REPORT TO COUNCIL
SUBJECT
Title
Update on Measure I - Santa Clara’s Public Facilities and Infrastructure Bond Measure Work Plan, Implementation Schedule, and Request for Direction on the Appointment Process and Terms for the Measure I Bond Compliance Oversight Committee
Report
BACKGROUND
On November 5, 2024, voters in the City of Santa Clara approved ballot Measure I, the Public Facilities and Infrastructure Bond Measure. This general obligation bond authorizes the issuance of $400 million to help address over $600 million in unfunded infrastructure needs, including aging fire stations, storm drain systems, and aquatic facilities. City staff have identified priority projects within the Expenditure Plan (Attachment 1), and the bond funding will provide a clear path forward for making essential repairs and improvements across Santa Clara.
The plan includes the following specific projects and estimated delivery costs. The project areas are:
• Fire Stations and Emergency Response ($142,235,450)
• Parks, Libraries, Senior Center, and Aquatics Facilities ($115,258,750)
• Stormdrain System Improvements ($46,000,000)
• Police Facilities ($43,987,500)
• Streets and Transportation ($41,170,000)
• Historic Buildings and Beautification ($9,200,000)
DISCUSSION
The $400 million bond marks a significant milestone for the City and its ability to make significant capital improvements throughout the City. The City is working on several initiatives to support efforts to advance Measure I projects. Below is a list of ongoing activities and a detailed strategy for moving the Measure I program forward.
Measure I Leadership Team
The City Manager has established an internal leadership team to oversee the Measure I program, consisting of the Capital Projects Program Manager, the Director of Public Works, and the Finance Director. This team is responsible for providing oversight, making key decisions, and setting the strategic direction for the Measure I program.
The City is currently hiring a Capital Project Program Manager to oversee the implementation of Measure I infrastructure projects. This role will coordinate across multiple departments to manage project objectives, priorities, schedules, and budgets. Additionally, the Program Manager will provide regular updates to the City Council, ensuring transparency and highlighting the impact of each initiative. The recruitment period closes on April 18.
Department of Public Works (DPW)
The Director of Public Works and the Public Works team will play a vital role in coordinating and implementing Measure I projects. Working closely with the Capital Projects Program Manager, the Department of Public Works will collaborate with various departments to ensure efficient project execution. They will also hold regular meetings with project teams to monitor progress, address challenges, and keep initiatives on track.
Bond Administration Team
The Director of Finance will lead the bond administration team, overseeing the timing and issuance of bonds, fund budgeting, debt repayment, and the tracking of revenues, encumbrances, and expenditures, all while ensuring compliance with state and federal regulations. Staff will work closely with the bond administration team to facilitate project approvals and ensure timely reimbursements to the Department of Finance for bond-related expenditures. In preparation for the Measure I Bond, City staff recommended and the City Council appointed Jones Hall, A Professional Law Corporation-a nationally recognized bond counsel firm-to serve as bond counsel, and Public Financial Management to serve as municipal advisor for the bond election and subsequent issuances. Both firms play a crucial role in supporting the Bond Administration Team.
Measure I Bond Compliance Oversight Committee
As required by Measure I, the City is establishing a Bond Compliance Oversight Committee (Committee) to ensure transparency and accountability in the implementation of Measure I projects. The role of the Committee is to:
1. Ensure that project implementation aligns with all bond measure requirements, including the terms of the Expenditure Plan.
2. Review and report on annual audits.
3. Review and provide recommendations to the City Council on any proposed amendments to the Expenditure Plan.
4. Inform the public about the expenditure of bond proceeds.
Per the Measure I Ordinance, Attachment 2, the Committee will consist of nine (9) members selected through a lottery process and appointed by the City Council. The Council's appointment serves as a ratification of the lottery process and confirmation that the selection aligns with the criteria outlined in the ordinance. The Committee will include:
• Seven residents of the City. No application or appointment criteria was provided for in the Ordinance.
• One large business representative and one small business representative, neither of whom must be residents but must be owners or employees of businesses headquartered within the City.
• Business representatives must not be employed by or have previously worked for a firm that provides services to any professional sports teams within the City.
Additional Considerations for the Committee
The City seeks further direction regarding the lottery process and term limits:
1. Citywide vs. District Lottery Process: The ordinance requires that seven resident members be chosen by a lottery method, but it did not designate additional requirements. As with our other commissions, City Council should determine if the lottery will be structured with district seats (i.e. six (6) district seats and one (1) citywide seat, which aligns to how the City Council is structured), or if all seven (7) seats will be chosen irrespective of district residency.
2. Term Limits: The proposed term structure follows the City's policies and practices with other commissions, allowing members to serve two full four-year terms. Also consistent with City policies and practices, to ensure continuity and prevent all seats from being vacated simultaneously, initial appointments will be staggered as follows:
• Two-year term for representatives from Districts 1, 3, and 5, and Small Business Representative
• Four-year term for representatives from Districts 2, 4, 6, the at-large seat, and Large Business Representative
Those members serving an initial two-year term will be eligible to serve up to two additional four-year terms.
The City is currently recruiting members for the Committee, with the recruitment period concluding on April 29th. The lottery is anticipated to be conducted in May, with City Council confirmation expected in early June. The City Council may delay its decision on a citywide or district-based lottery process until after the application period closes and it is known if there is one or multiple applicants for each district.
Bond Issuance:
The bond issuance process requires collaboration with the City’s financial advisor to competitively select an underwriter and bring the bonds to market. Once this process is complete, the City will receive the initial bond proceeds to fund phases of the projects outlined in the Measure I program. Given the scale of the bond projects and the time needed to finalize design and construction documents, the bonds are expected to be issued in multiple tranches over time. Projects with an identified scope of work will be initiated using the first tranche of funding, while more complex projects or projects currently without a defined scope of work - will be funded in subsequent tranches.
In accordance with IRS regulations, although there is some flexibility, the City must generally expend the proceeds from each bond issuance within three years. Staff plans to bring a resolution to authorize a tax levy, in accordance with the terms included in Measure I, in June, with the bond issuance targeted for early Fall 2025. Subsequent issuances will be made until the full $400 million in Measure I bonds are issued and, to the maximum extent possible, all projects identified in the Expenditure Plan are completed. The City cannot receive bond proceeds until the property tax levy is placed on the tax roll by the County Assessor, which occurs in August 2025.
In preparation for the initial issuance, additional staff are being hired and it is anticipated that budget actions will be introduced to enable those new staff to begin preliminary work in the Summer 2025. This includes developing scope of works and RFP documents for hiring design consultants. Additionally, preliminary design and engineering costs incurred before the bond issuance may be eligible for reimbursement from bond proceeds once the bonds are issued.
Capital Projects Delivery Program
Recognizing that undertaking $400 million in capital projects is a significant effort, City staff has begun prioritizing the proposed infrastructure projects outlined in the Expenditure Plan. To ensure a structured and efficient approach, projects have been categorized into three types:
1. Type 1 - Design-Ready Projects
The Department of Public Works has identified projects that are ready to be designed and are ready to proceed with immediate initial funding. These projects will be prioritized in the first bond issuance to allow them to begin without delay. These types of projects include roadway paving, ADA improvements, creek trail rehabilitation, and storm drain system improvements
2. Type 2 - Projects requiring conceptual design efforts
Type 2 projects are multi-year initiatives that are larger or more complex and require additional time to finalize design concepts. These projects require additional preliminary work before design can commence. Staff will identify and prioritize these projects accordingly. These types of projects include park improvements, pump stations, and fire stations.
3. Type 3 - Projects requiring further definition, planning, and feasibility analysis prior to design
Type 3 projects require additional study, planning, and feasibility assessments before the design phase can begin. These projects may include police facilities, libraries, senior center, historic buildings, and additional park projects that have yet to be identified.
International Swim Center: As outlined in RTC 25-140, the initial design and construction improvements for the International Swim Center (ISC)-including the restoration of the three swimming pools and dive tower-would be funded through the first tranche of approximately $10 million from the $45 million allocated for aquatics-related projects. Additional aquatic facility enhancements with the remaining allocation may include further improvements to the ISC, as well as upgrades to the Warburton Swim Center, Mary Gomez Swim Center, and the Senior Center Natatorium.
Categorizing projects in this manner allows the City to begin work on design ready initiatives while simultaneously planning and prioritizing feasibility and design efforts for the remaining projects. Given the increased workload, particularly within the Department of Public Works, staff are evaluating its staffing model to ensure adequate resources are available to support the Measure I bond program.
Once reviewed by the Committee and approved by the City Council, staff are prepared to initiate work on the projects included in the initial tranche of bond proceeds by early 2026. A proposed project list and estimated budget for the first bond issuance will be presented later this year.
In anticipation of the issuance of bonds, staff will return to the City Council before the end of the Fiscal Year with a Resolution of to authorize a tax levy, in accordance with the terms included in Measure I, to be provided to the Santa Clara County for incorporation into the upcoming property tax roll. We will also be coordinating training sessions for both the Committee and the City Council on the fiduciary roles and responsibilities for the oversight of the bonds.
|
Meetings |
Date |
|
Selection of Bond Compliance Oversight Committee |
May 2025 |
|
Approval of Bond Compliance Oversight Committee |
May/June 2025 |
|
COC/Council Bond Training |
June 2025 |
|
Resolution Authorization of Tax Levy to be provided to Santa Clara County |
June 2025 |
|
COC Meeting |
August 2025 |
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is an administrative activity that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT
These is no fiscal impact for oversight of the Measure I Bond Measure program other than staff time.
COORDINATION
This report has been coordinated with the Finance Department, Department of Public Works, and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. The City Council note and file the Measure I update report.
2. The City Council take the following actions with respect to the Measure I Citizen’s Oversight Committee:
a. Approve the criteria that 6 of the 7 residents serving on the Citizen’s Oversight Committee be selected by District so that all 6 Council Districts are represented.
b. Stagger the Citizen’s Oversight Committee representative terms as follows:
i. Initial Two-year term for representatives from Districts 1, 3, and 5, and Small Business Representative
ii. Initial Four-year terms for representatives from Districts 2, 4, 6, the at-large seat, and Large Business Representative
All Committee Members shall be entitled to serve up to 2 full-four year terms. Those members serving an initial two-year term will be eligible to serve up to two additional four-year terms.
Staff
Reviewed by: Elizabeht Klotz, Assistant City Manager
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Expenditure Plan
2. Ordinance No 2069