To: Board of Supervisors
From: Warren Lai, Public Works Director/Chief Engineer
Report Title: ADOPT Resolution approving participation in the Contra Costa County Regional Alternative Compliance Joint Powers Authority and the Joint Powers Agreement.
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
ADOPT Resolution approving a joint exercise of powers agreement, effective July 1, 2026, establishing the Regional Alternative Compliance (RAC) Joint Powers Authority (JPA) separate from its member agencies, the County, and participating cities within the County, and taking related actions, to develop and operate stormwater treatment projects voluntarily funded by private developers to comply with the Municipal Regional Stormwater National Pollutant Discharge Elimination System permit issued by the San Francisco Bay Regional Water Quality Control Board, Permit No. CAS612008.
FISCAL IMPACT:
There is minimal immediate fiscal impact for the initial RAC System. Future costs will be incorporated into relevant project costs. Associated costs funded 100% by Stormwater Utility Area 17 Funds. Project No. 7517-6W7095.
BACKGROUND:
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, the unincorporated County, and the County Flood Control and Water Conservation District (Flood Control 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 County RAC System is an innovative, regionally supported approach to fulfill 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 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 the 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 CFD that may include Participating Properties in the County (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 County must enter into a joint community facilities agreement or joint exercise of powers agreement.
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 (refer to CCC RAC System Overview, pp. 3-4).
In addition, under MRP Provision C.3.j, municipalities must retrofit a quantifiable amount of existing impervious surface with GSI over the permit term. This requirement can be costly and resource intensive when implemented through numerous small, distributed projects (refer to CCC RAC System Overview, pp. 3-4). Moreover, cities must comply with pollutant load reduction targets under the Polychlorinated Biphenyls (PCBs) Total Maximum Daily Load (TMDL) (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 partnered with the EPA to pilot the RAC System (refer to, Fact Sheet, p. 1). 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 (refer to CCC RAC System Overview, p. 8).
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 (refer to Draft JPA Term Sheet, Sections 6 & 11).
ANALYSIS:
How the Regional Alternative Compliance System Works.
The RAC System creates a countywide marketplace in which Off-Site GSI projects-facilities intentionally constructed to treat stormwater from areas beyond their immediate footprint-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, p. 8).
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 (Fact Sheet, p. 1). The purchaser also pays for maintenance of the Off-Site GSI Projects to ensure the long-term performance of the Off-Site GSI project.
Why a Joint Powers Authority 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 CFD under the Mello-Roos Act to levy special taxes on 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 County (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 County must enter into a joint community facilities agreement or joint exercise of powers agreement. (Draft JPA Term Sheet; Sections 6 & 8). 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 Regional Alternative Compliance Participation to the County
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 on-site GSI is impractical. Rather than granting variances or requiring redesigns, staff can direct applicants to a consistent, regionally approved alternative compliance mechanism.
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 County (Fact Sheet, p. 2).
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 County make measurable progress toward PCBs and other TMDL targets.
4. RAC participation reduces local administrative burden. The RAC Tracking Tool-maintained by the JPA-stores compliance unit records, tracks buyer/seller transactions, ensures proper verification and maintenance documentation, and houses all regulatory reporting materials (Draft JPA Term Sheet; Sections 6 and 8). Without participation in the JPA, these administrative tasks would fall solely on local staff.
Consistent with County Policy and Regional Regulations
Participation in the RAC JPA is consistent with the County’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.
The RAC System provides the County with the potential option to buy or sell compliance units to meet the following requirements:
• Regulated C.3.d Projects - the RAC System can provide the County with options if developing or redeveloping impervious surfaces of 5,000 square feet or greater.
• C.3.j Numeric Retrofit Targets - the RAC System can provide the County with options in purchasing or selling compliance units if needed in order to meet the County’s GSI retrofit targets by June 30, 2027 and for future MRP 4.0 permit requirements.
• Achieving PCBs TMDL C.12.c Requirements - the RAC System can provide the County with an option to meet the MRP’s PCBs TMDL requirements.
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 County (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 County 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 County’s jurisdiction, to annex Participating Properties within the County’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.
FISCAL IMPACT:
Participation in the RAC JPA will require the County 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 (Draft JPA Term Sheet, Section 15). 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 because the cost of administering the CFD-the primary function of the JPA-will be paid for out of special taxes collected by the CFD.
Participation may also generate revenue for the County when staff carry out responsibilities such as Off-Site GSI verification or buyer approvals, as jurisdictions receive payment for performing these duties (Draft JPA Term Sheet; Section 8). 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 Operations and Maintenance directly through agreements with the JPA (Draft JPA Term Sheet; Section 8).
At this time, staff anticipate that JPA membership costs can be absorbed within the County’s existing stormwater program budget. If adjustments or supplemental appropriations become necessary, staff will return to the Council with recommendations.
CONSEQUENCE OF NEGATIVE ACTION:
If the County declines to participate in the RAC JPA, the County would be required to meet its LID requirements on each site, meet its numeric retrofit requirements using its own projects, and meet the PCBs TMDL C.12.c requirements.
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
and for Special Districts, Agencies and Authorities Governed by the Board
body
IN THE MATTER OF approving the Joint Powers Agreement between participating cities and Contra Costa County to constitute the Contra Costa County Regional Alternative Compliance Joint Powers Authority and implement the Contra Costa County Regional Alternative Compliance System; appointing a board member and alternate; authorizing the Joint Powers Authority to establish one or more Community Facilities Districts, accept applications from property owners, annex properties to the CFD and levy special taxes to finance ongoing maintenance costs for the 0ff-Site GSI Projects constructed pursuant to the Regional Alternative Compliance System within or outside the territory of the County; and approving a Joint Community Facilities Agreement.
Acting as the governing body of Contra Costa County (“County”), The Board of Supervisors of Contra Costa County hereby FINDS and DETERMINES, as follows;
WHEREAS, the County is a “public agency,” public agencies, as defined in the Joint Exercise of Powers Act, California Government Code Section 6500, et seq., and are authorized to enter into an agreement to exercise powers common to all public agencies entering into that agreement;
WHEREAS, the County desires to participate in the Contra Costa County Regional Alternative Compliance (“RAC”) System, which is a program designed to offer a flexible, cost-effective, and scientifically defensible compliance option for the Municipal Regional Stormwater National Pollutant Discharge Elimination System ("NPDES") Permit issued by the San Francisco Bay Regional Water Quality Control Board, Permit No. CAS612008;
WHEREAS, the proposed Joint Powers Authority (“JPA”) is being formed to (i) establish a Community Facilities District (“CFD”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (“Mello-Roos Act”) in order to finance ongoing maintenance costs for “Off-Site GSI Projects” constructed pursuant to the RAC System, and (ii) take other actions in furtherance of the RAC System;
WHEREAS, a joint exercise of powers agreement between participating cities and the County, has been prepared to establish the proposed JPA that will implement the RAC System;
WHEREAS, the proposed agreement will take effect on the earlier of July 1, 2026, provided that two proposed member agencies have executed the agreement by such date, or when all proposed member agencies have executed the agreement; and
WHEREAS, each member of the proposed JPA may appoint a representative to serve on the JPA’s Board and an alternative member to serve in the absence of the appointed representative;
WHEREAS, the County’s legislative body desires to participate in the RAC System and to approve the Agreement; and
WHEREAS, with respect to the CFD:
(1) the JPA may establish the CFD to finance the maintenance of Off-Site GSI Projects pursuant to Section 53313.5(f) of the Mello-Roos Act, which authorizes CFDs to finance the acquisition, improvement, rehabilitation, or maintenance of any real or other tangible property, whether privately or publicly owned, for flood and storm protection services, including, but not limited to, storm drainage and treatment systems;
(2) the County desires to allow the owners (“Participating Owners”) of property being developed within the County’s jurisdiction (“Participating Properties”) to participate in the CFD in order to finance ongoing maintenance costs for Off-Site GSI Projects constructed pursuant to the RAC System, whether those Off-Site GSI Projects are located within the boundaries of the County or not, and to allow the JPA to conduct proceedings to form the CFD, annex Participating Properties to the CFD, and levy special taxes on such Participating Properties;
(3) the JPA, and the County are “local agencies” under the Mello-Roos Act;
(4) the Mello-Roos Act permits two or more local agencies to enter into a joint community facilities agreement or joint exercise of powers agreement to exercise any power authorized by the Mello-Roos Act;
(5) the County desires to enter into such an agreement authorizing the JPA to form the CFD and annex to the CFD Participating Properties located within the territorial limits of the County for the purpose of financing the maintenance of Off-Site GSI Projects, whether those Off-Site GSI Projects are located within the boundaries of the County or not; and
(6) the County will not be responsible for the conduct of any proceedings to form the CFD, annex Participating Properties to the CFD, levy or collect special taxes, or any required remedial action in the case of delinquencies in such special tax payments, all such activities being the obligation of the JPA, an agency separate from the County, and other member agencies.
NOW, THEREFORE BE IT RESOLVED, that the Contra Costa County Board of Supervisors, acting in its capacity as the governing body of the County, does resolve, declare, determine, and order as follows:
Section 1. The Board hereby approves the “Joint Powers Agreement Between Participating Cities and Contra Costa County to Establish the Contra Costa County Regional Alternative Compliance Joint Powers Authority for Implementation of the Contra Costa County Regional Alternative Compliance System,” (“Agreement”) substantially in the form attached hereto as Exhibit “A” to this Resolution.
Section 2. Prior to the effective date of the Agreement, the Board hereby authorizes the Public Works Director, or designee, to negotiate minor and technical non-substantive revisions to the Agreement approved in Section 1 that do not change the overall intent of the Agreement or increase liability or cost exposure to the County.
Section 3. The Board appoints the Public Works Director, and his designees, as the County’s primary and alternate JPA Board representatives.
Section 4. The Board authorizes the Public Works Director, or designee, to execute the Agreement on behalf of the County.
Section 5. The Board directs County staff to take such actions as may be necessary to participate in the RAC System, which may include but may not be limited to preparing an ordinance to revise the City’s stormwater ordinance to incorporate participation in the RAC System as an approved alternative compliance for meeting applicable stormwater treatment requirements.
Section 6. The Board authorizes County staff to collaborate with the RAC JPA Administrator to support RAC System implementation, in accordance with the Agreement and applicable laws and regulations.
Section 7. The Agreement, together with the terms and provisions of this Resolution, shall together constitute a separate joint community facilities agreement between the County and the JPA under the Mello-Roos Act for the CFD.
This Resolution shall constitute full approval under Section 8.2 of the Agreement for the JPA to undertake and conduct proceedings under the Mello Roos Act to form the CFD with boundaries that include Participating Properties within the County’s jurisdiction, to annex Participating Properties within the County’s jurisdiction to the CFD, and to levy a special tax on such Participating Properties; provided that the Participating Owners, who shall be the legal owners of such property 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.
The Board hereby determines that the Agreement, together with the terms and provisions of this Resolution, are beneficial to the residents/customers of the County and to future residents of the area within the CFD.
The Board hereby determines that all of the Off-Site GSI Projects constructed pursuant to the RAC System that will be maintained by Participating Properties within the County’s jurisdiction are necessary to meet increased demands placed upon the County as a result of development occurring or expected to occur within the County.
The County hereby consents to the formation of, and annexation of Participating Properties to, the CFD in accordance with this Resolution, and consents to the assumption of jurisdiction by the JPA for the proceedings respecting the CFD with the understanding that the JPA will hereafter take each and every step required for or suitable for consummation of the proceedings to form the CFD or annex Participating Properties to the CFD, and the levy, collection and enforcement of the special tax, all at no cost to the County and without binding or obligating the County’s general fund or taxing authority.
The Board hereby authorizes and directs appropriate officials and staff of the County to execute and deliver such certificates, agreements and documents, and to take all such other lawful actions, as are reasonably required by the JPA in accordance with the formation of the CFD, the annexation of Participating Properties to the CFD, the levy of special taxes and the financing of ongoing maintenance costs for Off-Site GSI Projects constructed pursuant to the RAC System. Provided, however, that anything requiring the discretionary approval of the Board shall be brought to the Board for its consideration.