HomeMy WebLinkAboutRESO 10025
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RESOLUTION NO. 10025
Resolution Of The Council Of The City Of Palo Alto Approving A
Minimum Purchase Transfer From
The City Of Mountain View To The City Of East Palo Alto
R E C I T A L S
A. The City and County of San Francisco ("San Francisco") Public Utilities
Commission ("SFPUC" or "Commission") operates the Regional Water System, which delivers
water to water supply agencies in Alameda, San Mateo, and Santa Clara Counties (collectively,
“the Parties”).
B. In April 2003, water supply agencies in Alameda, San Mateo and Santa Clara
Counties (collectively, the "Wholesale Customers") established the Bay Area Water Supply and
Conservation Agency ("BAWSCA"), as authorized by Water Code Section 81300 et seq.
C. In November of 2018, San Francisco and the Wholesale Customers (the
"Parties") entered into the Amended and Restated Water Supply Agreement ("WSA").
D. The Parties have identified intra-system water transfers as one potential
solution to long-term water reliability needs among the Wholesale Customers.
E. In 2017, the City of Mountain View ("Mountain View") and the City of East Palo
Alto ("East Palo Alto") were interested in transferring 1.0 million gallons per day ("MGD") of
Mountain View's Minimum Annual Purchase Quantity (“Minimum Purchase”) to East Palo Alto,
however, at the time, there was no procedure in the WSA to effectuate such a transfer without
amending the WSA.
F. In 2017, Mountain View and East Palo Alto executed a water rights transfer
agreement in which East Palo Alto agreed to pay Mountain View $5 Million for the permanent
transfer of all rights, title, interest to 1.0 MGD of Mountain View’s Individual Supply Guarantee
(ISG) to East Palo Alto.
G. In August 2018, BAWSCA and San Francisco provided the Wholesale Customers
a revised Attachment C to the Water Supply Agreement reflecting the updated ISG amounts
for Mountain View and East Palo Alto, as a result of the 1.0 MGD transfer of ISG from Mountain
View to East Palo Alto.
H. Mountain View continues to be subject to a Minimum Purchase of 8.93 MGD
and the financial obligation of paying for imputed sales for the portion of Minimum Purchase
that it does not use.
I. In 2020, Mountain View and East Palo Alto began discussing a possible future
transfer of a portion of Mountain View's Minimum Purchase to East Palo Alto.
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J. On January 26, 2021, the SFPUC adopted the 2021 Amended and Restated
Water Supply Agreement ("2021 WSA"), which includes a new procedure by which Wholesale
Customers with ISGs may participate in permanent expedited transfers of a portion of
Minimum Purchase and ISG, without creating new or different risks to the water supply and
financial interests of Wholesale Customers not participating in such transfers.
K. The 2021 WSA has been or will be presented to the governing body of each
Wholesale Customer, and if approved, will permit Wholesale Customers with an ISG to transfer
and accept a portion of another Wholesale Customer’s Minimum Purchase, if certain
requirements are satisfied; and
L. On April 20, 2021, East Palo Alto approved the conversion of the 1.0 MGD of
Mountain View's ISG sold to East Palo Alto in 2017 into a paired transfer of 1.0 MGD of ISG
plus up to 1.0 MGD of Mountain View's Minimum Purchase to East Palo Alto, in increments of
0.25 MGD or other amount, subject to the City Council’s approval of an agreement for each
incremental transfer and the approval of the Wholesale Customers and San Francisco.
M. On June 8, 2021, Mountain View approved the conversion of the 1.0 MGD of
Mountain View's ISG sold to East Palo Alto in 2017 into a paired transfer of 1.0 MGD of ISG
plus up to 1.0 MGD of Mountain View's Minimum Purchase to East Palo Alto, in increments of
0.25 MGD, subject to the City Council’s approval of an agreement for each incremental transfer
and the approval of the Wholesale Customers and San Francisco.
N. East Palo Alto and Mountain View are authorized and prepared to execute a
negotiated agreement memorializing the terms and conditions of a 0.25 MGD transfer of
Mountain View's Minimum Purchase to East Palo Alto.
O. As noted below, one of the conditions of the negotiated agreement between
Mountain View and East Palo Alto is that, in exchange for the 0.25 MGD of Minimum Purchase
transfer, Mountain View will provide East Palo Alto with an immediate Right-of-First Refusal
for drought water transfers at the same volume as the Minimum Purchase transfer, pursuant
to Appendix H of the 2021 WSA.
P. In conjunction with consideration of the 2021 WSA, East Palo Alto and
Mountain View propose the Wholesale Customers and San Francisco approve, in advance, the
terms and conditions for converting up to 1.0 MGD of Mountain View's ISG purchased by East
Palo Alto in 2017 into a transfer of 1.0 MGD of Mountain View's Minimum Purchase to East
Palo Alto, in 0.25 MGD increments, if Mountain View and East Palo Alto mutually agree to such
incremental transfers in the future and provided the conditions outlined below are met.
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Q. If up to 1.0 MGD of Mountain View's ISG purchased by East Palo Alto in 2017 is
converted into a transfer of up to 1.0 MGD of Mountain View's Minimum Purchase to East Palo
Alto, up to 1.0 MGD of Minimum Purchase, in 0.25 MGD increments, will be counted towards
the total Minimum Purchase that may be transferred pursuant to Section 3.04.C.1 of the 2021
WSA.
R. This parallel action continues to require the calculation of a Temporary
Modified Minimum Annual Purchase Quantity, set out in Attachment E-1 in the 2021 WSA;
however, the transferor, Mountain View, is responsible for the imputed sales associated with
transfers to East Palo Alto up to 1.0 MGD, until the terms and conditions outlined below are
satisfied.
S. In accordance with the water transfer provisions of the 2021 WSA, Mountain
View and East Palo Alto will coordinate with San Francisco and BAWSCA to document
Temporary Modified Minimum Annual Purchase Quantities to be included on Attachment E-1,
transferred Minimum Annual Purchase Quantities to be included on Attachment E, when
timely, and amendments to each cities' Individual Water Sales Contract with San Francisco.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
SECTION 1. The Council approves, in advance, the conversion of up to 1.0 MGD of
Mountain View's ISG, sold to East Palo Alto in 2017 into a transfer of 1.0 MGD of Mountain
View's ISG, plus up to 1.0 MGD of Mountain View’s Minimum Purchase, to East Palo Alto, in
0.25 MGD increments, if all of the following terms and conditions are satisfied:
a. Mountain View will transfer up to 1.0 MGD of its Minimum Purchase to
East Palo Alto, in increments of 0.25 MGD, subject to the Mountain View
City Council's and the East Palo Alto City Council's approval of an
agreement for each incremental transfer.
b. For each incremental transfer, a Temporary Modified Minimum Annual
Purchase Quantity will be calculated for East Palo Alto that is equal to
the City's five-year average water use from the SFPUC for the most
recent non-drought years prior to the 2017 ISG purchase, plus the
incremental transfer amount(s).
c. For each incremental transfer, Mountain View will maintain, and be
responsible for paying any imputed sales for, its Minimum Purchase
requirement in effect at that time, as set forth in Attachment E of the
WSA, including up to 1.0 MGD ISG transfer to East Palo Alto, until East
Palo Alto's water use meets the Temporary Modified Minimum Annual
Purchase Quantity for three consecutive years.
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d. East Palo Alto will not be required to pay imputed sales associated with
the Temporary Modified Minimum Annual Purchase Quantity for any
incremental transfer of the 1.0 MGD of Mountain View's Minimum
Purchase requirement.
e. For each incremental transfer, once East Palo Alto has met the
Temporary Modified Minimum Annual Purchase Quantity for three
consecutive years, the incremental portion of Mountain View's
Minimum Purchase transferred to East Palo Alto will become East Palo
Alto's Minimum Purchase, and Mountain View's Minimum Purchase will
be reduced by an equivalent amount. East Palo Alto's new Minimum
Purchase will be included in Attachment E and both cities' Individual
Water Sales Contracts will be updated to reflect this transfer.
f. With exception of the incremental transfers that are the subject of this
resolution and the agreement between East Palo Alto and Mountain
View described herein, any additional transfers of Minimum Purchase,
either from another Wholesale Customer or from Mountain View in
excess of the 1.0 MGD, are subject to Section 3.04 of the 2021 WSA.
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SECTION 2. The Council finds that approval of a Minimum Purchase transfer from
the City of Mountain View to the City to East Palo Alto is not a "project" for the purposes of
CEQA as it involves an administrative activity that does not result in a direct change to the
environment (see 14 CCR Section 15378(b)(5)), and would not result in a direct or reasonably
foreseeable indirect physical change in the environment (see 14 CCR Section 15060(c)(2)).
INTRODUCED AND PASSED: April 4, 2022
AYES: BURT, CORMACK, DUBOIS, FILSETH, STONE
NOES: KOU, TANAKA
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services
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Subject: Please DocuSign: RESO 10025 - Approving a min purchase Transfer from the City of Mountain View ...
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