Santa Clara outlines $157m sewer CIP, forecasts debt issuance for joint wastewater plant

Santa Clara outlines $157m sewer CIP, forecasts debt issuance for joint wastewater plantThe California city’s proposed 5-year capital improvement program relies heavily on utility investments, featuring major allocations for sewer rehabilitation, recycled water expansion, and stormwater flood control.

The proposed 5-year CIP dedicates $157 million to the sewer utility, covering collection system inspections and major upgrades to the wastewater treatment plant co-owned with San Jose.

Finance Director Ken Lee noted that while current improvements are ratepayer-funded, an additional debt issuance will be required within the 5-year planning cycle to support the treatment plant rebuild.

The water system is slated for $24 million in investments, supporting a network where recycled water currently accounts for 20% of the city's total water sales.

Stormwater infrastructure will receive $4.5 million over five years, though officials acknowledge hundreds of millions in unfunded needs remain from a previous master plan.

On May 5, 2026, the Santa Clara City Council reviewed its proposed FY 2026-28 Biennial Capital Improvement Program (CIP) and 10-year financial forecast, revealing a heavy capital reliance on utility infrastructure. According to Director of Finance Ken Lee, 84% of the city's CIP is focused on utility services. The sewer utility is slated for $157 million in improvements over the 5-year planning period. This funding covers ongoing video inspections, collection system cleaning, and significant capital upgrades at the regional wastewater treatment plant co-owned with the City of San Jose. Lee informed the council that while the sewer utility is funded largely through ratepayers, the scale of the treatment plant improvements will require an additional debt issuance within the next five years. Acknowledging the complexity of the wastewater investments, Councilmember Hardy noted the logistical challenges of the joint facility project, stating, "We're having to rebuild the entire treatment plant while we're still running it." On the supply side, the CIP allocates approximately $24 million for water and recycled water infrastructure, including tanks and distribution pipes. Lee highlighted the importance of the city's reuse network, noting that 20% of the city's water sold is recycled water, making continued business connections to the system a priority. In a separate consent agenda item during the meeting, the council also authorized the City Manager to enter into an Exclusive Negotiating Agreement with Valley Water for the development of the Pure Water Silicon Valley Project. For stormwater management, the general fund will supplement bond revenues to invest $4.5 million over five years in pump and lift station maintenance for 10-year and 100-year flood protection. However, Lee cautioned that a stormwater master plan completed six to eight years ago identified hundreds of millions of dollars in unfunded needs, leaving a significant gap in the city's long-term flood control infrastructure.