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SUPPLEMENTAL MATERIAL March 5, 2024 Responses to City Council agenda items — March 5, 2024 Agenda Item #14 Q: What is the $19 million going to be spent on? The report only mentions the —$1 million for the defeasance, where is the other $18M going? A: The $19 million will be allocated to use $14 million for the three pipe improvement locations on Bernal Avenue, Stoneridge Drive, and Sunol Blvd, as well as the new booster station and turnout#4 at the corner of Stoneridge Drive and Hopyard Road. An additional $4 million is for regional groundwater exploration/design work with Zone 7 for new ground wells to pump the City's groundwater quota. Q: What is the basis for the increased costs? If it is the initial $6 million staff estimated during then and now it's $19 million (or $18 million without the defeasance), that's a 300% increase without any mention of it in the staff report. Did the scope change? A: When the water rate study process began, the assumptions had to be fixed so the $6 million estimate was based on a booster station at T-4 without increasing capacity and minor piping, along with initial funding to design the water supply alternative project. The model and modeling were not done at that time and Wells 5 & 6 were still in operation. That information changed as we developed additional details during the rate approval process; however, $6 million could not be adjusted without redoing the rate study and Prop 218 process. This would have taken additional time, delaying the rate increase well into 2024. As it was, last year the City did not meet its debt covenant for one loan and almost missed meeting it for the State Revolving Fund loan which would have put us in jeopardy of applying for a SRF loan now. As well, the approved 30%/12% water rate increases do not provide the $6 million. Q: What is the status of allocating/spending the $19 million? We've approved the pipe upgrade over the Bernal bridge near Fire Station 1 — How much was that? Is that part of these funds? A: Yes, the Bernal Avenue Pipeline, CIP 27172 total project expenditures of$2,205,420 are included in the $19 million. Q: This funding shows you'd sell / receive funds in June (please confirm) so when would the projects be bid, awarded, completed? Have we missed this summer 2024? A: The award of the Stoneridge and Sunol Boulevard construction contract will be on the March 19 City Council agenda. Although all the pipelines will not be completed and put in service prior to this summer's peak demands, critical tie-ins will be completed before the summer demands (so as to not impact operations). Should there be a