PREPARED BY: AMANDA BOOTH DATE OF MEETING: 06/15/2026
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO TO (1) AUTHORIZE PARTICIPATION IN THE CONTRA COSTA COUNTY REGIONAL ALTERNATIVE COMPLIANCE (RAC) JOINT POWERS AUTHORITY (JPA); (2) APPROVE THE PROPOSED JOINT POWERS AGREEMENT AND AUTHORIZE THE CITY MANAGER TO EXECUTE THE AGREEMENT; (3) APPOINT THE ENVIRONMENTAL PROGRAM MANAGER AS THE JPA BOARD REPRESENTATIVE AND THE ENVIRONMENTAL PROGRAM ANALYST AS THE ALTERNATE; (4) DIRECT STAFF TO TAKE ALL NECESSARY ACTIONS TO PARTICIPATE IN THE RAC SYSTEM, INCLUDING AMENDING THE CITY’S STORMWATER ORDINANCE; (5) AUTHORIZE THE RAC JPA TO TAKE ALL NECESSARY ACTIONS TO ESTABLISH ONE OR MORE COMMUNITY FACILITIES DISTRICTS (CFD); AND (6) DIRECT STAFF TO DEVELOP REPORTS ON THE JPA/CFD PROGRESS TO BE PRESENTED TO THE CITY COUNCIL ANNUALLY
CEQA: This proposed action is not a project as defined by CEQA
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
FY 2023-2025 Council Priority Workplan Compliance Statements:
Item 202: Identify and implement Long-Term Environmental Stewardship Goals, is a major policy goal contained in the FY 2025-27 City Council Priority Workplan, adopted April 7, 2025.
BACKGROUND
Action Summary
The Contra Costa Clean Water Program (CCCWP) was established in 1991 by Contra Costa municipalities in anticipation of municipal stormwater permitting requirements under the federal Clean Water Act and California water quality laws, with encouragement from regional water regulators. CCCWP is a collaborative program composed of 19 Contra Costa cities and towns, unincorporated Contra Costa County, and the Flood Control and Water Conservation District, whose main objective is to jointly implement National Pollutant Discharge Elimination System (NPDES) stormwater permit requirements. Some permit provisions are most cost-effective to implement on a regional basis, such as water quality monitoring, public education, and special studies.
The Contra Costa County Regional Alternative Compliance (RAC) System is an innovative, regionally supported approach to fulfilling state-mandated stormwater treatment obligations. Developed through a partnership between CCCWP, the U.S. Environmental Protection Agency (EPA), and the San Francisco Bay Regional Water Quality Control Board (“San Francisco Bay Water Board”), the RAC System provides an off-site, alternate compliance mechanism for the Green Stormwater Infrastructure (GSI) that would normally be required on-site. The RAC System allows both public agencies and private developers to purchase “compliance units” generated by certified Off-Site GSI projects constructed elsewhere in Contra Costa County. These units represent an equivalent amount of stormwater treatment required for regulatory compliance.
The RAC System addresses long-standing challenges: constrained development sites, high costs of distributed GSI projects, and the need to target legacy pollutant areas. Participation in the RAC System is enabled through a new JPA, which provides administrative support, financial mechanisms, and the governance structure necessary to manage Off-Site GSI projects and maintain ongoing compliance. Importantly, the JPA would enable the participating agencies to levy a special tax under the Mello-Roos Community Facilities Act of 1982, as amended (Mello-Roos Act), on private properties that voluntarily choose to participate in the RAC System (Participating Properties) to fund maintenance of the Off-Site GSI projects.
Pursuant to the Mello-Roos Act, in order for the JPA to form a Community Facilities District (CFD) that may include Participating Properties in the City (either at the time of CFD formation or by annexation to the CFD) and levy special taxes to finance maintenance of Off-Site GSI projects, the JPA and the City must enter into a joint community facilities agreement or joint exercise of powers agreement.
Permit Compliance Background
The National Pollutant Discharge Elimination System (NPDES) regional stormwater permit, known as the Municipal Regional Stormwater Permit (MRP), imposes several obligations on local governments. Under Provision C.3.d, regulated new development and redevelopment projects must incorporate on-site Low Impact Development (LID) or GSI to treat stormwater before it reaches local waterways. Many sites, particularly small infill properties, parcels with steep slopes, or locations with underground utility conflicts, face serious constraints that make on-site treatment difficult or infeasible.
In addition, under MRP Provision C.3.j, municipalities must retrofit a quantifiable amount of existing impervious surface with GSI over the permit term. For the City of San Pablo, this amount is currently 1.86 acres during this 4-year permit term cycle. This requirement can be costly and resource-intensive when implemented through numerous small, distributed projects. Furthermore, cities must comply with pollutant load reduction targets under the Polychlorinated Biphenyls (PCBs) Total Maximum Daily Load (TMDL) (NPDES Provision C.12.c), which require locating stormwater treatment facilities in areas with historically high pollutant loads.
To address these challenges, Contra Costa County, the Cities of San Pablo and Walnut Creek, and the County Flood Control District partnered with the EPA to pilot the RAC System. Existing rules and guidance authorizing alternative compliance pathways legally support the RAC System. The San Francisco Bay Water Board reviewed and approved the RAC System under MRP Provision C.3.e, the section explicitly devoted to alternative compliance.
To effectively manage the RAC System, participating agencies are forming a JPA. The JPA is responsible for administering Off-Site GSI certification, compliance unit accounting, project verification, long-term maintenance funding mechanisms, and annual reporting to the Water Board.
How the RAC System Works
The RAC System creates a countywide marketplace in which Off-Site GSI projects, which are facilities intentionally constructed to treat stormwater from areas beyond their immediate footprint, and to generate standardized “compliance units.” These units are quantified based on the drainage area treated, pollutant removal performance, rainfall zone, and land use characteristics (CCC RAC System Overview, pp. 33-38).
Once certified by the local jurisdiction where they are located, Off-Site GSI projects can make their compliance units available for purchase. Public agencies or private developers who cannot feasibly meet on-site stormwater retention requirements may instead purchase sufficient units to meet their MRP obligations. The purchaser also pays for the maintenance of the Off-Site GSI projects to ensure the long-term performance of the Off-Site GSI project.
Why a JPA is Needed
The Draft Joint Powers Agreement establishes a governance structure for administering the RAC System. The JPA is authorized to manage the financial, administrative, and regulatory responsibilities that accompany the program, including forming a Community Facilities District (CFD) under the Mello-Roos Act to levy special taxes on private properties that voluntarily choose to participate in the RAC System (Participating Properties) to fund maintenance of the Off-Site GSI projects.
Pursuant to the Mello-Roos Act, in order for the JPA to form a CFD that may include Participating Properties in the City (either at the time of CFD formation or by annexation to the CFD) and levy special taxes to finance maintenance of Off-Site GSI projects, the JPA and the City must enter into a joint community facilities agreement or joint exercise of powers agreement. The JPA can efficiently levy the special tax under the Mello-Roos Act without the need for each individual participant to establish a new CFD within their jurisdiction. Because public agencies are not subject to CFD special taxes, the JPA would collect a separate fee from public agencies that purchase compliance credits through the RAC System.
The CFD provides a stable, predictable revenue stream to maintain Off-Site GSI facilities, which is essential to ensuring the continued functionality of systems relied upon for compliance. Public agencies that purchase compliance units pay directly to the JPA rather than through property tax mechanisms, which simplifies public-sector participation.
Benefits of RAC Participation to the City of San Pablo
The RAC System offers several benefits that are particularly important for agencies seeking flexible, affordable ways to meet stormwater regulations.
1. It provides a solution for constrained project sites where onsite GSI is impractical. Rather than granting variances or requiring redesigns, staff can direct applicants to a consistent, regionally approved alternative compliance mechanism. This allows the City to more effectively use the land available in our built-out environment.
2. It supports more cost-effective stormwater treatment. Large regional GSI facilities can achieve economies of scale, reducing both upfront construction and ongoing maintenance costs per acreage treated compared to multiple small installations dispersed across the City.
3. RAC participation aligns with regional water quality goals. Off-Site GSI facilities can be strategically located in areas with high legacy pollutant loads, helping the City make measurable progress toward PCBs and other TMDL targets.
4. RAC participation reduces local administrative burden. The RAC Tracking Tool stores compliance unit records, tracks buyer/seller transactions, ensures proper verification and maintenance documentation, and houses all regulatory reporting materials. Without participation in the JPA, these administrative tasks would fall solely to local staff.
5. The RAC program will provide the City of San Pablo with the opportunity to generate revenue through the sale of compliance units associated with GSI projects, such as the Sutter Avenue Green Street Project. This funding can help offset General Fund CIP expenditures used for project installation while also supporting ongoing maintenance to ensure the long-term effectiveness and proper upkeep of the improvements.
Consistent with City of San Pablo Policy and Regional Regulations
Participation in the RAC JPA is consistent with the City’s obligation to comply with state and federal water quality regulations. Furthermore, the program supports regional GSI planning efforts and broad sustainability policies that encourage multi-benefit infrastructure projects, pollutant reduction, and improvements in water quality.
Joint Community Facilities Agreement
Pursuant to the Mello-Roos Act, in order for the JPA to form a CFD that may include Participating Properties in the City and levy special taxes to finance maintenance of Off-Site GSI projects, the JPA and the City must enter into a joint community facilities agreement or joint exercise of powers agreement.
The attached resolution provides that the JPA Agreement, together with the resolution, constitutes a joint community facilities agreement. The resolution authorizes the JPA to undertake and conduct proceedings under the Mello Roos Act to form the CFD with boundaries that include Participating Properties within the City’s jurisdiction, to annex Participating Properties within the City’s jurisdiction to the CFD, and to levy a special tax on such Participating Properties; provided that the owners of the Participating Properties at the time of formation of the CFD or annexation to the CFD, as applicable, execute a ballot or unanimous approval in favor of the levy of the special tax in accordance with the Mello-Roos Act.
Budget, Fiscal & Legislative Standing Committee Review
On June 10, 2026, the Budget, Fiscal & Legislative Standing Committee (BFLSC), consisting of Mayor Pabon-Alvarado and Councilmember Ponce, were presented an overview and purpose of the RAC JPA which supports regional GSI planning efforts and broad sustainability policies that encourage multi-benefit infrastructure projects, pollutant reduction, and improvements in water quality. Following this presentation, the BFLSC recommended its formal consideration to the City Council.
Staff Recommended Actions
Staff recommends that the City Council support implementation of the RAC Program by authorizing the actions necessary to facilitate successful program implementation, as outlined below:
1. Authorize participation in the Contra Costa County Regional Alternative Compliance (RAC) Joint Powers Authority (JPA).
2. Approve the proposed Joint Powers Agreement and authorize the City Manager to execute it.
3. Appoint a Board Representative for regulatory and technical compliance (recommended: Environmental Program Manager) and an alternate (Environmental Program Analyst).
4. Direct staff to take all necessary actions to participate in the RAC system, including amending the City’s stormwater ordinance to recognize RAC as an alternative compliance option.
5. Authorize the JPA to establish one or more Community Facilities Districts (CFDs), including the ability to accept applications, annex properties, and levy special taxes to fund ongoing maintenance of off-site stormwater projects; and approve a joint community facilities agreement.
6. Direct staff to develop reports on JPA/CFD progress to be reported to City Council annually.
FISCAL IMPACT
Participation in the RAC JPA will require the City of San Pablo to contribute to the JPA’s annual operating cost, which, under the Draft JPA Agreement, is shared equally among all member agencies unless modified by agreement. The amount of this cost will be presented separately upon confirmation of the final annual budget from the JPA Board. The amount is expected to be nominal (~$4,000 per agency) because the cost of administering the CFD, the primary function of the JPA, will be paid out of special taxes collected by the CFD. In addition, the annual operating costs will be covered by the City’s annual Stormwater Utility Assessment and will not impact the General Fund 100. If adjustments or supplemental appropriations become necessary, staff will return to the Council with recommendations.
Participation may also generate revenue for the City when staff carry out responsibilities such as Off-Site GSI verification or buyer approvals, as jurisdictions receive payment for performing these duties. There is no fiscal obligation for Off-Site GSI maintenance associated with private development projects, because CFD special taxes cover these costs. Public agency buyers fund O&M directly through agreements with the JPA.
ATTACHMENTS:
Att A. Resolution
Att B. RAC JPA Agreement
Att C. System Overview
Att D. RAC System Fact Sheet