CC 07-20-2021 Item No. 23 Municipal Water System_Staff PresentationCupertino Municipal Water System
Consideration of Sale, Lease or City
Operation
July 20, 2021
CC 07-20-2021 Item No. 23
History and Current Lease
●Operated by City until 1997
●Leased to San Jose Water Co. for
25-years in October 1997
●Lease amended in 2019
●Amended lease expires October
2022
Options to Consider for Future
Operation of System
●Sale
●City Operation
●New Extended Lease
Sale –not recommended
●Option 1 –41 months
●Request for Proposals
●Majority vote
●Option 2 –45 months
●Legislative amendment
City Operation –not recommended
●City forces
●City assumes all risk
●Higher rates
New Long-Term Lease
-recommended
●City retains ownership
●Customers of System receive
comparable services and rates
●Ease and time of implementation
New Long-Term Lease
●Lease provisions will include:
●20-year term
●Annual System improvements
●Rates equal or less than
surrounding systems
New Long-Term Lease
Request for proposals
●Qualifications, experience, and
history in operating water systems
●Concession amount proposed
●Annual payment amount proposed
Next Steps
Activity Date
New lease completed July 26,2021 –October 1,2021
RFP issued with new lease October 5,2021
RFP evaluated by potential proposers October 5,2021 –December 7,2021
Proposals received by City December 7,2021
Proposal evaluated by staff December 7,2021 –February 15,
2022
Public hearing by Council March 1,2022
Transition of System to selected
proposer
April 2022 –October 2022
Begin new long-term lease November 2022
Recommended Actions
●Conduct a Public Hearing to consider the
continued operation of the Cupertino
Municipal Water System; and
●Adopt Resolution 21-XXX, authorizing the
Public Utilities Code §10061 process for a
future long-term lease of real property
(Cupertino Municipal Water System)
Cupertino Municipal Water System
Consideration of Sale, Lease or City
Operation
July 20, 2021