer, and in 2023, the State Water Board will establish direct potable reuse 

regulations that will allow suppliers to distribute recycled water without first putting it into a 

reservoir or aquifer. 

The South County Water Reuse Program Feasibility Study would involve revision of the South 

Santa Clara County Recycled Water Master Plan Implementation - Determination of Feasibility 

Report to reflect existing conditions based on progress made since 2009. The Feasibility Study 

would also evaluate opportunities to develop recycled or purified water for the City of Morgan 

Hill through either a centralized or decentralized (satellite) treatment facility, as well as 

1500 Warburton Avenue • Santa Clara, CA 95050 • Phone: 408-615-2210 • Fax: 408-241-6771 • SantaClaraCA.gov 

City Manager's Office 

34 
Bureau of Reclamation Financial Assistance Operations Section 

Re: Letter of Support for the South County Water Reuse Program Feasibility Study Application for 

Funding Assistance (NOFO No. R23AS00076) 

February 21, 2023 

Page 2 of 2 

opportunties to develop purified water for Gilroy. Financial support for the development of the 

Feasibility Study is needed. 

The City of Santa Clara is in full support of the development of the South County Water Reuse 

Program Feasibility Study and agrees with Valley Water that regional solutions are needed to 

build drought resilience. 

Sincerely, 

Office of the City Manager 

City of Santa Clara 

35
CITYOF A 

SANJOSE 

CAPITAL OP SILICON VALLEY 

February 27, 2023 

Bureau of Reclamation 

Financial Assistance Operations Section 

Attn: NOFO Team 

P.O. Box 25007, MS 84-27133 

Denver, Colorado 80225 

RE: Letter ofSuppott for the South County Water Reuse Program Feasibility Study Application 

for Ftmding Assistance under WaterSMART: Water Recycling and Desalination Planning 

(NOFO No. R23AS00076) 

Dear Application Review Committee members: 

The City of San Jose supports the application that Santa Clara Valley Water District (Valley 

Water) is submitting on behalf of communities in southern Santa Clara Cotrnty, California, to 

seek financial assistance through the Bureau of Reclamation's WaterSMART Water Recycling 

and Desalination Planning funding opportunity for fiscal Year 2023. 

Alongside representatives from Santa Clara, the City of San Jose participated in the Countyv.ride 

Water Reuse Master Plan (CoRc Plan) effort completed by Valley Water in 2021 and 

trnderstands the need to improve water supply reliability and groundwater sustainability for 

conummities in southern Santa Clara County. The southern portion of the county depends solely 

on groundwater for drinking water, and water reuse is expected to become an integral component 

of Valley Water's water supply portfolio in the future. 

This grant would provide an opportunity to evaluate the feasibility of further expanding water 

reuse for southern Santa Clara Cow1ty communities and improving water supply reliability 

through a drought-resilient supply. Current regulations enable communities to use recycled water 

for drinking via a reservoir or aquifer, and in 2023, the State Water Board will establish direct 

potable reuse regulations that will allow suppliers to distribute recycled water without first 

putting it into a reservoir or aquifer. 

The South County Water Reuse Program Feasibility Study would involve revision of the South 

Santa Clara County Recycled Water Master Plan Implementation - Determination of Feasibility 

Report to reflect existing conditions based on progress made since 2009. The Feasibility Study 

would also evaluate opp01tunities to develop recycled or purified water for the City of Morgan 

Hill through either a centralized or decentralized (satellite) treatment facility, as well as 

opportunities to develop purified water for the City of Gilroy. Financial support for the 

development of the Feasibility Study is needed. 

Office of the City Manager 

200 East Santa Clam St. Fl. # 17, San Jose. CA 951 13 tel ( 408) 535-8100 www.sanjoseca.gov 

36 
The City of San Jose fully supports the development of the South County Water Reuse Program 

Feasibility Study and agrees with Valley Water that regional solutions are needed to build 

drought resilience. 

Sincerely, 

Sarah Zarate 

Director, Office of Administration, Policy, 

and lntergovemmental Relations 

37
Official Resolution

The Valley Water official resolution is attached on the following pages. 

38
DocuSign Envelope ID: 1E1882A9-95C6-4370-9191-6426EF5842B5 

BOARD OF DIRECTORS 

SANTA CLARA VALLEY WATER DISTRICT 

RESOLUTION NO. 23-011 

AUTHORIZING SUBMISSION OF A GRANT APPLICATION TO THE UNITED STATES 

BUREAU OF RECLAMATION WATERSMART WATER RECYCLING AND DESALINATION 

PLANNING GRANT PROGRAM FOR UP TO $1,000,000 AND, IF AWARDED, DELEGATE 

AUTHORITY TO THE CHIEF EXECUTIVE OFFICER OR DESIGNEE, TO NEGOTIATE AND 

EXECUTE A GRANT AGREEMENT AND ANY AMENDMENTS THERETO, FOR A 

SOUTH COUNTY WATER REUSE PROGRAM FEASIBILITY STUDY 

WHEREAS, the Santa Clara Valley Water District (Valley Water) seeks external funding for a 

planning grant to support a South County Water Reuse Program Feasibility Study (Project) to 

evaluate and analyze the potential for a water recycling project; and 

WHEREAS, the United States Bureau of Reclamation (USBR) Water Recycling and 

Desalination Planning Grant Program is currently accepting financial assistance planning grant 

applications for projects such as Valley Water's; and 

WHEREAS, as a condition of the grant application, USBR requires submission of a Resolution 

adopted by Valley Water's Board of Directors authorizing staff to submit the application. 

NOW, THEREFORE BE IT RESOLVED that the Board of Directors of the Santa Clara Valley 

Water District does hereby: 

1. Authorize the Chief Executive Officer (CEO), or designee, to apply for grant funds in 

the amount of $1,000,000 and, if awarded, negotiate and execute a Grant Agreement 

with the U.S. Bureau of Reclamation (USBR) to support the South County Water Reuse 

Program Feasibility Study Project, provided all grant requirements can be met; and 

2. Authorize the CEO, or designee, including the Chief Financial Officer (CFO), to sign and 

submit invoices to USBR for grant fund reimbursements, to be made pursuant to the 

Grant Agreement; and 

3. Authorize the CEO or designee to provide management and support services required 

for the performance of the work and administration, pursuant to the Grant Agreement, as 

deemed necessary and appropriate. 

PASSED AND ADOPTED by the Board of Directors of the Santa Clara Valley Water District by 

the following vote on February 14, 2023: 

AYES: Directors Estremera, Santos, Beall, Eisenberg, Hsueh, Keegan, Varela 

NOES: Directors None. 

ABSENT: Directors None. 

ABSTAIN: Directors None. 

SANTA CLARA VALLEY WATER DISTRICT 

1/0ocuSigne-d by: 

_0.6a!J:~ 

JOHN L. VARELA 

Chair, Board of Directors 

ATTEST: MICHELE L. KING, CMC 

G

OocuSigned by: 

1},~ 21 /417 • 7E16J2DB093E40C.-

(_;ierl<, tjOard or uirectors 

RL14968 

39 
Individual SF-424 Forms

Included below are the SF-424, SF-424A, SF-424B, and SF-LLL forms. 

40