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EXHIBIT A 5 Stantec HILDEBRAND March 25, 2019 City of Santa Ana Attn: Rudy Rosas Public Works Agency, City Corporation Yard 215 South Center Avenue, Building A Santa Ana CA 92703 Re: Stormwater Funding Feasibility Study Dear Mr. Rosas, On behalf of Stantec Consulting and Hildebrand Consulting, we are pleased to submit the attached scope of work and fee to conduct a Stormwater Funding Feasibility Study for the City of Santa Ana. The purpose of this project is threefold: (1) develop an understanding of the City's stormwater program financial requirements, (2) evaluate the City's funding options to meet the stormwater program's needs, and (3) work with City staff to develop an action plan for seeking the funding necessary to sustain the desired levels of service from the stormwater program. The City currently funds a portion of its stormwater program indirectly through water and sewer rates. The feasibility of sustaining this funding source or creating a new funding source will require further exploration. Obtaining new funding for stormwater utilities in California is notoriously difficult compared to water, wastewater, and solid waste utilities since stormwater services are not designated as a "property -related" service in Proposition 218 (California Constitution, Article XIIID). As such, increasing or creating new stormwater fees/taxes generally require some form of voter approval. While the recently adopted Senate Bill 231 (SB 231) has promised to make stormwater funding easier by amending the Government Code Section 52750 to define the term "sewer' to include stormwater utilities, this approach is legally tenuous, and the use of this approach has no known precedent at this time. Case in point, in spite of the passage of SB 231, Los Angeles County recently opted to use a parcel tax to fund their stormwater program (see Measure W) rather than "test the waters" of (the ostensibly easier approach of) assuming that stormwater services are "property -related" that are subject to Proposition 218. As such, once we have defined the City's stormwater program and anticipated future funding requirements, we will explore the City's specific circumstances with respect to existing revenue sources and utility operations to develop ideas regarding potential alternative funding sources. PageA of 4