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Create tax zone to pay for flood protection?

Creek authority eyes finance district for residents in flood-prone areas

With federal funding up in the air, Palo Alto, East Palo Alto and Menlo Park officials may look to residents who live near the volatile San Francisquito Creek to tax themselves in order to pay for flood protection.

The San Francisquito Creek Joint Powers Authority, an agency that includes elected officials from the three cities, is considering creating a finance district for residents in about 5,400 parcels near the flood-prone creek, said Len Materman, executive director of the creek authority.

The goal, Materman told the Palo Alto City Council Monday night, is to pass a bond measure that would help owners in the flood-plain properties leave the National Flood Insurance Program, which costs an average household $1,300 a year. The bond measure, he said, would cost the parcels between $600 and $700. Once construction is completed, he said, property owners would see major savings.

With flood-insurance rates rising by about 3 percent annually, Materman said, the annual rate is slated to go up $2,000 in 15 years and to more than $3,500 in 35 years.

"We do know that that an argument for passing a bond measure would be to achieve substantial savings for property owners following the construction period," Materman said.

The proposed finance district is one of many funding sources the creek authority is considering to pay for its ambitious plan to calm the fickle creek. The agency was formed in 1999, one year after the creek flooded, causing tens of millions of dollars of damage.

The creek authority -- which includes elected officials from the three cities, the Santa Clara Valley Water District and the San Mateo County Flood Control District -- is also seeking various state grants to build a new levee downstream and to upgrade bridges in the three cities.

Officials from the three cities had initially hoped to acquire federal funding for the proposed flood-protection measures. The U.S. Army Corps of Engineers is in the midst of a feasibility study analyzing ways to protect the properties around the creek from the "100-year flood" (an event that, by definition, takes place once every 100 years). The study was launched in 2005 and still has ways to go, Materman said. Both the appropriations for the study and the progress with the appropriations have been "suboptimal" he said.

Given the slow progress on the federal front, the cities are now focusing on funding sources at the state, county and local levels.

"If we rely on the Corps it could be several decades, but if we take ownership of funding and try to apply for a two-county funding district, it's faster," Materman said.

The creek authority had earlier this year applied for a state grant that would help pay for the design costs associated with upgrading the Newell Road bridge between Palo Alto and East Palo Alto. It is planning to seek a similar grant for the Middlefield Road bridge between Palo Alto and Menlo Park. The Pope-Chaucer Street and University Avenue bridges would be next in line.

The first phase of the creek authority's plan targets the vulnerable downstream area between U.S. 101 and the San Francisco Bay. It includes excavating a channel, connecting the creek to the Baylands and building a levee (a project that would require reconfiguration of the Palo Alto Municipal Golf Course). The project, which would provide protection from a 100-year flood to the downstream area has an estimated cost of $26 million.

The second phase would focus on the area between 101 and El Camino Real. It would include either building floodwalls -- a complex project that would require acquisition of right-of-way -- or creating a bypass channel under Woodlawn Avenue. That project would cost between $20 million and $25 million and would offer 50-year protection to the properties in this area.

Other options to boost flood protection in this area include upgrading bridges, modifying the bottlenecked portions of the creek and creating an upstream retention basin. Materman estimated that achieving 100-year protection for this area would cost between $40 million and $50 million.

He said he hopes much of the funding for the work in this area, particularly for the bridge repairs, will come from the state.

"We're hoping to whittle away at the $20 million to $25 million through various funding sources but we imagine some local funding needs will remain," he said.

If the cities want to bolster protection from coastal flooding by building levees in the Baylands, the project would cost from $40 million to $45 million.

Total cost for all projects: between $126 million and $146 million.

Councilman Pat Burt, who represents Palo Alto on the JPA board of directors, said the authority has shifted in recent years from depending on the federal government to pay for a "grand solution" to pursuing smaller projects that could be implemented in the nearer future.

"As recently as three or four years ago, there began to be a recognition by the JPA board and JPA staff that we didn't want to wait until some future decade for federal funding to really start solving this problem," Burt said. "There was a switch to try to say, 'What can we do sooner?'"

Burt said there is now a greater likelihood than before that a major portion of the project can be done in the "foreseeable future" and that construction on the downstream project can begin at the end of 2012.

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