HomeMy WebLinkAboutStaff Report 415-06City of Palo Alto
.City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: UTILITIES
DATE:
SUBJECT:
NOVEMBER 20, 2006 CMR:415:06
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
AUTHORIZING THE CITY OF PALO ALTO TO FILE A WATER
RECYCLING FACILITIES. PLANNING GRANT APPLICATION IN THE
AMOUNT OF $75,000 WITH THE STATE WATER RESOURCES
CONTROL BOARD
RECOMMENDATION
Staff and the Utilities Advisory Commission (UAC) recommend that the Council approve a
resolution directing staff to file a Water Recycling Facilities Planning Grant application for a
grant from the State Water Resources Control Board in the amount of $75,000 to allow the
preparation of a facility plan and the preparationof environmental documents for expanding the
recycled water distribution system in Palo Alto.
BACKGROUND
The City of Palo Alto Utilities and the partners/owners of the Palo Alto Regional Water Quality
Control Plant (PARWQCP) examined the feasibility of expanding the use of recycled water in
the PARWQCP service area in 1991 and 1992. This examination was concluded with the
publication of the April 1992 report, "Water Reclamation Master Plan for the Regional Water
Quality Control Plant" (Master Plan).
In April 1995, the Council certified the Program Environmental Impact Report (EIR) for the
projects identified in the Master Plan [CMR:217:95]. At that time, the Council decided not to go
forward with the new projects as they were not cost-effective. Council directed staff to re-
evaluate the projects in case of changed conditions such as: 1) changes in the PARWQCP
discharge permit requirements; 2) increased mass loading to the PARWQCP; 3)requests by
partner agencies of other local agencies; 4) availability of federal or other funds; and 5) supply-
side issues, which may lead to increases in the value of recycled water from a water supply
perspective, such as water supply cost, water supply availability, regulatory and legislative
initiatives and advanced treatment for potable reuse.
CMR:415:06 Page 1 of 4
Because enough had changed since the Master Plan was completed in April 1992 to prompt staff
to re-evaluate the recycled water program in Palo Alto, the 2006 Recycled Water Market Survey
(RWMS) was completed. The attached report to the Utilities Advisory Commission (UAC)
discusses the findings of the RWMS.
The primary conclusion from the RWMS is that the total potential recycled water demand in the
City of Palo Alto is about 1,693 acre-feet per year (AFY). Of this total, the project identified
would provide about 840 AFY of recycled water, of which the majority of the end use (720 AFY)
is in the Stanford Research Park (SRP) area. For Comparison, the amount of water Palo Alto
purchased from its supplier, the San Francisco Public Utilities Commission (SFPUC), was about
13,300 AFY in FY 05-06. Therefore, the project would save about 6.3% of the potable water
used in the city.
The estimated cost of the project is $16.9 million. This results in a unit cost for the recycled
water of $1,959/AF. The future cost of water from the SFPUC is projected to be about
$1,600/AF. Although the project does not appear to be cost-effective from the City of Palo Alto
Water Utility perspective, there are other beneficiaries for the project. These beneficiaries may
be able to help pay for the project so that the cost to Palo Alto could be justified.
One potential funding source is from state and federal grant and loan funds. However, before the
project can be considered for such funding, additional planning and design work must be
completed. Since these state and federal construction grant funds may not be available in the
future, it is important to get in line for these funds as early as practical. Therefore, staff
recommends proceeding with preparation of a facility plan and environmental documents for the
project. Planning grant funds of up to one-half of the cost to prepare a facility plan for the
project are available from the State Water Resources Control Board. This work will further
develop the project so that decision makers can have more information for a decision and to
enable the project to compete for construction grant funds.
BOARD/COMMISSION REVIEW AND RECOMMENDATION
The UAC discussed the project at its meeting of October 4, 2006. By a 3-1 vote, the
Commission supported staff’s recommendation to proceed with preparation of a facilities plan
and environmental documents for expanding the recycled water distribution system as described
in the RWMS for a cost not to exceed $150,000.
Some of the comments made by commissioners in support of the staff recommendation included
that the City will have to expand the use of recycled water eventually as new sources are needed
in the region and existing sources need to be conserved. Commissioner Rosenbaum argued that
the City should wait until the project is cost-effective before proceeding; there is no closing
window on this project - its potential will remain until the City decides to develop it in the
future.
CMR:415:06 Page 2 of 4
RESOURCE IMPACT
Preparing a facilities plan and environmental documents is estimated to cost $150,000. Staff
expects to receive a planning grant from the State Water Resources Control Board for half of that
amount, or $75,000. The remainder of the funding is included in the FY06-07 budget.
POLICY IMPLICATIONS
Continuing the exploration of expanding the use of recycled water in Palo Alto is consistent with
Council policy. The Council has supported this goal by its approval of the Water Integrated
Resources Plan (WIRP) Guidelines in December 2003 [CMR:547:03], specifically, WIRP
Guideline #3: Actively participate in development of cost-effective regional recycled water
plans.
Council’s Sustainability Policy supports the development of recycled water, specifically in the
Policy’s statement to "reduce resource use and pollution in a cost-effective manner while striving
to protect and enhance the quality of the air, water, land, and other natural resources."
The city’s Comprehensive Plan contains Natural Environment Goal N-4: Water resources that
are prudently managed to sustain plant and animal life, support urban activities and protect
public health and safety. Specifically, Program N-26 addresses the use of recycled water:
Implement incentives for the use of drought-tolerant landscaping and recycled water for
landscape irrigation.
ENVIRONMENTAL REVIEW
Further examination of expanding the use of recycled water in Palo Alto by preparing a facility
plan does not require environmental review. This examination will help to identify the
environmenta! impacts of constructing the facilities needed to expand the use of recycled water
and it will be used for the environmental review phase of the project if and when Council decides
to move to a construction phase of the project.
NEXT STEPS
If directed to proceed as recommended, staff will apply for a Water Recycling Facilities Planning
Grant from the State Water Resources Control Board. Work on the facilities plan may not begin
until the State Water Resources Control Board makes a funding commitment. If the grant
application is submitted in November or December, the state’s funding commitment may be
made in February or March of 2007.
Staff will use the Request for Proposal process to solicit a consultant to prepare a facilities plan
and environmental documents to further develop the project. After receipt of the state’s funding
commitment and negotiation with the selected consultant, staff will return to Council with a
consultant contract for the work. Staff expects to have a consultant under contract for this work
during FY 06-07. The work is expected to be complete in FY 07-08.
After the facility plan and environmental documents are complete, staff will develop a
recommendation on whether’ to proceed towards construction of the required facilities. The
recommendation will then go to the Council for action.
CMR:415:06 Page 3 of 4
ATTACHMENTS
1. Resolution of the Council of the City of Palo Alto Authorizing the City of Palo Alto to
file a Water Recycling Facilities Planning Grant Application in the Amount of $75,000
with the State Water Resources Control Board.
2.Draft Plan of Study to be submitted in the application for a Water Recycling Facilities
Planning Grant from the State Water Resources Control Board.
3.Report to the UAC for its October 4, 2006 meeting: Recycled Water Market Survey
Results.
4.Excerpted minutes from the UAC meeting of October 4, 2006.
PREPARED BY:
, JAiNE RATCHYE~S~nior Resource Planner
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
CMR:415:06 Page 4 of 4
ATTACHMENT 1
***NOT YET APPROVED***
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
AUTHORIZING THE CITY OF PALO ALTO TO FILE A WATER
RECYCLING FACILITIES PLANNING GRANT APPLICATION IN
THE AMOUNT OF $75,000 WITH THE STATE WATER
RESOURCES CONTROL BOARD
WHEREAS, the City of Palo Alto (the "City") owns with other
local agencies the Palo Alto Regional Water Quality Control Plant
(the ~Plant"), which produces recycled water that is used for
irrigation purposes and other non-potable needs at various City
facilities;
WHEREAS, in 1992, the Plant completed a Water Reclamation
Master Plan for the Regional Water Quality Control Plant (the
~Plan") to provide for a framework for developing recycled water
storage and distribution facilities; Phase One of the Plan examined
the expanded use of recycled water in the southern portion of the
Plant’s service territory;
WHEREAS, in July 2006, the City completed a Recycled Water
Market Survey, which identified the potential for, and
preliminarily evaluated the feasibility of, expanding the recycled
water distribution system in order to serve additional customers
located primarily within the City’s jurisdictional boundaries;
WHEREAS, the City has determined that it is in the public
interest to consider expanding the uses of recycled water in the
northern portion of the Plant’s service territory within the
jurisdictional boundaries of Palo Alto, and for that purpose to
conduct a Recycled Water Facilities Planning Study (the ~Study");
WHEREAS, the California State Water Resources Control Board
(the ~State"~) issues grants in amounts equal to 50 percent of the
total cost of any such Study, which the City .estimates will cost
$150,000;
WHEREAS, as a grant applicant, the City will enter into a
grant agreement with the State with respect to such grant
application for funds in connection with the Study;
NOW, THEREFORE, the .Council of the City of Palo Alto does
RESOLVE as follows:
SECTION i. The Council of the City of Palo Alto hereby
authorizes the City of Palo Alto to submit a Water Recycling
1
~l113 s~ ~7~72
** *NOT YET APPROVED* * *
Facilities Planning Grant Application for a grant from the
California State Water Resources Control Board in an amount not to
exceed $75,000 for a facilities planning study of the City of Palo
Alto entitled "Recycled Water Facilities Planning Study. "
SECTION 2. The City Manager, or his designee, the Director
of Utilities, is hereby authorized and directed to execute and file
for and in behalf of the City of Palo Alto, the Grant Application
and certify that the City has and will comply with all applicable
state statutory and regulatory requirements related to any state
grant funds received. The City Manager or his designee is
authorized to negotiate and execute a grant contract and any
amendments or change orders thereto in behalf of the City of Palo
Alto.
SECTION 3. The filing of a grant application is not a
project and thus is exempt from the provisions of the California
Environmental Quality Act.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
Mayor
City Manager
Director of Utilities
061113 syn 0072772
2
Attachment 2
Plan of Study
The City of Palo Alto currently uses recycled water for several City facilities located near the
Palo Alto Regional Water Quality Control Plant (RWQCP). These uses include irrigation at the
municipal golf course, a City park, and around the RWQCP; water replenishment at a duck pond
in a City park; and certain processes at the RWQCP. Palo Alto would like to expand the use of
recycled water to potential sites located further from the RWQCP.
The RWQCP completed a Water Reclamation Master Plan in April 1992 that provides a
framework for developing recycled, water storage and distribution facilities to the RWQCP
service area. The City of Palo Alto Council subsequently certified a program level EIR in 1995
for the projects identified in the Master Plan. Although recycled water is being used at locations
near the RWQCP, the Master Plan recommendations to expand the recycled water delivery
system were not implemented since they did not appear to be cost-effective at the time.
However, things have changed sufficiently since the completion of the Master Plan and the EIR
that have driven Palo Alto and the RWQCP to re-evaluate expanding the use of recycled water.
Phase One of this expansion is to deliver recycled water to the southern portion of the RWQCP
service area to reuse sites in Mountain View and Moffett Field. This Mountain View/Moffett
Field project received a state facilities planning grant to complete a facility plan in 20?? and was
awarded $4 million in state construction grant funding. The design phase of the Mountain
View/Moffett Field project is complete .and it is moving forward towards construction.
This project is Phase Two of the expansion of recycled water deliveries into reuse sites within
the boundaries of the City of Palo Alto. In July 2006, the City completed a Recycled Water
Market Survey, which updated the 1992 Master Plan for Palo Alto sites and provided new
estimates 0freuse potential and project cost. It is envisioned that the Facilities Planning Grant
would be used to further develop a focused plan for the distribution system that would deliver
recycled water to the sites identified in the 2006 Recycled Water Market Survey.
1.Service Area
Palo Alto is located on the San Francisco Peninsula in northern Santa Clara County. Palo Alto’s
population is almost 60,000 and is expected to grow to about 6X,000 by 2030.
2. Recycled Water Sources
The RWQCP is an advanced (tertiary) wastewater treatment plant located at the east end of
Embarcadero Road in the Palo Alto. The facility, which is operated and maintained by the City
of Palo Alto, provides treatment and disposal of wastewater for the Cities of Mountain View,
Los Altos, East Palo Alto, Stanford University, and the Town of Los Altos Hills (RWQCP
Partners). Influent wastewater to the plant is a combination of domestic, commercial and
industrial flows. The plant has an average dry weather capacity of 38-mgd, with a current
average flow of approximately 23 MGD.
Attachment 2
The main treatment process consists of bar screens, primary sedimentation, secondary treatment
using fixed film reactors followed by activated sludge process, clarification, and filtration. The
filtered effluent is chlorinated, and then dechlorinated with sulfur dioxide prior to discharge to
th~ Bay. Up to 4 MGD of the chlorinated effluent is further treated in a recycled water facility
that provides additional filtration to reduce turbidity to less than 2 NTU and additional
disinfection to produce an effluent that meets the "unrestricted" use definition of the California
Department of Health Services Title 22 requirements.
Potable water supply to the RWQCP service area includes water from the San Francisco Public
Utilities Commission (SFPUC) Hetch-Hetchy water system, the Santa Clara Valley Water
District (SCVWD), and small amounts of local groundwater. SCVWD’s service of State Water
Project water to the area provides the linkage and potential benefits to the Bay-Delta.
3. Current Disposal and Reuse
The RWQCP effluent is predominantly discharged to the San Francisco Bay through an effluent
out-fall. The RWQCP currently delivers approximately I MGD of recycled water to reuse sites.
These existing reuse sites are within the area served by the City of Palo Alto water utility,
Potable water supply to the RWQCP service area includes water from the San Francisco Public
Utilities Commission (SFPUC) Hetch-Hetchy water system, the Santa Clara Valley Water
District (SCVWD), and small amounts of local groundwater. SCVWD’s service of State Water
Project water to the area provides the linkage and potential benefits to the Bay-Delta.
The City of Palo Alto currently uses recycled water for several City facilities located near the
Palo Alto Regional Water Quality Control Plant (RWQCP). These uses include irrigation at the
municipal golf course, a City park, and around the RWQCP; water replenishment at a duck pond
in a City park; and certain processes at the RWQCP. Palo Alto would like to expand the use of
recycled water to potential sites located further from the RWQCP.
4. Study Area Map
The boundaries of the planning area are illustrated in Figure 1 below. Figure 1 also shows the
location of the RWQCP.
5. Agency Jurisdiction
The City of Palo Alto owns and operates the water utility that serves water to users in the
planning area. The RWQCP is operated by the City of Palo Alto for the RWQCP Partners and,
as such, treats and disposes the wastewater delivered from them. It also produces the recycled
water, which is available to the RWQCP Partners for their use.
6. Opportunities for Stakeholder Participation
The RWQCP has an on-going program that engages a focused group of stakeholders in
workshops to discuss the long-term goals for the RWQCP. The stakeholders include local
environmental groups, local businesses, agencies, community groups, and the Partners.
Promoting recycled water use is one of the main goals that the stakeholders have set for the
RWQCP. During the course of this planning project, the RWQCP will involve the stakeholders
Attachment 2
in alternatives evaluation in conjunction with the California Environmental Quality Act (CEQA)
process.
The outreach for this project will include potential users of recycled water, the Utilities Advisory
Commission, the general public, SSPUC, BAWSCA, and SCVWD.
7. Scope of Work
The scope of work for Palo Alto’s Recycled Water Facilities Planning Study includes eight
major tasks: Site Investigation, Analysis of Alternatives and Recommended Facilities Project
Plan (including cost estimates), Preparation of Financial and Revenue Plan, Environmental
Documentation, Public Outreach, Facilities Planning Report, Development of User Agreements,
and Project Management.
Task I Site Investigation
The objective of this task is to conduct thorough site investigations that will provide the basis to
develop recycled water project alternatives and accurate cost estimates for the project. The
investigation will also include reconfirming the estimated annual and peak demands developed in
the 2006 RWMS, and identifying any water quality issues, timing of use, reliability needs, and
general retrofit/on-site issues for each identified potential user.
Market assurances needed to secure the market and meet the SWRCB requirements for
implementation grant funding will be identified.
Meetings will be held with major potential users to provide information on recycled water and
the project, and get input from the potential users on specific issues associated with the use of
recycled water at their site (e.g., on-site retrofits, delivery pressure, sensitive landscaping). An
assessment will be performed of potential users’ response and willingness to use recycled water,
and evaluate the incentives that would be necessary to "secure" the recycled water market. These
incentives will include, but not be limited to, on-site retrofit grants, reduced price, water quality
improvements, service reliability, and service pressure. The potential benefits of a recycled
water ordinance will also be considered.
The logical service areas to be targeted in the near-term, mid-term and long-term will be
identified.
Task 1.1: Data collection
Potential uses of recycled water and locations will be reconfirmed, as needed after review of the
2006 RWMS. Site visits will be scheduled to determine demand characteristics, statistics on
water use for irrigation and industrial use, future water requirements, quality requirements, etc.
Task 1.2: Reuse site retrofits
An investigation of on-site treatment or plumbing retrofits needed to accept recycled water will
be completed, including a detailed review of records and drawings, and verification of existing
Attachment 2
irrigation and utility locations and layout. Evaluate retrofit alternatives and estimate retrofit
costs.
Task 2 Analysis of Project Alternatives and Recommended Facilities Planning Project
The objective of this task is to develop and evaluate recycled water distribution system
alternatives to serve the service areas identified in Task 1, develop a "project plan" and complete
preliminary design for the recommended facilities.
Task 2.1: Alternative Analysis
An engineering evaluation of the project alternatives will be performed to ultimately select
preferred facilities. Each alternative will be analyzed for its ability to meet a set of evaluation
criteria (including magnitude of expected recycled water deliveries, conceptual level capital and
O&M costs, and implementation issues):
This task will also include preliminary design of at least two alternatives to deliver recycled
water from the RWQCP to the identified reuse sites in the project area. Alternatives will address
the needs of the prospective users and future requirements. The alternatives will be presented to
various groups and organizations and meetings will be conducted to address concerns and
comments, and make modifications as needed.
A technical evaluation of all alternatives will be performed~ including sizing, alignments,
methods of construction, materials, major obstructions, etc. The technical evaluation will be an
in-depth evaluation such that all major equipment and design elements are identified for the
detailed and proper development of alternatives (including conceptual level capital and O&M
costs, and implementation issues).
Task 2.2: Recommended Facilities Project Plan
The recommended project will be developed to a preliminary design stage, in sufficient detail for
the final environmental documentation to proceed, that will lead to the future final design and
construction. The recommended facilities will be developed to the facility-plan level as
described below.
Facilities - Preliminary design criteria will be determined for the recommended pipelines,
pump(s), and reservoir(s). Refined pipeline routes will be determined. Any potential design
hurdles and/or potential implementation issues (easements requirements, construction permit
acquirement period, constructability) that will need to be addressed and resolved to avoid delay
in future design and construction will be identified.
Cost Estimate and Benefits Summary - Planning level cost estimates for design, construction,
operation and maintenance of therecommended facilities will be developed. Cost estimates are
to be based on the review of historical cost estimates on similar jobs and similar area and on
information from recent local bids. The benefits associated with the recommended facilities
(including potable water savings) will be identified. The analysis shall include capital,
operations, and maintenance Costs, on-site costs and savings, etc.
Attachment 2
Implementation Schedule Development - An implementation schedule will be developed that
includes environmental documentation, Title 22 report development, market assurances,
permitting, design and construction.
Task 3 Preparation of Financial & Revenue Plan
The objective of this task is to prepare a construction financing .and revenue plan for the facilities
recommended under Task 2.
Task 3.1: Pricing Policy
A recycled water pricing policy will be developed, including all potential elements of a policy,
including connection fees, retrofit requirements, requirements for new developments, fraction of
potable costs, recycled water surcharges (paid by all water users), etc.
Task 3.2: Financial and Revenue Plan
A cash flow analysis, construction financing plan and a revenue program for the recommended
facilities will be prepared. The plan will include a sensitivity analyses to the failure of users to
connect to the system or use less recycled water than estimated, failure to receive outside
funding, changes in avoided cost of SFPUC water, and increases in capital costs.
All potential outside funding sources potentially available for design and construction and
associated requirements will be considered. Sources may include:
¯State grant funding
°State Revolving Fund Loan
°Funding source from other agencies (USBR, USEPA)
The plans will have adequate information, broken down in appropriate format, for use by the
City to pursue funding for the design and construction of the recommended facilities from
various funding sources. Requirements for each potential funding source shall be provided.
Task 4 Environmental Documentation
The objective of this task is to prepare the environmental review for the recommended facilities
so that the City can move forward with the design and construction of the facilities.
Task 4.1: Environmental Review
Consultant shall evaluate the environmental and social impacts of the alternatives including the
impacts on traffic, trees, businesses, community disruptions, wetland, noise, cultural resources,
etc. The evaluation shall include an analysis of indirect reuse of existing discharge of the
wastewater effluent, if any, that would be affected by any proposed reuse. The evaluation shall
be in sufficient detail to support the environmental document.
This review will allow the determination of the type of analysis required (negative declaration
/mitigated negative declaration or EIR). This task will include the preparation of the Initial
Study Checklist, preparation of a draft environmental document, submitting draft document for
public review, responding to comments and finalizing the environmental document.
Attachment 2
Task 4.2: Preparation of Environmental Document
The environmental document will be in accordance with all provisions of CEQA Plus and state
and federal funding guidelines.
Task 5 Public Outreach
A public outreach effort will be conducted including the preparation of fact sheets and other
outreach materials, the advertisement of public meetings and workshops on the recycled water
program. The RWQCP has an on-going program that engages a focused group of stakeholders in
workshops to discuss the long-term goals for the RWQCP. The stakeholders include local
environmental groups, local businesses, agencies, community groups, and the Partners.
Wastewater recycling is one of the main goals that the stakeholders have set for the RWQCP.
During the course of this planning project, consultant shall conduct workshops and involve the
stakeholders in alternatives evaluation in conjunction with the environmental review process.
The outreach will also include the potential end users, affected agencies, the general public,
SCVWD, and CalTrans. Other agencies that may be contacted include Bay Conservation
Development Commission, California Regional Water Quality Control Board, and California
Department offish and Game. Consultant shall also make presentations and attend meetings as
required by the SWRCB.
Task 6 Facilities Planning Report
This objective of this task is to prepare a Facilities Planning Report that meets the SWRCB
guidelines. Per the WRFP Guidelines, "the facilities planning grant must result in a final
facilities planning report. The final report must include an analysis of all of the essential
components 0fpotential project alternatives."
Task 6.1: Draft Facilities Planning Report Preparation
A Draft Facilities Planning Report, based on the development of the recommended facilities will
be prepared. The report shall follow the format and guideline of the SWRCB, comply with the
policies and procedures in the WRF Guidelines, and the recommended outline in the Guidelines
should be considered. The report will include all information and task outcomes per this scope
of work. The Draft will be provided to the SWRCB for review.
Task 6.2: Final Facilities Planning Report Preparation
Replies for all review comments from the SWRCB will be prepared. Changes to the draft report
will be incorporated as appropriate or required in order to complete the Final Facilities Planning
Report.
Task 7 Development of User Agreements
Use commitments from the prospective recycled water users will eventually need to be obtained.
This task will involve the identification and development of elements that will become part of a
draft model user contract. The City will prepare the user agreement.
Attachment 2
Task 8 Project Management
The City plans to engage a consultant to complete the scope of work outlined in this plan of
study. The objective of the project management task is to ensure adequate coordination and
communication between the consultant team and the City for the duration of the project and
provide the necessary quality control on the study deliverables. The objective of this task is also
to ensure timely coordination with the SWRCB, obtain feedback, guidance and approval over the
course of the study.
Task 8.1: Coordination and Communication
Project management shall be an integral part of the Consultant services. All activities, schedule,
and budgets of the project will be monitored and coordinated through the City Project Manager.
The consultant will provide budget and schedule tracking for the project and monthly summaries
of project status, and budget and schedule status. Projects meetings will be scheduled to update
City staff on schedule and budget status as well as to communicate any issues that may have
arisen or any decisions that the City may need to make.
Task 8.2: Meetings with SWRCB
Aninitial kickoff meeting between the City and SWRCB staff will be held to satisfy SWRCB
requirements. The purpose of the meeting will be to confirm overall study goals and objectives,
establish lines of communication, confirm critical assumptions (e.g: study area) that might affect
the directions of the study, and start gathering the information necessary for the completion of
the study. A "mid-course" meeting between the City and SWRCB staff will be held to present
the proposed structure and content of the Draft Facilities Planning Report to SWRCB and obtain
feedback and guidance prior to submission of the report to SWRCB.
Task 8.3: Quality Assurance and Quality Control
Quality assurance and quality control will be performed for all deliverables identified in this
project.
8.Schedule and Budget
The City of Palo Alto estimates that the proposed scope of work can be completed in one year.
The anticipated schedule and cash flow needs are shown in the table below, however, a final
budget and schedule will be established after completing negotiations with the consultant that
will perform the work and upon receipt of a grant commitment.
Attachment 2
Task
Public Outreach
Draft Facilities
Final Facilities
Develop Elements
of User Agreement
Budget
$5,000
$5,000
$5,000
$20,000
$5,000
$5,000
$25,000
$25,000
$10,000
$20,000
$5,000
$5,000
Coordination &
Communication
Meetings with
SWRCB
Assurance
and Quality
Control
$5,000
$5,000
$5,OOO
$150,000
The City of Palo Alto will have sufficient funds to cover the cash flow needs for the entire study.
If necessary, grant funds can be disbursed after segments of the work have proceeded and been
paid for.
Attachment 2
9. Potential Problems and Proposed Actions to Reduce Impact
The City of Palo Alto does not anticipate any potential problems that would delay progress in the
facility planning task. Encouraging the use of recycled water is high on the stakeholders’ priority
list for the RWQCP.
10. Entities Conducting the Study
The City of Palo Alto plans to hire a consultant to complete the scope of work for the facility
plan and preparation of environmental documents.
11. Proposed Budget
The total budget for this project is $150,000.
ATTACHMENT 3
MEM ORANDUM
TO:UTILITIES ADVISORY COMMISSION
FROM:UTILITIES DEPARTMENT
DATE:
SUBJECT:
OCTOBER 4, 2006
RECYCLED WATER MARKET SURVEY RESULTS
REQUEST
Staff recommends that the UAC recommend that the Council approve going forward with the
preparation of a facility plan and the development of environmental documentation for expanding the
recycled water distribution system in Palo Alto.
REPORT IN BRIEF
The attached Recycled Water Market Survey develops a preferred project to expand the use of
recycled water in Palo Alto. The estimated recycled water use for this expansion is 840 acre-feet per
year (AFY), or about 6% of the City’s current potable water usage. This is comparable to the
approximately 850 AF¥ of existing recycled water uses that replace potable water (primarily at the
City of Palo Alto Municipal Golf Course, Greer .Park, and in and around the Palo Alto Regional
Water Quality Control Plant (PARWQCP)).
The estimated cost for the preferred project is $16.9 million. This translates to a unit cost of
$1,959/AF for the project, when financed over 20 years. This compares to the wholesale cost of
water from the San Francisco Public Utilities Commission (SFPUC), which is currently $ 531/AF and
is projected to increase to about $1,600/AF by FY 2014-15.: Therefore, from a water supply
perspective for the City of Palo Alto, the project is not cost-effective at this time.
In order to go forward with this project, other beneficiaries or outside funding must be sought.
Outside funding may be available from the state and federal governments. In addition,the SFPUC
regional water system is interested in loca!, sustainable water supplies for the future. To be eligible
for state grant funds, a facility plan, including pre-engineering, must be completed. State grant funds
are available now (but not necessarily in the future) for facility planning work.
BACKGROUND
Water Inte~ated Resource Plan
The Water Integrated Resource Plan (WIRP) analysis has concluded that supplies from the SFPUC
are adequate in normal years, but that additional supplies are needed in drought years to avoid
shortag~es. However, the study also concluded that recycled water is a valuable long-term water
supply option due to the high cost of water from the SFPUC in the future as well as the availability
and value of recycled water in droughts. One of the WIRP Guidelines adopted by Council in
UAC October 4, 2006: Recycled Water Market Survey Page 1 of 4
December 2003 related to recycled water:
Guideline 3 - Actively participate in development of cost-effective regional
recycled water plans: Re-initiate discussions with the owners of the Palo Alto
Regional Water Quality Control Plant (PARWQCP) on recycled water development.
In concert with the PARWQCP owners, conduct a new feasibility study for recycled
water development. Since the feasibility of a recycled water system depends upon
sufficient end-user interest, determine how much water Stanford and the Stanford
Research Park would take.
Recycled Water Master Plan
The last time recycled water was seriously examined was in 1991-92, culminating in the April 1992
publication of the report, "Water Reclamation Master Plan for the Regional Water Quality Control
Plant" (Master Plan).
In April 1995, the Final Environmental Impact Report for the Master Plan was completed and
Council certified the Program EIR for the projects identified in the Master Plan [CMR:217:95].
However, at that time the Council decided not to go forward with the new projects, but to re-evaluate
the projects in the case of one or more of the following conditions: 1) changes in the PARWQCP
discharge permit requirements; 2) increased mass loading to the PARWQCP; 3) requests by partner
agencies of other local agencies; 4) availability of federal or other funds; and 5) supply-side issues
which may lead to increases in the value of recycled water from a water supply perspective. These
issues include water supply cost, water supply availability, regulatory and legislative initiatives, and
advanced treatment for potable reuse.
Since the Master Plan was completed in April 1992, there have been substantial changes that merited
a review of the assumptions used in that plan so that a fresh evaluation could be made of the costs
and benefits o fusing recycled water in Palo Alto. For example, the wholesale cost of water from the
SFPUC is projected to triple from $531/AF currently to over $1600/AF in FY 15-16. In addition, the
cost estimates of the Master Plan projects are over fourteen years old.
Since the completion of the Master Plan and the Program EIR, a project to build a component of the
Master Plan has moved forward. This project, the Mountain View-Moffett Field Area Water Reuse
Project, is intended to restore service to Shoreline Golf Links and Park and to serve new loads at
Moffett Field and other irrigation sites along US Highway 101, totaling about 1,200 acre-feet per
year (AFY).
As discussed with the UAC in January and February 2004, the City of Palo Alto Utilities decided to
contribute $1 million to the Mountain View-Moffett Field Area Water Reuse Project to ensure that
the pipeline would be large enough for future Palo Alto loads. Another $1 million will be paid if
Palo Alto connects to the pipeline to serve recycled water loads in Palo Alto.
Recycled Water Market Survey
As a first step to re-evaluating the feasibility and cost-effectiveness of expanding recycled water
usage in Palo Alto, CPAU has sought to update some aspects of the Master Plan. As reported to the
UAC October 4, 2006: Recycled Water Market Survey Page 2 of 4
UAC in August 2005, the City engaged a consultant, RMC Water and Environment, to update the
Master.Plan. The project cost $85,000 was completed in June 2006 with the issuance of the final
report (attached).
DISCUSSION
The objectives of this project were to update the 1992 Master Plan estimate of the potential market
for recycled water usage in the City and to update the cost estimate for the facilities needed to bring
the recycled water to those end users.
The 1992 Master Plan identified a potential new market of about 5,000 AFY for recycled water in
the service territory of the RWQCP. Of that, about 2,430 AFY were for uses within the City of Palo
Alto. A recommended project was identified that would provide almost 3,000 AFY for a cost of $30
million (in 1992 dollars). The amount identified for use in the City of Palo Alto was 1,279 AFY.
The resulting unit cost for the recycled water project identified in the 1992 Master Plan was about
$1,100/AF (in 1992 dollars).
The 2006 Recycled Water Market Survey reviewed the sites identified in the 1992 Master Plan and
revised the market potential using currently available information. In addition, the customers with
the largest potential uses were asked about their support for or opposition to using recycled water.
The customers largely supported the use of recycled water if the quality of the water was acceptable.
One of the concerns of potential recycled water customers is the level of salinity of the recycled
water. The RWQCP is aware of these concerns and is investigating the sources of the salinity and
possible solutions to lower the salinity levels to more acceptable levels.
The 2006 Market Survey identified 1,693 AFY of potential recycled water demand in the City of
Palo Alto. The project identified in the 2006 Market Survey would serve about 840 AFY, of which
the majority of the end use (720 AFY) is in the Stanford Research Park (SRP) area. Thus, the SRP is
the "focus area" for the project. The pipeline alignment selected to serve the focus area Would
connect to the planned recycled water pipeline along the Bayshore Freeway at San Antonio Rdad and
generally follow East Meadow and Park Boulevard to the SRP. The estimated cost of the project is
$16.9 million. This results in a unit cost for the recycled water of $1,959/AF.
Since the future cost of water from the SFPUC is projected to be about $1,600/AF, the project does
not appear to be cost-effective from the City of Palo Alto Water Utilityperspective. However, other
benefits from the project may exist if the project is examined from a broader perspective. For
example, the marginal cost of new water resources for the region may be much greater than the cost
of water from SFPUC. In this case, the project may be cost-effective and a candidate for funding
from a state or regional perspective.
State and federal grant and loan funds may be available for the recycled water project. Additional
planning and design work must be completed in order to be eligible for such funds. Thus, in order to
be in line for such funding, the next step is to conduct a facility plan and prepare environmental
documents. It is best to proceed apace with the facility plan since state grant funds are available now
for such work. These funds may not be available in the future.
UAC October 4, 2006: Recycled Water Market Survey Page 3 of 4
POLICY IMPLICATIONS
Examination of the potential for expanding the use of recycled water is consistent with City policy.
Any decision on going forward to a next step, including preparation of a facility plan and pre-
engineering, must be approved by the Council.
RESOURCE IMPACTS
With the completion of the attached report, the financial obligations required for preparation of the
report cease. However, if Council approves proceeding with the development of a facility plan and
preparation of environmental documentation, an additional outlay of funds is necessary, The
estimated cost for a consultant to complete this work is about $150,000. Grants are available from
the State Water Resources Control Board to cover half of this cost and staff would pursue this
funding so that the net cost to the Water Fund would be about $75,000.
NEXT STEPS
In FY 06-07, staff will seek Council approval to go forward with the preparation of a facility plan
and the development of environmental documentation for expanding the recycled water distribution
system in Palo Alto. Staff will ensure that the project is included in the Bay Area Integrated
Regional Water Management Plan to maximize the chances that it will receive state grant funding for
construction. A decision to go forward with construction will be made by the Council.
ATTACHMENT
City of Palo Alto - Recycled Water Market Survey Final Report, Prepared by RMC Water and
Environment, June 2006
PREPARED BY: Jane Ratchye, Senior Resource Planner
APPROVED BY:
C~VE SERVICES
UAC October 4, 2006: Recycled Water Market Survey Page 4 of 4
Attachment
City of Palo Alto - Recycled Water
Market Survey Report
Final Report
Prepared by:
July 2006
Table of Contents
Acknowledgements
List of Abbreviations
Executive Summary ........................................................................................................: ............i
ES-1
ES-2
ES-3
ES-4
Background ...............................................................................................................i
Study Purpose ............................................................................................................i
Findings and Conclusions .......................................................................................i
Next Steps .....................................................................’ ............................................ii
Chapter 1
1.1
1.2
1.3
Chapter 2
2.1
2.2
2.2.1
2.2.2
2.3
2.3.1
2.3.2
2.3.3
2.3.4
2.3.5
2.4
Chapter 3
3.1
3.1.1
3.1.2
3.1.3
3.1.4
3.2
3.2.1
3.2.2
3.2.3
3.2.4
3.2.5
Chapter 4
4.1
4.2
4.3
4,3.1
4.3.2
4.3.3
4.4
4.4.1
4.4.2
Introduction ...........................................................................................................1-1
Background ............................¯ ..................................................................................1-1
Study Objectives and Approach ..............................................................................1-3
Report Content .............................................................................~ ..........................1-3
Market Analysis .....................................................................................................2-1
Treatment Requirements for Discharge and Reuse ................................................2-1
Market Analysis Procedures ...........~ .................., ...................., ...............................2-1
Methodology ...............~ ................................................................ .....................; ......2-1
Assessment Criteria ................................................................................................2-2
Market Assessment Results .............................: ......................................................2-4
Major CuStomers ...........................................................................~ ..........................2-5
Geographic Analysis ...............................................................................................2-7
Water Quality Needs and Acceptance of Recycled Water ....................................2-10
Pumping/Storage Requirements ...........................................................................2-10
Potential for Expansion to Other Areas .................................................................2-10
Project Focus Area ................................................................................................2-11
Conceptual Design ................................................................................................3-1
Basis for Conceptual Design .................., ................................................................3-1
Focus Area Pipeline Alternatives ............................ ................................: ...............3~1
Preferred Project Description ..................................................................................3-3
Preferred Project Hydraulics ...................................................................................3-4
Preferred Project Cost Estimate ..............................................................................3-5
Preferred Project Implementation ...........................................................................3-8
Facility Planning ......................................................................................................3-8
Environmental Review ............................................................................................3-8
Market Assurances ..............................,,.~ ...............................................................3-8
Permitting ....................: ........................,.,, ......" ........................................................3-8
Public Outreach .......................................................................................................3-8
Financing Plan and Revenue Program ...............................................................4-1
Reuse Incentives .....................................................................................................4-1
Funding Sources .....................................................................................................4-2
Project Costs and Revenue Sources ......................................................................4-3
Project Total Costs and Financing Costs ................................................................4-3
Financial Analysis ...................................................................................................4-4
Potable Water and Recycled Water Cost Comparison ...........................~ ...............4-5
Project Cost and Demand Sensitivity Analysis .......................................................4-5
Project Cost Sensitivity ...........................................................................................4-5
Demand Sensitivity .................................................................................................4-5
List of Tables
Table 2-1:
Table 2-2:
Table 3-1:
Table 3-2:
Table 3-3:
Table 3-4:
Table 4-1 :
Table 4-2:
List of Fiqures
Figure 1-1:
Figure 2-1:
Figure 2-2:
Figure 2-3:
Figure 2-4:
Figure 3-1:
Figure 3-2:
Figure 3-3:
Figure 4-1 :
Figure 4-2:
Figure 4-3:
References
Existing Recycled Water Users .....................................................................2-5
Large Potential Recycled Water Customer Demands ..................................2-6
Alternative A and B Comparison ..................................................................3-2
Hydraulic Design Criteria ........................................ .....................................3-4
Assumed Unit Raw Construction Costs .......................................................3-6
Estimated Cost of Preferred Project .............................................................3-7
Project Total and Financing Costs ...............................................................4-3
Annual Projections of Project Costs and Revenues ....................................4-4
RWQCP Service Area ................................................................................1-1
Potential Recycled Water Users ..................................................................2-8
Recycled Water Customer Concentrations/Potential Focus Areas .............2-9
Other Future Recycled Water Projects .....................................................2-11
Project Focus Area ...................................................................................2-12
Alignment Alternatives A and B ..................................................................3-1
Preferred Project Alignment ...................................... ..................................3-3
Project Schedule, ........................................................................................3-8
Recycled Water Projects Cost Comaprison ................................................4-5
Recycled Water Unit Cost Sensitivity to Project Costs ...............................4-6
Recycled Water Unit Cost Sensitivity to Recycled Water Demand .............4-6
Appendices
APPENDIX A - Customer Survey Form
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
-List of Potential Recycled Water Users
-List of Potential Recycled Water Users within Focus Area
-Model Results
-20-Year Projection Project Cash Flow
June 2006 ii
Acknowledgements
The Palo Alto Recycled Water Market Survey Project represents a collaborative effort between RMC, the
City of Palo Alto and local stakeholders. We would like to acknowledge and thank the following key
personnel whose contributions and assistance were instrumental in the preparation of this Report.
Jane Ratchye - City of Palo Alto Utilities Department
Virginia Waik - City of Palo Alto Utilities Department
Jerry Brown - City of Palo Alto Utilities Department
Bruce Lesch - City of Palo Alto Utilities Department
June 2006
List of Abbreviations
AF
AFY
BARWRP
BAWSCA
CCI
CEQA
DHS
DWR
EIR
ENR
FPGP
FY
GIS
gpd
gpm
HCF
IRWMP
LTGS
mgd
mg/L
MND
MPN
NEPA
NMFS
O&M
RWQCP
SBWR
SCVWD
SFPUC
SRF
SWRCB
USBR
USFWS
acre foot
acre foot per year
Bay Area Regional Water Recycling Program
Bay Area Water Supply and Conservation Agency
Construction Cost Index
California Environmental Quality Act
California Department of Health Services
Department of Water Resources
Environmental Impact Report
Engineering News Record
Facilities Planning Grant Program
fiscal year
geographic information system
gallons per day
gallons per minute
hundred cubic foot
Integrated Regional Water Management Plan
Long-Term Goals Study
million gallons per day
milligram per liter
Mitigated Negative Declaration
Most Probable Number
National Environmental Policy Act
National Marine Fisheries Service
operations and maintenance
Palo Alto Regional Water Quality Control Plant
South Bay Water Recycling
Santa Clara Valley Water District
San Francisco Public Utilities Commission
State Revolving Fund
State Water Resources Control Board
United States Bureau of Reclamation
United States Fish and Wildlife Service
June 2006 iv
Executive Summary
ES-1 Background
Recycled water use is expanding in the South San Francisco Bay Area. The Palo Alto Regional recycled
water system is expanding into Mountain View and potentially beyond. The South Bay Water Recycling
(SBWR) program, the largest in the San Francisco South Bay Area, continues to expand southward. It
has been fourteen years since the City of Palo Alto completed its Recycled Water Master Plan. Two key
goals of the Palo Alto Regional Water Quality Control Plant (RWQCP), its partners, neighboring
communities and other stakeholders (such as the Santa Clara Valley Water District [SCVWD]), include
the use of recycled water:
Water Supply Management - A key long-term goal of the RWQCP’s stakeholders is to
maximize recycled water as a supplemental water source, thus (1) increasing water supply
reliability, by freeing up drinking water, currently used for irrigation and other non-potable
uses, for strictly potable uses, (2) providing a dependable, locally controlled water source, (3)
protecting landscape value as irrigation and other non-potable uses are the first to be cut back
during droughts, and most importantly, (4) reducing reliance on imported water.
Regional Connectivity - The RWQCP’s long-term endeavor is to establish connectivity with
the recycled water producers (e.g. Sunnyvale) and users in the region. Examples of how the
regional connectivity will benefit the region include: (1) improving recycled water system
redundancy and reliability to the customers, (2) sharing storage and/or system capacity, and (3)
helping water agencies in the region reach their recycled water use goals, thereby improving
water supply management regionally.
A recycled water project within the City of Palo Alto will meet these criteria, in addition to improving
San Francisco Bay Conservation by reducing the discharge of substances that could impact sensitive Bay
environment.
ES-2 Study Purpose
The purpose of this study is to:
¯Update the Palo Alto Recycled Water market
¯Update the Palo Alto Recycled Water system cost estimate
ES-3 Findings and Conclusions
This Study determined the following:
*The market for recycled water is less than that estimated in 1992.
o The total city-wide potential demand is 1,693 AFY (compared to 2,674 AFY in the 1992 study),
not including Stanford University.
The focus of the study was on the irrigation systems served by the City’s potable water supply
served by SFPUC water.
~ Customer surveys showed that customer recycled water concerns focus on salinity. SCVWD has
partnered with Mountain View and SBWR to investigate the impact of salinity on redwood trees.
Reduction of recycled water salinity from current 900 mg/L (compared to SFPUC water salinity
levels of less than 100 rag/L) may be required in the future to meet customer concerns.
The Stanford Research Park area is the best opportunity for expansion of the Palo Alto recycled
water system, with an annual demand of approximately 720 AFY of recycled water. This area is
deemed the Project Focus Area.
June 2006 i
City of Palo Alto - Recycled Water Market Surve__y_ Report Executive Sumrna~..~=.
FINAL
Future expansions of recycled water projects within the RWQCP service area include Stanford
University, East Palo Alto, and Los Altos, based on requests from those outside interests.
The proposed pipeline alignment to serve Stanford Research Park was selected to maximize the
recycled water market and minimize utility and traffic impacts.
The pipeline is sized to provide peak hour service to the Project Focus Area. A remote reservoir
could enable future pipeline extensions to serve additional markets.
The project capital cost to serve roughly 840 AFY of recycled water is $16.9 million, which
represents roughly a $1959/AF project, including operating and maintenance costs.
State loan and grant opportunities are anticipated for this project. Without grant assistance,
recycled water rate would need to be roughly 130% of the potable water rate in order to cover all
costs,
Market variation and/or the need for salinity management are two factors that could impact unit
cost and associated break-even cost of this project.
ES-4 Next Steps
Based on the increasing emphasis on developing local supplies in the region, and the projected
availability of state, federal, and possibly local funding for recycled water projects, it is recommended
that the City of Palo Alto continue this initiative by performing the following steps:
Submit an application to the SWRCB requesting planning grant funding assistance (up to $75,000
match) to conduct a facility plan and preliminary engineering for the recommended project.
-Proceed with facility planning and environmental documentation for the recommended project.
¯Engage with the Palo Alto RWQCP and the City of Mountain View regarding a regional salinity
management initiative.
¯Pursue local funding support from SFPUC/BAWSCA and SCVWD.
o Track the Bay Area Integrated Regional Water Management Planning initiative to help assure
that this recommended phase of the Palo Alto RWQCP recycling program is eligible for future
state grant funding.
June2006 E$-ii
Chapter 1 introduction
The City of Palo Alto Recycled Water Market Survey Study (Study) was prepared by RMC Water and
Environment (RMC), as a consultant to the City of Palo Alto (city). The purpose of the Project is to (1)
update the 1992 Water Reclamation Master Plan’s Market Survey of the City of Palo Alto and (2) update
the Master Plan’s project cost estimates based on the Palo Alto recycled water market survey.
This chapter presents the background and the goals of the Study. It also identifies the Study objectives,
and describes the report organization.
1.1 Background
The RWQCP is located on the San Francisco Bay, in the northeastern portion of the City of Palo Alto. It
provides treatment and disposal of wastewater to the Cities of Palo Alto, Mountain View and Los Altos,
the Town of Los Alto Hills, the East Palo Alto Sanitation District and Stanford University, known
collectively as the RWQCP Partners. Figure 1.-1 shows the RWQCP service area. The RWQCP has a
design average dry weather flow capacity of 38 million gallons per day (MGD) and a current flow of
about 23 MGD.
Figure 1-1: RWQCP Service Area
Although the disinfected secondary effluent from the RWQCP is predominantly discharged to the San
Francisco Bay through an effluent outfall, the RWQCP has a 4 MGD recycled water facility that filters
and disinfects the effluent to meet the requirements for "unrestricted use" as defined in California Code of
Regulations, Title 22, Sections 60301 through 60355. The RWQCP currently delivers about 1 MGD of
June 2006 1-1
City of Palo Alto - Recycled Water Market Survey Report Chapter I Introduction
FINAL
recycled water to a number of irrigation sites during the summer months under its Water Reuse Program.
The Mountain View/Moffett Field Area Reclaimed Water Pipeline Project will expand the recycled water
use for a total average demand of 1.4 MGD, 3.2 MGD of peak day demand. Although an additional
recycled water project serving the City of Palo Alto may exceed the capacity limits of the recycled water
facility, the RWQCP decision to move forward with a future UV project at the RWQCP, that would
eliminate the need for separate Title 22 facilities, will help with the capacity issue. Coordination between
the UV project and any City of Palo Alto recycled water project will help address any capacity concerns.
In 1992 the RWQCP completed a Water Reclamation Master Plan for the Palo Alto RWQCP (Brown and
Caldwell, 1992) and the accompanying program-level Final Environmental Impact Report (EIR) (CH2M
Hill, Inc., 1995) that served as a framework for developing a regional water reuse system for the RWQCP
service area. However, the Master Plan recommendations were not implemented because costs of the
project were not outweighed by its benefit.
In December 2001, the RWQCP published a Long-Term Goals Study Report that concluded a one-year,
stakeholder driven effort to develop long-term goals for the RWQCP. Water recycling was identified as a
key priority for the RWQCP. In addition, developing the recycled water activities was also considered as
a key means to achieve a number of the other long-term goals such as improving water supply reliability,
providing a dependable, locally controlled water source, and reducing reliance on imported water.
Funding opportunities from the State Water Resources Control Board (SWRCB) triggered the RWQCP
decision in May 2003 to move forward with the Mountain View/Moffett Field Area Reclaimed Water
Pipeline Project, one of the projects identified in the 1992 Master Plan. In 2004, the RWQCP completed
a facilities plan (RMC, 2004) and pre-design for the Mountain View/Moffett Field Area Reclaimed Water
Pipeline Project. The project will replace an existing deteriorating pipeline to Shoreline Golf Course in
Mountain View and extend the pipeline to serve the Mountain View-Moffett area. The pipeline
replacement will restore the golf course connection and will provide recycled water services to the
Shoreline community. The project is currently in design phase.
Palo Alto Golf Course, RWQCP, Emily Renzel Marsh, and Greer Park are the existing major users of
recycled water. The Mountain View/Moffett Field Area Reclaimed Water pipeline is sized to serve future
users in the City of Palo Alto via several connections at Embarcadero Road and Bayshore Avenue, at
Greer Park, and at San Antonio Road. However, the City of Palo Alto currently has no specific plans for
using the connections. The City of Palo Alto has therefore initiated this Study to provide the information
necessary to decide whether to extend a recycled water pipeline into Palo Alto.
Extending recycled water pipelines into Palo Alto will enable the City and its partners to achieve several
key goals of the City, neighboring communities and other stakeholders:
Water Supply Management - A primary long-term goal of the project is to maximize recycled
water as a supplemental water source, hence (1) improving water supply reliability by using
drinking water, currently used for irrigation and other non-potable uses, for potable purposes, (2)
providing a dependable, locally controlled water source, (3) securing a source that’ will be
available even in droughts to serve in irrigation and other non-potable uses, and (4) reducing
reliance on imported water.
San Francisco Bay Conservation - The effluent from the RWQCP is currently discharged to
South San Francisco Bay. There are indications that the San Francisco Bay Regional Water
Quality Control Board may impose more stringent effluent limits for constituents such as trace
metals and trace organics. The project will help conserve the San Francisco Bay by reducing the
wastewater constituent mass loadings to the Bay.
June 2006 1-2
City of Palo Alto - Recycled Water Market Survey Report Chapter I Introduction
FINAL
1.2 Study Objectives and Approach
There are two main objectives of this study:
Review and confirm or update the list of potential recycled water users within the City of Palo
Alto and potential demand in the neighboring communities such as Stanford and Los Altos.
Update the proposed project cost estimate required for delivery of recycled water to the City of
Palo Alto and potential furore expansions.
Technical activities performed by RMC as part of this Study include site investigation, market analysis,
conceptual project design, and preparation of a financing and revenue plan. The details and results of
these services are presented and discussed in Chapters 2 through 4 of this report.
1.3 Report Content
This report is divided into 4 chapters, as outlined below:
o CHAPTER 1 - INTRODUCTION (this section)
CHAPTER2-MARKETANALYSIS
CHAPTER 3 - CONCEPTUAL DESIGN
CHAPTER 4 - FINANCING PLAN AND REVENUE PROGRAM
This report also contains references and appendices that can be found at the end of this report.
APPENDIX A - Customer Survey Form
APPENDIX B - List of Potential Recycled Water Users
APPENDIX C - List of Potential Recycled Water Users within Focus Area
APPENDIX D - Model Results
APPENDIX E - 20-Year Projection Project Cash Flow
June 2006
Chapter 2. Market Analysis
A recycled water market assessment was conducted to identify and evaluate probable recycled water users
within the City of Palo Alto. The results of the recycled water market assessment presented in this
chapter provide the basis for project alternative development and evaluation and expansion of
recommended projects.
This chapter describes the regulatory framework affecting recycled water, illustrates the market analysis
procedures, and identifies and locates potential and existing recycled water users.
2.1 Treatment Requirements for Discharge and Reuse
In general, recycled water operations in California are governed by California Department of Health
Services (DHS) regulations and guidelines. Title 22, Division 4, Chapter 3 of the California Code of
Regulations serves as the source for regulations relating to recycled water. Current regulations, including
Title 22 are compiled in the publication California Health Laws Related to Recycled Water "The Purple
Book" updated in June 2001.
The recycled water produced at the RWQCP meets the requirements for disinfected tertiary recycled
water, including the following criteria:
The filtered wastewater has been disinfected by either: (a) A chlorine disinfection process
following filtration that provides a CT value--the product of total chlorine residual (C) and
modal contact time (T) measured at the same point-of not less than 450 milligram-minutes per
liter at all times with a modal contact time of at least 90 minutes, based on peak dry weather
design flc~w; or (b) A disinfection process that, when combined with the filtration process, has
been demonstrated to inactivate and/or remove 99.999% of the plaque-forming units of F-specific
bacteriop1~age MS2, or polio virus in the wastewater. A virus that is at least as resistant to
disinfectic, a as polio virus may be used for purposes of demonstration.
The medk~.n concentration of total coliform bacteria measured in the disinfected effluent does not
exceed a most probable number (MPN) of 2.2 per 100 milliliters utilizing the bacteriological
results of the last seven days for which analyses have been completed and the number of total
coliform bacteria does not exceed an MPN of 23 per 100 milliliters in more than one sample in
any one 30-day period. No sample shall exceed an MPN of 240 total coliform bacteria per 100
milliliters.
The use of disinfected tertiary recycled water that is produced at the RWQCP is permitted for all
irrigation and industrial uses that were identified through this market analysis.
2.2 Market Analysis Procedures
This section examines the market assessment methodology and criteria that were utilized in this Study.
2.2.1 Methodology
The following resources were considered to gather data on water usage for potential recycled water users:
Water Reclamation Master Plan for the Palo Alto Regional Water Quality Control Plant (Brown
and Caldwell, 1992) - The 1992 Master Plan provides a cursory overview of potential recycled
water demands within the City of Palo Alto.
Regiona! Recycled Water Facilities Planning Study (RMC, 2004) - The Facilities Planning Study
defines the Mountain View/Moffett Field Area Water Reuse Project details with a general
examination of recycled water use in the City of Palo Alto. Most of the data for the City of Palo
Alto was derived from the 1992 Brown and Caldwell Master Plan.
June 2006 2-1
City of Palo Alto - Recycled Water Market Survey Report Chapter 2 Market Analysis
FINAL
Input from staff from the City of Palo Alto (Virginia Waik, Jane Ratchye, Roland Rivera)
obtained during meetings, through phone conversations, and through e-mails. Water meter data
was provided by the City of Palo Alto in the following forms:
o Annual and monthly usage data (2003-2005) for city-owned property
o Monthly usage data (2000-2005) for other locations including the Stanford Research Park
and other sites identified in the 1992 Master Plan
Monthly usage data for Alta Mesa Hills Memorial Park and Palo Alto Golf and Country
Club.
,,Acreage analysis, For potentiaI use areas not covered by any of the above documents, an acreage
and water usage analysis was performed. Acreage was estimated based on input from Roland
Rivera at the City of Palo Alto.. The average irrigation requirement was estimated to be two feet
per year, based on irrigation at City of Palo Alto parks locations. Average annual demands
estimated using this method are considered less accurate and more conservative than those
calculated based on actual water meter data provided by the City of Palo Alto.
-* Surveys of users with high recycled water usage potential - A survey developed by RMC and
. distributed by the City of Palo Alto was used to obtain personalized information for potential
users of over 10 acre-feet per year (AFY) as described in Section 2.3.1. The survey was
administered in order to collect information on average and peak water usage, retrofit needs,
irrigation schedules, and any concerns the users might have regarding implementation of a
recycled water program. Additionally, some of the larger users were also interviewed (either in
person or over the phone) with the intent of reviewing the survey, addressing concerns, and
answering any questions.
To obtain the most accurate results, estimated annual recycled water usage for each potential use area was
determined using one of the following techniques, presented in preferential order: (1) dedicated irrigation
meter data, (2) percentage of actual water usage data averaged over the last two years (fiscal years 2003-
2004 and 2004-2005), (3) percentage of actual water usage for the past year (fiscal year 2004-2005), (4)
acreage analysis and (5) data from the 1992 Master Plan. For future users, annual water usage is
estimated based on potential irrigated acreage and an assumed water demand of two feet per acre per year.
This water demand was estimated based on a two year average water usage correlated to acreage for City
of Palo Alto parks.
In general, potable water use records indicate that water usage for 2004-2005 was lower than previous
years. The City of Palo Alto has determined that water consumption was low for the 2004-2005 due to
higher than normal precipitation levels during the spring of 2005, After correcting for weather, water
consumption was stil,1 down by 2.7 percent for the quarter.. As described above, the average potable water
usage was determined by averaging the past two years of water usage data to be consistent with users that
do not have a long water Usage history. The fact that this estimate includes data from an abnormally wet
year should be considered. For an annual potable and recycled water usage comparison for 2000-2005 for
all potential users, refer to Appendix B.
2.2.2 Assessment Criteria
A number of criteria were used to assess each of the potential recycled water uses and determine if
¯ potential recycled water customers should be included in future recycled water projects. These criteria
were developed to ensure that sufficient information would be collected through the market assessment to
develop sound project alternatives.
A. Average Annual Demand
Average annual demand is the existing or potential average annual recycled water demand for each
potential recycled water customer. In conducting this market assessment, actual past water usage
based on water meter data was determined to be the best method on which to base average annual
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recycled water demand; therefore, complete water meter data was used when available. In order to
accurately compare usage patterns among users with different water record lengths, annual usage
from the last two years was used when available. If usage data existed for a longer period of time,
this information was used to qualitatively examine the annual and monthly usage patterns of large
users. Potential recycled water usage was estimated to be:
Approximately 55% of total potable water usage (based on information that RMC received
from the survey interviews) when there was only one combined meter (domestic and
irrigation).
Equal to the total meter flow when the meter is designated an irrigation meter.
Equal to the sum of the total irrigation flow plus 20% ofthe domestic flow, in cases where
there is both irrigation and a domestic meter on the same site and the customer has the
potential of using recycled water as process water or cooling tower water. ~
Equal to the total irrigation flow only, in cases where there is both irrigation and a domestic
meter on the same site and the customer has no potential of using recycled water as process
water.
If the customer is a Park or Median the potential recycled water flow equals the total meter
flow, regardless of meter type.
If the customer is a School the potential recycled water flow equals 25% of the total meter
flows (based on irrigation acreages versus total meter demand)
[] Fire meters shall not use recycled water.
[]Average annual demand of recycled water was used to locate customer concentrations within
the City.
B. Peak Demands
Peak monthly demand - a monthly peaking factor was applied to the average monthly flow to obtain
the average daily flow for a peak month. Using data from City of Palo Alto monthly irrigation water
records for City parks, a monthly peaking factor was estimated at 2.3. This peaking factor is
consistent with the peaking factor used in the 1992 Master Plan and the 2004 Facilities Planning
Study.
Peak hourly demand - an hourly peaking factor is applied to the maximum month, average day peak
to obtain the maximum month, average day, peak hour flow. This peaking factor was estimated at 3.0
and is consistent with the peaking factor used in the 1992 Master Plan and the 2004 Facilities
Planning Study. Peak hourly demands were used to evaluate required pipeline diameters to serve
potential concentrations of customers.
C. Water Quality Needs
The water quality needs that were assessed are those that are operational rather than regulatory in
nature. Examples of operational water quality issues for urban water recycling customers include
salinity, turbidity, and chlorine residual. Water quality needs were used to determine if any potential
customers should be eliminated from the consideration for potential future recycled water projects.
~ Through interviews and surveys with potential recycled water customers, it was determined that some of the
current domestic water supply may be used for process or cooling tower water. For most of the potential recycled
water customers, minimal information was available to determine the actual percentage of domestic water that is
utilized for process water and!or cooling tower water. In the limited cases where information was available, the
average use of domestic water for process water and/or cooling tower water was determined to be approximately
20%. For this reason, the 20% average was used for W-4 meter data.
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Particular water quality needs were identified through the customer survey that was completed by
customers. Most surveyed customers indicated a concern for the salinity content of the recycled
water, which is much higher than the salinity content of the current potable supply. The salinity
content is of particular concern for water needs for industrial processes such as cooling towers.
D. Retrofit Needs
All existing irrigation systems will be retrofitted to include an additional meter for recycled water and
provided with an air gap for the potable system. Other onsite retrofits include purple sprinkler heads
installation, purple pipe installation, recycled water valve boxes covers, prevention of cross-
connection, and any irrigation pattern changes needed to isolate the recycled water system from water
fountains, picnic area, etc. Potential customers were evaluated to determine whether their sites had
any infeasible retrofit requirements.
E. Implementation Considerations and Customer Concerns
Key implementation considerations and customers concerns were collected as part of the recycled
water survey as described in Section 2.2.1. The main concern was water quality (particularly salinity).
Those interviewed expressed concern that existing landscaped areas might be adversely impacted by
the higher salinity associated with recycled water. Other typical concerns included site retrofits,
service timing, cost and reliability. These considerations were examined to determine whether any
customers should not be included as potential recycled water customers.
F. Delivery Pressure and Reliability Needs
Determining the level of reliability in recycled water supply will be necessary when developing
design criteria for the storage, conveyance, and distribution components of the project alternatives.
However, it is assumed that potable water will continue to be available to each customer to supply
necessary water demands in the event that the recycled water system is down for a prolonged period
of time. In case of an interruption in recycled water service, RWQCP will limit plant downtime and
restore service as quickly as possible. Plant downtimes are typically limited to 72 hours based on
other recycled water systems. Since customer connections to the potable water supply would be
maintained, users could switch to potable water in the event of a recycled water outage. Additionally,
the availability of recycled water for irrigation improves irrigation reliability during drought
situations since irrigation customers may have a reduced potable supply under these conditions.
Therefore, reliability needs are not further discussed in this Study.
2.3 Market Assessment Results
The predominant potential use of recycled water within, the City of Palo Alto was determined to be
landscape irrigation based on the Facility Plan and the 1992 Master Plan. Other potential uses of recycled
water within the City include some industrial applications (i.e. cooling .towers). Dual plumbing retrofits
in existing buildings are prohibitively expensive, thus those applications are not included in this Study)
Initially, all identified potential customers within the service area were examined and evaluated based on
the assessment criteria described in Section 2.2.2. Because the majority of the customers were landscape
irrigators, the assessment criteria did not help in distinguishing certain customer(s) for a preferred
recycled water project.
Additionally, information was collected from the customers with high potential water usage (i.e. high
water demand) using a written su~ey administered by the City of Palo Alto to establish water use
patterns, peak water use, retrofit needs and general perceptions concerning recycled water. Survey results
further backed the preliminary analysis in showing that most of the assessment criteria did not help in
2 This observation is based on local and statewide jurisdictions. An additional hindrance to dual plumbing includes
the required annual inspections.
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distinguishing certain customer(s) for a preferred project. Water quality needs, retrofit needs,
implementation concerns, and customer concerns were similar throughout.
The main factor that distinguished the potential customers from one another is the potential recycled
water demand and the location of that demand relative to other large potential users of recycled water.
The estimated average recycled water demands for potential recycled water customers in the City of Palo
Alto were grouped and tabulated based on geography. The estimated average recycled water demand for
the entire City of Palo Alto service area is 1,693 AFY with a peak month average day demand of
approximately 3.48 million gallons per day (MGD). Approximately, 590 AFY of this calculated demand
was calculated from dedicated irrigation only meters (W7 meters). Also approximately 673 AFY of the
total calculated demand is assumed irrigation demand calculated as a percentage of combined domestic
meters (W4 meters) and from estimates based on site acreages. The remaining 430 AFY is considered
non-irrigation demand (process and cooling towers). The total calculated demand does not include the
existing recycled water customers within the City of Palo Alto as listed in Table 2-1. The 1992 study
estimated 2,844 AFY of total recycled water demand within the City of Palo Alto; however this number
included existing recycled water users such as the Palo Alto Municipal Golf Course and Greer Park. If.
current recycled water demands are subtracted from the 1992 total potential of 2,844 AFY, the calculated
1992 demand is approximately 2,674 AFY, which is about 58% over the calculated 2006 demands. This
discrepancy presumably is due to the inaccuracy of assumptions used in the 1992 Master Plan where most
of the demand was based on the irrigation acreage and a generous estimate of irrigation demand.
Table 2-1: Existing Recycled Water Users
L ";560RWQCP~560 I
PaloAlto Municipal Golf Coursea {119 ............~ ..................
14_0. ................
_G_[._eer Park .............................[ ...................5__1. ...................! ................: ................................~.1_
Emil}, Renzel Marsh 29 29
a.Palo Alto Municipal Golf Course has ’the potential for an additional 160 AFY of potable water to be converted to
recycled water. The use of recycled water at the golf course could increase by reducing the salinity of the
recycled water.
2.3.1 Major Customers
Major customers were grouped together by geography and organization such as the City of Palo Alto
owned/operated locations or Stanford Research Park. An overview of these groups’ potential recycled
water usage follows in Table 2-2. A complete list of potential users can be found in Appendix C.
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Table 2-2: Large Potential Recycled Water Customer Demands
__C.it_y__o_f_P_alo Alto Owned and/or Operated ..........~7.~6~ .....t. ........0_:.6~_ ........!. ....~1.=5~
Stanford Research Park 608 ~ 0,54 : 1,25
Palo Alto Hills Golf and CountryC_l_u_b ...............o~_=_ 13~O__.i ....._°.;_!_2. ......~_, ....._0._2Z
Stanford HosRi.t_a_JloandC~ini_~_s ........................~___10_7_ .....i ...._0:_1__0 ........_0.=2~2
VA Palo Alto Health Care t 42 i~. ...._0=~_4_ .......!___0._0.9_._.
Caltrans ! 12 ,! , 0,01 0.02
A. City of Palo Alto Owned and/or Operated Locations
The City of Palo Alto uses water for irrigation at various City parks, road medians, and for industrial
uses (e.g. Municipal Service Center vehicle washing). Most of the data used for this portion of the
market analysis was derived from annual water usage data for 2003-2005 provided by the City of
Palo Alto. Also included in this portion of the Study are the Palo Alto Unified School District
schools.
The market analysis identified 107 potential recycled water users for the City of Palo Alto, with 22
users having greater than 10 AFY estimated average annual usage and 5 users having greater than 25
AFY annual usage. The average annual demand for the City was determined to be 760 AFY (0.68
MGD) with an estimated monthly peak flow of approximately 1.56 MGD. A "user" in this context
may comprise more than one address and/or water meter if the user has multiple addresses. This total
estimated potential demand is less than the estimate provided in the 1992 Master Plan for the City of
Palo Alto.
Several locations operated by the City of Palo Alto are currently being supplied recycled water
through the existing recycled water pipeline from the RWQCP. Table 2-1 shows the existing recycled
water usage for these locations as well as their existing potable water use. Both Greet Park and Palo
Alto Municipal Golf Course are limited in their use of recycled water due to higher total dissolved
solids (TDS) content in the current recycled water compared to the potable water source. As better
technology becomes available causing TDS in the .recycled water source to decrease, then these
locations could use a larger percentage of recycled water for irrigation compared to potable water.
The Palo Alto Municipal Golf Course currently blends its recycled water with potable water to
decrease TDS levels. If TDS levels decrease in recycled water, their recycled water use could
potentially increase significantly.
B. Stanford Research Park
The Stanford Research Park is a 700 acre business park located near Stanford University. The
potential uses for recycled water in this area are landscape irrigation and industrial applications. The
data used for this area was derived from City of Palo Alto monthly water records for 2000-2005.
The market analysis identified 61 potential recycled water users for the Stanford Research Park, with
20 customers having greater than 10 AFY estimated average annual usage and 5 customers having
greater than 25 AFY. Customers may have more than one potential location and address. The
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average annual demand for Stanford Research Park was determined to be 608 AFY (0.54 MGD) with
an estimated monthly peak flow of approximately 1.25 MGD.3
C. Other Large Customers
Other customers with substantial potential recycled water usage include Palo Alto Hills Golf and
Country Club (130 AFY estimated average annual usage), Stanford Hospital and Clinics (107 AFY
estimated average annual usage), VA Palo Alto Health Center (42 AFY estimated average annual
usage), and Caltrans (12 AFY estimated average annual usage.)4
2.3.2 Geographic Analysis
Figure 2-1 shows the locations of potential recycled water users in the City of Palo Alto. Water usage is
grouped by address; multiple meters with the same location are summed as a single point.
3 It.should be noted that several customers in this area are currently using recycled water (i.e. treated contaminated
groundwater generated on-site) for almost all their irrigation loads currently (and have been for quite some time).4 Large water users not included in this Study include Stanford University (500 AFY estimated average annual water
usage) and Alta Mesa Memorial Park (100 AFY estimated average annual water usage). Per a meeting between City
staff, RMC and a representative from Stanford University, it was determined that Stanford University was less
viable as a priority focus area. Stanford University seemed extremely sensitive to water quality, and had other non-
potable sources of water to offset potable use (i.e. Lake Lagunita and cooling tower blowdown). Stanford was also
more interested in receaving recycled water from a satellite plant. Alta Mesa Memorial Park is a cemetery that
currently uses well water for irrigation. It is unlikely that Alta Mesa Memorial Park would switch from well water
to another source of water for irrigation.
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City of Palo Alto - Recycled Water Market Survey Report
Figure 2.1: Potential Recycled Water Users
Chapter 2 Market Analysis
FINAL
June 2006 2-8
City of Palo Alto - Recycled Water Market Survey Report
The market assessment described above shows that there are five main geographic
concentrations/potential focus areas, shown in Figure 2-2.
Figure 2-2: Recycled Water Customer ConcentrationslPotential Focus Areas
Chapter 2 Market Analysis
FINAL
customer
There are five main areas of concentration of users:
Area 1 (Stanford Research Park Area) - The largest concentration of users is located near Page
Mill Road south of E1 Camino Real in and around the Stanford Research Park. This area has
approximately 720 AFY of average annual demand mainly for landscape irrigation.
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Area 2 (East Meadow Drive Area) - Another concentration of users include the East Meadow
Drive Area, which has approximately 121 AFY of average demand for customers including the
Cubberley Community Center and Mitchell Park.
Area 3 (Embarcadero Road Area) - The last concentration of users includes approximately 115
AFY of average demand mainly for median irrigation along Embarcadero Road, Rinconada Park
and the Lucie Stem Community Center Area.
Area 4 (Stanford Hospital Area) - The second concentration of users occurs at Stanford
University/Stanford Hospital, with approximately 107 AFY of average demand. These demands
include recycled water for irrigation and cooling towers.
¯Area 5 (University Avenue Area) - The fourth concentration of users occurs along University
Avenue in Palo Alto. Demands in this area include approximately 35 AFY of average demand
for irrigation demands at City of Palo Alto parks and City Hall.
The customer concentrations were compared based on the following features:
¯Water Quality Needs and Acceptance of Recycled Water
¯Pumping/Storage Requirements
¯Potential for Expansion to Other Areas
The results of the comparison are presented in the sections below.
2.3.3 Water Quality Needs and Acceptance of Recycled Water
The water quality concerns are the same for all of the customer concentrations. Most potential customers
interviewed as part of the market assessment were concerned with the salt content, but are still willing to
use recycled water for irrigation if recycled water was available at a lower cost than potable water.
2.3.4 Pu~npinglStorage Requirements
Pumping for a recycled water project to any of the customer concentrations could be accomplished by
adding pumping capacity at the RWQCP or by adding a booster pump station along a preferred project
alignment. Additional storage for a recycled water project may be available at the RWQCP or on site.
Specific pumping/storage requirements for the preferred project will be further examined in Section 3.1.3
by use of a hydraulic model.
2.3.5 Potential for Expansion to Other Areas
A pipeline constructed to the University Avenue area mi~y serve to begin regionalization of a recycled
water system throughout the Peninsula and South San Francisco Bay region. Recycled water from the
RWQCP could serve demands located throughout Menlo Park and eventually connect to the South
Bayside System in Redwood City.
A pipeline constructed to the Stanford Research Park area may serve to begin regionalization of a
recycled water system by eventual expansion to the Los Altos and Los Altos Hills areas. Alternatively, a
pipeline constructed to the East Meadow area could be expanded to serve future systems in the City of
Mountain View, with a continuous recycled water network through Mountain View, Sunnyvale and the
South Bay Water Recycling program in Santa Clara, San Jose and Milpitas.
A pipeline constructed to serve the Embarcadero Road area could be expanded to later serve Stanford
University.
Conceptual level pipelines were drawn to depict possible routes to serve the five customer concentrations
and for future expansion into neighboring communities. Possible projects to all potential focus areas as
well as future expansion points are shown in Figure 2-3.
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City of Palo Alto - Recycled Water Market Survey Report
Figure 2-3: Other Future Recycled Water Projects
Chapter 2 Market Analysis
FINAL
East,Palo Alto
University Ave
~tanfoi’d
Stanford Hos
Stanford Research Park
Palo Alto
E. Meadow Dr "
~m
¯
Mountain Viev,
Los Altos
2.4 Project Focus Area
The comparison of customer concentrations determined that the only discernable criteria is the actual
demand since all customer concentrations have similar water quality needs, pumping/storage
requirements and potential for expansion to other areas. The Stanford Research Park and other nearby
customers make up the largest concentration of large users for a feasible recycled water project and thus
are hereby defined as the priority focus area for a future recycled water project, The project focus area is
located in southern Palo Alto along Page Mill Road south of E1 Camino Real as shown in Figure 2-4. All
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customers included in the focus area are listed in Appendix C. The top five largest customers within the
focus area are labeled in Figure 2-4.
The selected project focus area includes approximately 720 AF armually of average demand, mainly for
irrigational purposes. Because the main demand is for irrigation, the timing of use and seasonal variation
is expected to be similar for the majority of customers within the focus area, with heavier uses during the
morning/evening hours of summer when irrigation is most prevalent.
Fi< ure 2-4:Focus Area
June 2006 2-12
Chapter 3 Conceptual Design
Based on results of the market assessment discussed in Chapter 2, conceptual pipeline alignments to serve
the focus area users were developed.
3.1 Basis for Conceptual Design
The following sections discuss how each feature affects the conceptual pipeline alignments development.
3.1.1 Focus Area Pipeline Alternatives
The focus area proposed alignment was developed using the following criteria:
¯Minimize pipe length from the RWQCP to the focus area
¯Maximize demand en route to focus area
¯Maximize the use of existing punic roadway right-of-way
o Minimize traffic interruption during construction
the aforementioned criteria, two alternate pipeline alignments were developed to connect the
Alternatives are depicted in
Using
existing recycled water pipeline to the Stanford Research Park focus area.
Figure 3-1.
Figure 3-1: Alignment Alternatives A and B
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Alternative A considered a pipeline alignment connecting to the existing system at Greer Park,
continuing southwest along Colorado Avenue, and reaching the focus area near the Page Mill
Road/Oregon Expressway and Alma Street. The pipeline alignment for this alternative travels
approximately 9,100 feet from Greer Park to the focus area connection and provides for an average use of
28 AFY of recycled water en route to the Stanford Research Park focus area. Total project demand is
estimated at 748 AFY.
Alternative B considered a pipeline alignment connecting to the existing system at East Bayshore Road
northwest of San Antonio Road, continuing southwest along East Meadow Drive, crossing the Alma/Joint
Powers Board right-of-ways, and continuing northwest along Park Boulevard to reach the focus area. A
lateral would be extended southeast along Middlefield Road to serve the Cubberley Community Center,
Mitchell Park, and the Mitchell Park Library. The pipeline alignment for this altemative travels
approximately 15,000 feet and provides for an average use of 120 AFY of recycled water en route to the
Stanford Research Park focus area. Total project demand is estimated at 840 AFY. Approximately, 242
AFY of this calculated demand was calculated from dedicated irrigation only meters (W7 meters). Also
approximately 272 AFY of the total calculated demand is assumed irrigation demand calculated as a
percentage of combined domestic meters (W4 meters) and from estimates based on site acreages. The
remaining 326 AFY is considered non-irrigation demand (process and cooling towers).
For both Alternative A and Alternative B, when the proposed alignments reach the focus area, the
proposed alignment is the same - traveling southwest on Page Mill Road to serve all customers within the
focus area. This portion of the pipeline alignment is approximately 18,000 feet and provides for an
average use of 720 AFY of recycled water.
The comparison criteria between Alternative A and Alternative B are shown in Table 3-1.
Table 3-1: Alternative A and B Comparison
Total Pipeline Length to Focus Area
Total Average Demand Served Prior to
Reaching Focus Area
Traffic Concerns
Utility Concerns
Total Recycled Water Served j 748 AFY i 840 AFY
9,100 feet t 15,000 feet
I 0.003I AFY/LF I 0.0080 AFY/LF
Non-Differentiable
Large Trunk Sewers, Box I Typical Utilities
Culvert Storm Drain,
Electrical Substation,
Typical Utilities
Constructability Mainly Open-Trench in Mainly Open-Trench in
’ Public Roadway Right-of-Public Roadway Right-of-
Ways, Railroad Crossing Ways, Railroad Crossing
Total Cost of Alternative Project i $14.1 million $16.9 million
5 Along the railroad tracks that are parallel to Alma, the right of way is owned by the Joint Powers Board, an agency
which is comprised of three counties (San Mateo, Santa Clara and San Francisco). The lead agency is the San
Mateo Transportation Agency. Additionally, the City of Palo Alto owns a 10-foot right of way parallel to the Joint
Powers Board right of way that could potentially be utilized pending further utility investigation.
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Alternative B was selected as the alignment for the preferred focus area project (project) because it has
the potential to serve a greater demand of recycled water and avoids some of the utility issues associated
with Alternative A.
3.1.2 Preferred Project Description
Figure 3-2 shows the focus area project alignment and potential recycled water customers along the
alignment.
Figure 3-2: Preferred Project Alignment
The preferred project alignment connects to the existing recycled water pipeline stub-out at East Bayshore
Road near San Antonio Road. An 18-inch diameter pipeline would be extended from the existing
pipeline underneath US-101 southwest along East Meadow Drive to Park Boulevard, crossing the Alma
Street/Joint Powers Board right-of-ways. The pipeline would then continue northwest along Park
Boulevard to Page Mill Road. This section of the pipeline crosses Matadero Creek and Barron Creek. At
these crossings, trenchless construction techniques would be used. A 16-inch diameter pipeline would
extend from the 18-inch pipeline at Park Boulevard southwest along Page Mill Road to Hanover Street.
A booster pump would be installed within this section of pipeline to provide the necessary head to serve
the Stanford Research Park focus area.6 At Hanover Street, a 12-inch diameter pipeline lateral would
continue along Page Mill Road to Foothill Expressway. A 16-inch diameter pipeline would extend from
6 AI1 easement from Stanford may be required to install a booster pump at this location.
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Page Mill Road along Hanover Street and Hillview Avenue to Arastradero Road, where a 12-inch
diameter pipeline would continue to the end of the alignment at the Foothill Expressway.
3.1.3 Preferred Project Hydraulics
Hydraulics for the preferred project was modeled using H2OMap7, a software package developed by
MWHSoft, Inc.
H2OMap includes integrated Geographic Information System (GIS) capabilities to allow the
incorporation of geospatial planning data into a hydraulic model. A GIS shapefile of potential recycled
water customers was imported into an existing model that was used to model demands associated with the
Palo Alto - Mountain View/Moffett Area Reclaimed Water Pipeline Project. This project is currently in
the end of the design phase and construction is expected to start by September 2006. The H2OMap
model was used to help def’me the main recycled water pipeline sizing and alignment for this proposed
project, taking into consideration the existing projects and demands. Junctions/nodes were inserted into
the model at appropriate locations along the pipeline alignment to represent anticipated demands.
Demands determined in the market assessment (Chapter 2) were used in the model. Peak demands were
obtained using peaking factors to reflect the maximum month, average day, and peak hour flow. A
description, of the process to obtain peak flows can be found in Chapter 2. A table of all the customers
with their average and peak demands can be found in Appendix B.
Two scenarios were run:
Scenario 1 modeled the system with peak demands for the preferred project as well as the existing
customers in the City of Pal0 Alto and Mountain View. Scenario 1 assumed that additional
pumps at the RWQCP would supply water at the necessary head to serve the entire preferred
project using the hydraulic criteria listed in Table 3-2. This scenario determined that an extra
460 hp would ’be required at the RWQCP assuming an 80% pump efficiency rate. Detailed results
from the model output can be found in Appendix D.
Table 3-2: Hydraulic Design Criteria
Maximum Pressure .......
t 180 psi
Minimum Pipe Size , 6 inches
Maximum Head Loss ! 5 feet per 100 feet
Velocity ! 2-8 feet per second
Scenario 2 modeled the system with peak demands for the preferred project as well as the existing
customers in the City of Palo Alto and Mountain View, but assumed that a booster pump would
be placed along the preferred alignment closer to the focus area, instead of providing additional
pumps at the RWQCP. The model calculated that a 150 hp booster pump station would be
necessary along the preferred project alignment, somewhere near the intersection of Page Mill
Road and E1 Camiiao Real to maintain the hydraulic criteria listed in Table 3-2. The Mayfield
7 Model information found at: http://www.mwhsofi.comJpage/p_product/water/water_overview.htm.
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Site soccer field location would be a possible location for the pump.8 The model also calculated
that smaller diameter pipes would be required for this scenario. Detailed results from the model
output can be found in Appendix D.
Scenario 2 was chosen as the more feasible preferred project because less horsepower and smaller
diameter pipes would be required. However, depending on costs9, this.scenario may be revisited should
the City choose to move forward with the preferred project. It is important to note that further hydraulic
analysis of this alternative may be necessary based on the existing pipeline design of the Mountain
View/Moffett Area Reclaimed Water Pipeline. The capacity of the proposed 24-inch diameter Mountain
View/Moffett Area pipeline from Matadero Creek to the intersection of East Bayshore Road and San
Antonio Road may not be enough to handle the peak demands of this proposed alternative when all users
in Mountain View and Palo Alto are online. Further hydraulic analysis and evaluation is recommended
should the City decide to move forward with this project.
3.1.4 Preferred Project Cost Estimate
Capital costs for the project were developed and benchmarked to the Engineering News Record (ENR)
San Francisco construction cost index (CCI) for December 2005 of 8462.
A variety of different construction methods could be used for areas where trenchless crossings are needed.
Hanging pipes on existing bridges was also considered as a potential construction method for traversing
creek crossings. For all cases where trenchless construction would be needed, microtunneling was
assumed to be used as a conservative cost estimate. Microtunneling includes fixed costs associated with
pit construction that vary greatly depending on the depth required and soil conditions. For the purpose of
this study, an average unit raw construction cost was assumed as presented in Table 3-3.
Additional investigation regarding the feasibility of locating a pump at or near the Mayfield Site soccer field will
be required.
Costs for acquisition of land for the booster pump station were not considered.
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Table 3-3: Assumed Unit Raw Construction Costs
Open Trench Installation1
18" Ductile Iron Pipe $190 S/linear foot
16" PVC Pipe $170 - S/linear foot
12" PVC Pipe ~ $150 , S/linear foot
Trenchless Installation2
Average Microtunneling Cost " $1,100 S/linear foot
Other Cost Estimate Criteria
Appurtenances 2 ~ % of pipeline cost
Contingency , 30 % of pipeline cost
Project Mobilization 6 i % of pipeline cost
Customer Retrofit Costs3 { $10,000 , S/customer
150 hp Booster Pump Station4 ’ $740,000 Lump sum
Notes:
1 - Open trench pipe installation costs include pipe material, installation, excavation, l~ack~ll, cathodic protection,
traffic control, dewatering, and pavement restoration. These costs are based on 2005 bids.
2 - Trenchless installation costs include jacking and receiving pits, casing, pipe material, grouting, and
microturmeling equipment. These costs are based on 2005 bids.
3 - Customer retrofit costs are based on 2005 bids for similar projects. These retrofit costs are assumed for
irrigation retrofits only. Process water and/or cooling tower water site retrofits will need to be examined on a case-
by-case basis and may be more expensive.
4 - Booster pump station costs include pumps, drives, building, electrical, HVAC, and SCADA. Does not include
land acquisition or right-of-way costs.
June 2006 3-6
City of Palo Alto - Recycled Water Market Survey Report Chapter 3 Conceptual Design
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As shown in Table 3-4 the total estimated capital cost for the preferred project is in December 2005
dollars.
Table 3-4: Estimated Cost of Preferred Project
Adobe Creek Crossing 300 LF $825 $248,000AIma/Caltrain Crossin_g .............................. ....,F $330,000
Barron Creek Crossi__n_g__ ............................! ....
30_0- ....
~ .....
_L_E- ............._.$_83__5- ............
_$__2_..4_8_,_0_.0__0.
Matadero Creek Crossing_ ........................i ......._3.90_ .............L_.~ .......] ........._$_8_2.5 ................
$_.2__4_8_.,p_0_0- .......
Mobilization I LS $591,000 ,$591,000
280 hp booster pump station I LS ~ $740,000 $740,000
Subtotal $I0,400,000
Construction Allowance o ;,
Engineering and Construction !
Right of Way Costs (3%)$400,000
Connection Cost~~’ $1,000,000
Grand Total~,$16,900,000
Notes:
1 - This connection cost is a payment to the City of Mountain View for connecting to the plarmed Mountain
View/Moffett Field Area Reclaimed Water Pipeline.
2 - Costs do not include additional treatment to obtain additional capacity at the RWQCP.
Operation and maintenance (O&M) costs would be approximately $183,000 per year starting the first
year of operation, assuming 1% of the total construction cost per year. Because the O&M costs are
calculated as a percentage of the total cost and do not include a special O&M program nor the any
additional treatment costs at the RWQCP, additional examination in the next phase is recommended.
Annual expenses for the project would also include any debt repayment incurred in the original funding of
the project. These costs are further detailed in Chapter 4.
The average annualized cost of the project is $1,645,000 with an annual cost of $1,959 per potential acre-
foot of recycled water delivered (see Chapter 4 for details).
Customer willingness to join the program and potential incentives are discussed in Chapter 4.
June 2006 3-7
City of Palo Alto - Recycled Water Market Survey Report Chapter 3 Conceptual Design
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3.2 Preferred Project Implementation
Preferred project implementation will involve further planning and design. Assuming that the City moves
forward with a Facility Plan in fall of 2006, the preferred recycled water project could be online in 2010
as shown in the Figure 3-3, Key i~ediate term activities are described beIow,
Figure 3-3: Project Schedule
Task
1. Facility Plan
2. Environmental
iDocumentation (MND)
3. Market Assurances
4. Permitting
5. Design
6. Bidding
7. Construction
Notes:
2006
Q3 [ Q4
Z008ql I o~. I o3 .I 2009
I
1. IS/MND = Initial Study/Mitigated Negative Declaration; Schedule if an MND is deemed sufficient.
3.2.1 Facility Planning
Based on the proposed project schedule in Figure 3-3, a facility plan will be required and will be
completed in early 2007.
3.2.2 Environmental Review
Prior to design and construction of the preferred project, environmental documentation will be required
per the California Environmental Quality Act (CEQA). The environmental review could be completed in
parallel to the facility plan.
3.2.3 Market-Assurances
Several types of market assurances exist that ensure customer usage of recycled water. Possible market
assurances, include letter of intent, mandatory use ordinance, or none if an existing policy is already in
place. For instance, Caltrans currently requires recycled water usage where recycled water is available.
3.2.4 Permitting
Various regulatory permits will be required. Permits wi!l be required from agencies such as Caltrans,
California Department of Fish and Game, Santa Clara Valley Water District, and San Francisco Bay
Regional Water Quality Control Board.
Obtaining these permits will be done concurrently to the project design should the City decide to move
forward with the project.
3.2.5 Public Outreach
Public outreach will aim at presenting the recycled water project to customers and the general public and
obtaining feedback and information on customer and existing local irrigation systems. This could be
achieved by a series of workshops and interviews. Any questions or concerns will need to be promptly
addressed to ensure public support for the project.
June 2006 3-8
Chapter 4 Financing Plan and Revenue Program
This section discusses potential reuse incentives, identifies funding sources, discusses revenue sources
and recycled water pricing policy, and outlines the sensitivity of the recycled water rate to recycled water
delivery for the project.
4.1 Reuse incentives
Incentive programs are typically implemented by agencies to assist and encourage possible users to
connect to the recycled water system. These incentives typically include some level of financial
incentives, and non-monetary incentives, such as level of service provisions during drought conditions.
Mandatory use ordinance is usually used in addition rather than in lieu of other incentives.
Financial Incentives:
a.Lower recycled water rates than potable water rates - Customers will be less resistant to
converting if the overall long-term cost of using recycled water is less than the cost of
potable water. The recycled water rate should take into account any perceived negative
effects of using recycled water. Agencies throughout the State have typically set the
recycled water rate at 20% to 80% of the potable water rate.
b.City to pay for signage and retrofit needs - Paying for required signage and retrofit costs
will decrease the up-front cost taken on by customers allowing the initial conversion to
occur more smoothly. Signage and retrofit needs include tasks such as replacing meter
box lids with purple lids, printing "Recycled Water" on piping uncovered during
construction, and posting "Irrigated with Recycled Water" signs. Signage and retrofit
costs are included in the total project costs as shown in Table 3-4.
c.City to perform required annual cross connection testing.
d.City to hire contractor dedicated to helping customers with retrofit needs.
e.Free permit review - By waving the permit review fee for recycled water users,
conversion costs will be lowered for potential customers.
£ Free training for on-site supervisors.
Non-Monetary Incentives:
a. Reliability incentives - Increased capacity from recycled water use means less
dependence on external potable water sources. The primary non-monetary incentive is
reliability or availability of recycled water when shortages of potable water occur.
b. Positive community image - Converting to a recycled water source carries a positive
economic value by projecting the recycled water customer as a "green" company to the
community. Public education and information program recognizing the benefits of using
recycled water for the community would typically be necessary to enhance the role of this
incentive.
Use Ordinances:
a.Require installation of dual plumbing in all new and remodeled buildings in anticipation
of the future availability of recycled water.
b. Identify a specific "reuse area" within which recycled water must be used for a particular
application (e.g. irrigation).
c. Maintain and provide to potential recycled water users a list of acceptable plant materials
that are tolerant to the recycled water quality.
June 2006 4-1
City of Palo Alto - Recycled Water Market Survey Report Chapter 4 Financing Plan and Revenue Program
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4.2 Funding Sources
The preferred project will essentially be funded by the City of Palo Alto. Some level of grant funding
could be secured through the Proposition 50, Chapter 8 Grant Program for implementation, and the
proposed Water Resources Investment Fund. In addition, a low-interest-rate loan could be secured from
the SWRCB State Revolving Fund Program. Also, planning-level funding may be available through the
Water Recycling Facilities Planning Grant Program. Federal grant money could also be sought through
Title XVI. A summary of potential outside funding sources for the project is provided below.
Proposition 50, Chapter 8 Grant- The Grant Program is administered by the SWRCB and the
Department of Water Resources (DWR). Funding is available for Feasibility Studies and design
and construction projects for up to 90 percent of the project costs. An Integrated Regional Water
Management Plan (IRWMP) must have been prepared for the project in order to qualify for a
planning and!or implementation grant. As an element of The Palo Alto Regional Water
Recycling Project included in the IRWMP being prepared for the second funding cycle, the
project will be eligible for Chapter 8 funding. Approximately $220 million is anticipated to be
available for the next funding cycle, in 2007 or 2008.
Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal
Protection Bond Act of 2006 - This initiative will provide for protecting the water quality of
the Sacramento-San Joaquin Delta, assist each region of the state in improving local water supply
reliability and water quality while resolving water-related conflicts and reducing reliance on
imported water, The measure is going to be on the November 2006 ballot. If it passes the Safe
Drinking Water and Water Quality Projects portion of the bond has a proposed fund of $1.525
billion, which the Integrated Regional Water Management program has one billion and the Delta
Water Quality program has $130 million.
State Revolving Fund (SRF) - The SRF Loan Program is administered by the SWRCB. The
Loan Program provides low-interest loan funding for a wide array of design and construction
projects, including construction of publicly-owned wastewater treatment facilities, local sewers,
sewer interceptors, and water reclamation facilities. The SRF provides 20-year loan with an
interest rate set at half of the State Bond General Obligation Rate (typically 2.5% - 3.5%). After
a 20-month freeze period, the SWRCB is now preparing to proceed with a Revenue Bon~
issuance to make funds available for loans again. The State Water Board will begin accepting
new applications and resume processing those applications that were previously under review.
Future funding will be limited, and may only be available to those projects that are qualified to
receive tax-exempt bond funding. In order to qualify for a SRF loan, the sponsor must apply for
placement on Priority List. Subsequently, the sponsor must submit a Facility Plan.
Water Recycling Facilities Planning Grant Program (FPGP) - The Water Recycling FPGP
program is administered by the State Water Resource Control Board (SWRCB). The Water
Recycling FPGP can provide funding of 50 percent of eligible planning costs up to $75,000 to
public agencies to study the feasibility of water recycling and to prepare a facilities plan
documenting the analyses and conclusions of the investigation. A draft Facility Plan, a letter of
intent from the customers and environmental documentation are required in order to be eligible.
The grant will result in a Final Facility Report that must be submitted within three years of the
grant commitment.
Title XVI -In 1992, Congress authorized the US Bureau of Reclamation (USBR) to participate
in local recycled water projects under "The Reclamation Wastewater and Groundwater Studies
and Facilities Act," known as Title XVI. Title XVI funds are available for feasibility studies
and/or design and construction costs. The Federal contribution is capped at 50 percent of the
total study cost, and 25 percent of the total project cost (including construction), or $20 million
June 2006 4-2
City of Palo Alto - Recycled Water Market Survey Report Chapter 4 Financing Plan and Revenue Program
FINAL
per project. The project sponsor is responsible for 75 percent of total design and construction
costs, as well as all of operation and maintenance (O&M) costs of the project.
Federal funds for feasibility studies must be included in the President’s budget request to
Congress. The federal appropriation process typically requires that the project sponsor notifies
the USBR two years prior to the year the funds are sought. In order to be eligible, the project
must meet legal and institutional requirements, including NEPA compliance. A cost sharing
agreement can be approved by the Secretary only after all feasibility and environmental
requirements are met.
Santa Clara Valley Water District (SCVWD) and Bay Area Water Supply and
Conservation Agencies (BAWSCA) Water Recycling Support - These agencies recognize that
it is in their best interests to encourage water recycling, and as such, actively support the
development of water recycling activities in the region. The SCVWD has already entered into
recycling parmerships with three of the four recycled water producers in Santa Clara County and
is pursuing greater involvement with the RWQCP to contribute to meeting SCVWD’s recycled
water use target of 10 percent of total water use by 2020,
San Francisco Public Utility Commission (SFPUC) Water System Improvement Program
(WSIP) - The WSIP includes a series of projects that have been identified by the SFPUC to
provide regional water supply benefit. Other projects that could provide regional water supply
benefits, such as development of recycled water supplies, may potentially be funded through the
WSIP program.
4.3 Project Costs and Revenue Sources
This section presents the project financing costs, the assumptions and results of the financial analysis,
including annual revenues and expenditures projections, and a comparison of the cost of recycled water
with potable water.
4.3.1 Project Total Costs and Financing Costs
The project total cost is estimated at $16.9 million (see Section 3). Because no outside funding has been
secured at this time, it is assumed that design and construction costs could be supported by the passing of
a bond measure in 2008. After a 10 percent debt service reserve and a bond cost of five percent are
accounted for, the total project financing cost is estimated at approximately $19.5M. A summary of the
project total and financing costs is provided in Table 4-1, below.
Table 4-1: Project Total and Financing Costs
..... D- _ T’. t]~,.
Construction Costs
_E n g_i_n_e er i n g_.~_ _& C___o ns_t_r u_c t io_n__M .a_n_a.~ e_m_ ent_ _~i.5_°_/? )
_.R_i.g._h_ t o fWa_y_C_ _o_s t_s_( 3_~%J __
.C..on; .n_e_ .c t_i 9_n_ _c_.9_s_t_ ...................................................................................$_I_,_o__o_.~.:o_0_0
.................................................... T_o_ .t~_!. P_r_oje_.c.t. _o_st_
0
.o. d___C_o_s_t__(_5 O_/o) ...........................................................................
....................................... P.. r_°j_e__ _Ct__.F_i_n_a__n. c__ i..n g_ .Co...st_
Bond Annual Debt Service Cost 20 year retur,n at 4% interest rate
Notes:
a,All costs are rounded to the nearest $100,000,
b. Engineering costs include planning and design costs
June 2006 4-3
City of Palo Alto - Recycled Water Market Survey Report Chapter 4 Financing Plan and Revenue Program
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4.3.2 Financial Analysis
The purpose of this financial analysis is to provide the City of Palo Alto with a preliminary understanding
of the costs of developing and maintaining the project.
The following assumptions were made in conducting the financial analysis:
It is assumed that 50% of the planning costs will be covered by a planning grant. No construction
grant contribution is assumed since no construction grant is anticipated to be secured in the short-
term.
Planning costs will be incurred in 2006. Design costs will be incurred in 2007-2008.
Construction costs will be incurred in 2008-2009.
Design and construction costs will be supported by the passing of a bond measure in 2008. As
mentioned earlier, a debt service reserve of 10 percent was assumed in addition to a bond cost of
5 percent.
Annual expenses are assumed to result from annual operations and maintenance (O&M) costs and
the debt service. O&M costs are estimated to be 1 percent of total project costs and are adjusted
to increase by an inflation rate of 4 percent annually. The debt service assumes a 20-year
repayment period at a 4 percent interest rate.
Project costs (including O&M costs and debt service) will entirely be covered by recycled water
sales. An average recycled water yield of 840 acre-feet per year (AFY) is assumed for the
project. Using recycled water sales as the only source of revenue allows for a fair comparison of
the "cost of water" and means that the project is not dependent on other revenues of the City of
Palo Alto.
Table 4-2 shows the annual costs and revenues projections for the first five years of the project
implementation and the required recycled water rates needed for the project to break even each year. The
first 20 years of the cash-flow projection, shown in Appendix E, show contributions to the debt service.
Table 4-2: Annual Projections of Project Costs and Revenues
RW Demand (_A~_F)_ ......r 840
Debt Service $1,434,900
Annual O&M Costs zl $183,400
Total Costs It $1,618,300
Cost Per AF t $1,927
840 840 ! 840 ~ 840
$1,434,900 [ $1,434,900 i $1,434,900 , $1,434,900
$190,700 ~ $198,300 [ ..... ~;-~-~-~~’--~[" $214,400
~25~-~-~ $1,633,200 i $1,641,100
$1,935 i $1,944 $1,954 ~ $1,963
Cost Per hcf $4.42 $4.44 $4.46 ,$4.49 $4.51
Notes:
a,Assumes a constructiort start date of July 2008,
c.Assumes recycled water delivery starts in January 2010.
As shown in Table 4-2, the cost of recycled water increases from $1,927/AF to $1,963/AF between 2010
and 2014. The yearly increase reflects inflation-adjusted O&M costs. The average annual recycled water
unit cost of $1,959/AF accounts for inflation over the 20-year bond service period. In the 21st year, no
more contributions to the debt service are required, greatly reducing the required revenues to cover the
incurred costs of the project. At that time, the calculated cost of recycled water is $478/AF which
includes the O&M costs plus contributions into an equipment replacement fund. A 20-year projection of
the project cash flow can be found in Appendix E.
June 2006 4-4
City of Palo Alto - Recycled Water Market Survey Report Chapter 4 Financing Plan and Revenue Program
FINAL
4.3.3 Potable Water and Recycled Water Cost Comparison
The City of Palo Alto current wholesale potable water cost is $444/AF. As described earlier, in order to
break e’cen, the estimated recycled water rate should be approximately $1,959/AF. It is important to note
that potable rates will increase over time. In particular, potable water rates will have to be adjusted as
SFPUC’s capital program begins to be implemented. The potable water costs will reach $1,600/AF in FY
2016. These costs have the potential to increase due to the number of capital program projects that
SFPUC will be implementing in the future.
Comparing the annualized cost of current recycled water projects in the area, shown in Figure 4-1, shows
that the City ofPalo Alto’s recycled water project is within the median of these projects which costs range
from $300/AF to $6,300/AF.
Figure 4-1 : Recycled Water Projects Cost Comparison
7,000
6,000
5,000
4,000
3,000
2,000
1,000 -
0
San Ramon.Valley Recycled Water Program
South Bay Advanced Recycled Water I
Treatment Facility I
Mr, View Moffet Area Reclaimed Water IPipeline I
Recycled Water Program for North Marin
WD and Novato Sanitary District
Pittsburg Recycled Water Implementation
City of Palo Alto recycled Ware r Project
Antioch Recycled Water Implementation
Redwood City Recycled Water
Paciflca Recycled Water
4.4 Project Cost and Demand Sensitivity Analysis
This section presents the results of the sensitivity analysis to recycled water unit project cost and demand..
4.4.1 Project Cost Sensitivity
The recycled water unit cost is sensitive to the project capital cost, for a specific demand. For example, a
project cost of $15.2 (10 percent cost decrease) results in a recycled water unit cost of $1,757/AF and a
project cost of $18.6 (10 percent cost increase) results in a recycled water unit cost of $2,150/AF. Figure
4-2 shows the relationship between project cost and recycled water unit costs.
4.4.2 Demand Sensitivity
Similarly to cost sensitivity, demand sensitivity can be determined for a given recycled water project cost.
The "break-even" recycled water unit cost of $1,959/AF is based on an estimated approximate recycled
water demand of 840 AFY. Demand sensitivity was evaluated for demands ranging f{om 756 AFY (90
percent of anticipated demand) to 924 AFY (110 percent of anticipated demand). Recycled water
demands of 756 AFY and 924 AFY resulted in recycled water unit cost Of $2,177/AF and $1,781/AF,
respectively, assuming a project cost of $16.9 million. Figure 4-3 shows the impact of demand on
recycled water unit costs for a given project cost.
June 2006 4-5
City of Palo Alto - Recycled Water Market Survey Report Chapter 4 Financing Plan and Revenue Program
FINAL
Figure ~4-2: Recycled Water Unit Cost Sensitivity to Project Costs
3000
2500
2000
1500
1000
500
0
10 11 12 13 14 15 16 17 18 19 20 21 22 23
Project Cost ($millions)
Overall, as shown in figure 4-3, for a given project cost, the break-even unit price of recycled water
decreases when the recycled water demand increases. Therefore, it is critical to have as many customers
as possible to keep the cost of recycled water competitive and enticing.
3500
3000
2500
2000
1500
1000
500
Figure 4-3: Recycled Water Unit Cost Sensitivity to Recycled Water Demand
Demand (AF)
June 2006 4-6
References
Brown and Caldwell~ "Water Reclamation Master Plan for the Regional Water Quality Control Plant."
April 1992.
CH2M Hill, Inc. "Final Environmental Impact Report - Palo Alto Regional Water Quality Control Plant
Wastewater Reclamation Program." April 1995.
Local Government Commission. "The Ahwahnee Water Principles."
w~vw.l,~c.or~/ahwahnee/h2o~rinciples.html. Accessed October 2005.
RMC. "FinaI Report - Mountain View/Moffett Field Area Water Reuse Project, Regional Recycled
Water Facilities Planning Study." State Water Resources Control Board Water Recycling Project No.
3212-010. Prepared for Palo Alto Regional Water Quality Control Plant. March 2004.
June2006 4-1
ATTACHMENT 4
Draft Utilities Advisory Commission Meeting - Minutes Excerpts October 4, 2006
Ratchye:l have a brief presentation that doesn’t provide a lot of background. I think this group already knows the background of
this project. One person I want to introduce is Phil Bobel, the Environmental Compliance Manager at the Regional Water.
Quality Control Plant, which is certainly aware of and very supportive of this project. I will go over briefly the objectives of this
survey, the results and my recommendation for the next steps. The survey was done because we hadn’t looked at recycles
water since 1992. We wanted to reaffirm the potential for recycled water use within the boundaries of Palo Alto and to update
the 1992 cost estimate for a pipeline to distribute that water and any other facilities that would be needed. We found that the
market for the recycled water is much less than estimated in 1992. The total potential was 1870 acre feet per year, but the
recommended project serves only a part of that - about 840 acre feet a year - with the primary use area the Stanford Research
Park. We also found that these customers are very concerned about the recycled water quality, particularly the salinity levels.
The other study result is that the project’s capital cost is estimated to be about 17 million dollars.
Most of the water is for irrigation and most is at commercial sites. The estimates for this market survey are based on better
information than that available in 1992. For example, there are many dedicated irrigation meters now and examining the
seasonal usage pattern was used to make these estimates. It is lot different from what was done in 1992.
The identified project is a pipe line coming down East Meadow to Alma and then to the Research Park. This connects into the
pipe line that is hopefully going to be built along Bayshore to Mountain View and Moffet Field. The plan also identifies future
areas for expansion at a conceptual level for an overall Master Plan update for the ultimate build-out of the system.
This project costs about $2000 per acre foot and since our current cost for water from San Francisco is about $500 it does not
look that good. Even though San Francisco prices are expected to increase to $1600 an acre foot because of the capital
program that San Francisco PUC is implementing it still doesn’t look that good. Although expensive, this project costs less than
some other projects being planned or developed by other entities. For example, Redwood City’s project costs about $3800 per
acre-foot and they are going forward with that project. San Francisco’s recycled water projects are projected to cost about
$7000 an acre foot. What that tells me is those certainly shouldn’t be done before ours is done. But it does not tell me ours is
cost-effective yet.
My main conclusion is that this does not look cost-effective if you expect the City of Palo Alto Water Utility to foot the entire bill.
In order to go forward other beneficiaries must be identified. There is a good possibility of getting Federal and/or State grant
funds to cover part of the project’s capital cost. Other partners may include the Santa Clara Valley Water District and the San
Francisco PUC. I am recommending that we do take the next step of completing a facilities plan including preliminary design
and completion of the environmental documentation for this project. This study would cost $150,000, of which half, or $75,000,
would be taken care of by a grant from the State Water Resources Control Board. The net cost for Palo Alto is $75,000 to
proceed with this step. In order to be eligible for state grant funds, you must take this step of completing a facilities plan. It
seems well worth that additional expenditure of money and to get further along in the project and to make sure we are in line to
get some of these funds. In addition, the study may develop more information that can be used to make the next decision.
Melton - So the $75,000 state money to do the facilities plan - is that is guaranteed? All you have to do is apply for it?
Ratchye - That does seem to be the case. Daisy Stark, the Plant Engineer, confirms that these grant funds for planning are
available if you submit the required information in the application. The planning grant is not competitive. We do need to work
with Treatment Plant and the partners to address the salinity problems of the recycled water produced there. There is a chance
we would use more recycled water if the salinity level decreased. In fact about 180 acre feet of additional recycled water could
be used at our municipal golf course if the salinity level was reduced down.
Melton: How does the salinity get into the water- we start with fresh water - so how are we increasing the salinity of the water.
Ratchye: You are right. The source water for the service area of the Treatment Plant is very high quality. But when it is used
things are added to the water that are not taken out during the treatment process. Perhaps the primary source of salinity in the
wastewater stream is infiltration into the collection pipelines, particularly the ones that are along the bay where very saline bay
water comes in that contaminates the water. The amount of salinity that is coming in from Palo Alto’s collection system has
decreased as a result of the capital programs that the utilities has done on its collection system, but probably there are
improvements to be made. There are pipelines that come in from East Palo Alto and Mountain View along the bay that have
infiltration. Phil Bobel has more information on the situation.
Bobel: The plant has studied the salinity issues. To get the biggest bang for the buck, infiltration must be controlled in the
pipelines coming in from Mountain View’s North Bayshore area and from East Palo Alto. We are currently working with
Mountain View and I hope that we can report some major improvements there. Mountain View has a huge old landfill and they
are doing a lot of pumping adjacent to that landfill into the sewage treatment system. About 5% of our salt is coming from that
one source alone. I think we can make some strides there. East Palo Alto will be much more difficult because it is a dispersed
collection system and the salinity there is coming from much larger dispersed area and there is a much higher capital cost to
deal with it.
Rosenbaum: I guess I always had the impression since the salinity is well known problem with recycled water that pretty much
most of it is due to the process of treating sewage that is what you get left.
Bobel: It is not always the process of treating it. We don’t add anything at all to the salinity as it goes through the Plant.
Rosenbaum: Given what you start with, regardless of salt intrusion, you are going to come up with a product that contains a
whole bunch of what we consider salt,
Bobel: To put some numbers on it, we are around a 1000 parts per million of salinity. Sewage treatment plants that don’t have
an infiltration problem are more like 600. Our goal should be to come much closer to 600. We used to be at 1200, but are down
to 1000, partly because of Palo Alto’s good projects that have controlled a lot of that infiltration. As a comparison, the Colorado
River water is 700 parts per million. So if you could get to around 600, most people should be satisfied.
Ratchye: Phil believe we have the highest salinity level of the south bay treatment plants, which have lower quality source
water.
Bobel: That’s right. We should have the best water around because we have a highest percentage of Hetch Hetchy Water and
we just need a little more help working with our partners.
Ratchye: Phil can also add some information on the plant’s salinity management Initiative.
Bobel: We are looking for grant funds. One possibility is reverse osmosis, but getting rid of the brine is a very difficult situation
for us. So we are exploring all the options. We are focusing on the source control end first as opposed to the treatment. We
really ought to have as good as water as anybody in the bay area because we have better source water than anybody in the
bay area.
Ratchye: Thank youl My recommendation is to complete a facilities plan as the next step for this project. I would like to
entertain comments or questions on this.
2
Bechtel: I would like to ask some technical questions. What does it take to make recycled water portable and where are we ~n
the state of the art in USA, or in the world to make it potable water so that it could be used in homes and so on as drinking water
and so on.
Ratchye: I think that technology is there but I think it is a tough sell. There are strict regulations that require the water to be
very highly treated and then injected in the ground, after which it can be drawn out some distance later and some time later.
Bobel: In Southern California they are now doing exactly what Jane suggestedl Agencies in the LA basin treated water to a
high level, then infiltrated into the groundwater and then use that groundwater. The newer projects are not allowing percolation
into the groundwater but are actively pumping it into the groundwater fairly close to the extraction wells. So now in the Los
Angeles basin you got the situation where they are pumping into the same ground water basin without too much transit time and
further filtration by the soil. That is occurring in Southern California today, We don’t have a good way to do that even if we want
to because we are not using groundwater sources. Further south in San Jose they are seriously considering using recycled
water for stream augmentation, some of which would end up as groundwater. They are doing it in Southern California. Another
thing that is being done in Southern California is using recycled water in commercial buildings for toilet flushing. This requires a
separate dual plumbing system. Palo Alto may have to consider getting ready for that in the future.
Bechtel: My line of questioning is based on rather than spending 17 million dollars on a new distribution system just for recycled
water could 17 million dollars be spent on making that water potable such like the water goes into the home. I expect it would
be a down payment of some sort. But if you have so few customers and can’t come up with more customers for recycled water
if we can get back into our regular distribution system in some way I would support spending a $150,000 on studying those
possibilities rather than proceeding along the line. I am really skeptical about recycled water being cost-effective for us. A net
of $75,000 is not a lot of money; we spend a lot of money on studies. I would rather look forward to see whether we can use the
water directly for as a replacement for Hetch Hetchy water. You mentioned Southern California and I suspect that if you look
around the world and other very arid areas recycled water is being used. Is there any hope in the horizon for any of that bearing
fruit here for us even if we do not live in the desert?
Bobel: I think it is very hard to predict when the comfort level would be high enough for direct potable use of recycled water
without going through the natural filtration in the ground to disinfect that water. The fear of virus and diseases exists and people
will want a one hundred percent guaranteed insurance that none of those virus are present in the water and that none of that
disease is transmitted from a pipe to pipe system. We are just not there as yet. I cannot predict when we could be there.
Beecham: If I could jump in. The issue is not technical. It’s clear that there is a technology there to make the water as clean as
necessary. The issue is public reception and that the toilet to tap water approach is a killer when you go to the public and say
we want to put your toilet water back into the sink. It is a matter of public reception, not a matter of technology that it cannot be
done. My sense is that unless there is a dire need to do it, a simple campaign will prevent the public from accepting it.
Melton: Following up on George’s thought, if like Southern California if we take a reclaimed water pipe line out to the Research
Park, maybe today irrigation is all that people can foresee but if every new building in the Research Park had a dual plumbing
system built into it and we got the pipe line out there then we are right where Southern California is where we are starting to get
new buildings set up to accept the dual water system.
Ratchye: I think that it is very true. The recommended project does not have any storage so the pipes are sized fairly large to
meet the peak needs for irrigation. In the future, if storage were added, the pipes could deliver two or three times that much
water for future loads in that area. I agree with you that over time we will find the uses for recycled water. It certainly can be
used in the buildings for toilet flushing if we have proper separation between potable and non-potable water. However, it is not
cheap to retrofit existing buildings but future buildings could be addressed. The Council has already adopted the Ahwahnee
Water Principles and one of the implementation principles is to encourage new buildings to be dual plumbed to accept recycled
water for those kinds of non-potable needs. Over time the potential for recycled water will grow.
Melton: Has Palo Alto’s Planning Department has this on their radar? Are they looking at this nol for retrofit but for new
buildings?
Bobel: Ironically ,Jane and I are meeting with the Planning folks next week to start that dialogue on the Ahwahnee principles.
As Jane points out one of those principles is to try to get new buildings ready for the future and I don’t think that there would be
fundamental objections from the planning department.
Keller: I actually called the Planning Department today asking about that very thing because I was aware that there is about
350 homes by the East Meadow Area that are recently approved and all together about 2000 homes. I was wondering what the
trade off is for the cost and new plumbing versus a number of units in one area? Another question is what are the constraints of
the salinity? What issues were, how far down you have to reduce the salinity to be adequate for cooling towers, if there was a
corrosion issue or scaling or what the issues are because then you can approach it from the other side. Cooling towers versus
abatement of the actual water?
Ratchye: Regarding your first question about the new homes being approved that you are talking about. Use in residential
settings is a little more difficult than in a commercial setting. That would be potentially problematic unless it is one big
development that has one common area, which could be a good candidate for recycled water. About using the recycled water
in the cooling towers, the issue would be that you would have lot fewer cycles before you have to throw the water away as you
can get six or eight cycles with Hetch Hetchy water and you may get two or three so you would be using more water in the
cooling tower.
Keller: Okay.
Melton - Any other questions?
Rosenbaum: There seems to be a discrepancy between your slides on the process use where you say look at the market
survey finds process use of 39 acre feet and on page 3.2 in the report, it says 326 acre feet per year.
Ratchye: I reviewed the numbers to determine the breakdown between irrigation and process use and I believe the ones in my
slide are correct. I do not think the numbers in the report are correct. The study shows seasonal use, which was partially
attributed to cooling towers but I don’t believe it is as bigas what is in the study.
Rosenbaum: So it is a trade of between irrigation use and process use.
Marilyn do you want to finish. I do have a few more questions
Keller: I am sorry- I just have one other question. Why can’t fire meters use recycled water?
Ratchye: One type of meter we have is for fire sprinklers in buildings so if there is any flow through that meter they assume that
it would not be recycled water potential use.
Rosenbaum: Let me continue. On page 2 of 4 of the City Manager’s Report. The last sentence of next to the last paragraph
says another one million will be paid if Palo Alto connects to the pipe line to serve recycle water loads in Palo Alto. Maybe you
answered this question for me once. When Mountain View came to the Water Control Plant and said we need some more
money, staff came to us and said we would like to put two million dollars into this Plant and the UAC reacted negatively to that.
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We finally said we put in a million dollars now and a million dollars if we ever connect and I remember Glen Roberts going to
Mountain View and coming back and saying that amount would not be acceptable to Mountain View. But he finally decided to
put a million dollars from the contingency reserve funds of the Water Treatment Plant, now is the understanding here that if we
ever do connect the water utility will essentially repay the Water Treatment Plant that million dollars?
Ratchye: From the perspective of this project the water utility would be paying another one million dollars if and when we
connect to that new pipeline.
Rosenbaum: That was the agreement with Mountain View.
Ratchye: We agreed to pay one million dollars of the capital cost to cover the cost to up-size the pipe to handle future Palo Alto
load and an additional one million dollars at the time we connect.
Rosenbaum: That is not my understanding but it is not reasonable. You raised another issue. It is my understanding that the
bids for the Mountain View were all rejected because it was something like four million dollars over the amount of money that
they had and things are up in the air. I am hopeful we would get our million dollars back. (Jane said we haven’t spent it yet)
Will be getting back the million dollar commitment. What is your understanding of the status of that?
Ratchye: As I understand it, you are right. The bids came in much higher than anticipated and they needed to have this project
done in a certain time in order to get the $3.8 million state construction grant fund that they were promised. They told the state
look of the problem and received an extension to the grant deadline.
Bobel: We got that extension from the state grant funding essentially for a year in which to look for more funding. There is a
possibility of more federal and/or state money. We are going to spend next year examining that and we will be reporting that
through Mountain View since is it their decision.
Rosenbaum: Another question Jane.
On Page three Of four in the last paragraph there is a sentence, there is an implication I did not understand. ’However other
benefits from the project may exist if the project is examined from a broader perspective’ In this sentence I do not understand for
example the marginal cost is new water resources for the region maybe much greater from the cost of water from SFPUC.
What does that mean and how does that relate to us.
Ratchye: Well, if you look at from just a City-of Palo Alto perspective our avoided cost is whatever the average cost from the
San Francisco is. That might be $1600 per acre-foot, what we expect in 10 years (it’s $500 per acre foot now). But where is the
State of California or the Bay Area going to get new water? The cost is probably a lot higher than that. So the question is what
is the proper avoided cost to use when you are looking at this project - should it be the societal perspective? If it were funded
regionally then it is appropriate for the region to look at where is we are going to buy our next amount of water. Santa Clara
Valley Water District has done this. They have pegged it on the cost of building a reservoir to get more seasonal storage and
that is essentially new water produced that can be used. I think it is much higher than $1600. I think it is more like $2500. I
actually would have to double check and see what that calculation is recently. I haven’t seen a number on that in the last couple
years. But I do think that it is appropriate to look at that number. In addition, the State of California is looking at very expensive
projects to try to increase the water available in the State and so those are appropriate benchmarks to use. We can examine
the regional benefit of the project and sell it that way to get regional funding,
Bobel: Just to add to that. That is the selling point that might~work in terms in going back to the State for more money. If the
State is giving money to all kinds of different places, you would think that they would want to give it to the place that they think it
is getting best bang for the buck - the smallest cost per acre foot. To the extent that we are connected into the regional
systems of San Francisco and the Valley Water District, then the State should really be looking to find the places to put the
money that they get the lowest cost per acre foot for the next increment of water. That is why we should have a good argument
and go back to the State and say this Mountain View pipeline project for example has got a better return than some other
projects being done or considering for funding.
Rosenbaum: Thank you for that. I guess my reaction is that those arguments sound pretty forced. I think it is going to be tough
to go to the State and say Gosh we need all this water because it is going to be cheaper so that we can water commercial
landscaping. One response might be in the one that Planning Department is already following for new buildings. They strongly
encourage drought resistance landscaping which makes a lot more sense. I think those are all my questions and I am ready to
make a motion. It is not the motion that staff is recommending. So however you would like to proceed John.
Melton: Are there any other questions or comments?
Balachandran: Commissioner, I would like to make one comment just to highlight a point on one of the slides here which is the
cost of Hetch Hetchy water is estimated at $1600 an acre foot, but only 4% of San Francisco’s capital program has been
completed. With any long term Public Works project the cost tends to go up. So when I look at these cost too, we don’t have
an estimate of how high the ultimate cost could be.
Rosenbaum: If l might reply - you are not suggesting that the $1600 acre feet is associated with the capital cost of 4% of the
project. You are saying that at this time there is some uncertainty what the total cost might be. But based on the current
estimate, the cost of the water will be $1600 and not estimate might change.
Balachandran: That is correct.
Rosenbaum: AS we found out with the Mountain View pipeline the cost estimates for this pipeline might indeed change and I
guess just for argument purposes the timeline for the project like this sort is not that long. If we did find out in future years that
the cost of Hetch Hetchy water was going to be higher than $1600 then this project is suddenly cost - effective why? No
problem in proceeding at that time assuming Mountain View goes ahead with that. We would also know that and who knows we
might even have a handle on how much it is going to cost to reduce the salinity of what the plant is putting up. The salinity
problem has been with us forever and I guess I am at a loss in understanding why if it is really doable at a reasonable cost and
it hadn’t been done before and why this particular project should suddenly be served as the impetus to take a more serious look
at it in reducing the salinity. John what would you like?
Melton: I think Commissioner Beecham has a comment before we take a vote,
Beecham: Formally liaison Beecham here. I do have a couple of questions. One I presume the anticipation of the staff is the
cost of this is rolled into our average water rate paid for by a typical ratepayer is that correct?
Ratchye: If we go forward with this project, there would certainly be policy issues to be addressed in that regard. The Council
could decide to have recycled water cover the entire cost of the recycled water system or decide to discount the cost of recycled
water from potable water rates - this may require potable water users to subsidize recycled water users.
Beecham: So it could be even more then just rolling the cost of the project into the recycled water rates. We could be forced to
discount to some degree to get people to use it.
Ratchye: That would be a policy choice. Another thing that council could do is this is for the Council to declare that recycled
water is the only water available for irrigation in a specific area. For example, if you want to irrigate in this defined target zone
area, this is the water that you will use or no water.
Beecham: Second question. In this case we are pumping water uphill which we don’t have to do through most of the city going
from the day up to somewhat low on the hills is there any significant pumping cost associated with this.
Ratchye: That cost has been estimated in the study, but it is not significant relative to the capital cost.
Beecham: Does this include in the $1600 or $2000 rather?
Ratchye: Yes.
Beecham: In a couple of comments you talked about the potential for much higher cost of additional water supplied through the
Hetch Hetchy system through BAWSCA and Jane is working on this too. We are working on both environmental reviews for the
whole Hetch Hetchy system as well as looking at what additional water supplies there may be for growth that will occur in this
area. For Palo Alto we do not accept our water demand will increase. We think that with conversation that will pretty much
match our population growth and so on and so on. There is no long term increase in Palo Alto Demand but that is not the case
of other cities. BAWSCA agencies are in fact growing and I think even San Francisco may have some growth planned. There
will be some need to find some additional water supply for the Hetch Hetchy system. It will cost more depending on how they
do it. If there is an environmental reason not to take any more water out of the Tuolumne River, you will have to find it
elsewhere. So the potential for the Hetch Hetchy System to need to find.more expensive water is genuine. I don’t know if there
is a way that we can do water trading for example water more or less can bank here and offset someone etse’s growth and they
pay for it that might happen in the future as we do contract negotiations there is a possibility for not necessarily out there yet but
in any case for the Bay area we will be short on water. Compared to other options others are considering for the marginal cost of
water this is cheap. One of the flaws in our system is we are charged by the Hetch Hetchy average cost. They just as we may
hear take their high marginal cost of their supply and potentially charge all of us that as we may do here. Finding the right
economic mechanism to find the right person to pay for this maybe difficult. But in terms of the Bay area to find additional water
this is cheap.
Melton: Any other comments before we go to motion? Dick you said you have a motion, lets put it on the table,
Rosenbaum: This will move us along. I want to say a few things if there is a second to the motion. I would move to
recommend to Council that we discontinue further work on a recycled water project until such project becomes cost effective in
line with guidelines free of the Water Integrated Regional Plant (WIRP)
Melton: Is there a second. Motion fails for the lack of a second. Is there another motion.
Bechtel: Just for clarification so Jane what you are asking us to recommend to the Council is the approval of $150,0000 study
program of which $75,000 are net cost maybe as low as $75,000 is that what you are specifically asking.
Ratchye: Yes.
Bechtel: Then I would move that UAC recommends approval to go forward with the preparation of a Facility Plan Development
and Environmental Documentation for expanding the Recycled Water Distribution System in Palo Alto at a cost not to exceed
$150,000.
Melton: Is here a second?
Keller: I second it.
Melton: There is motion made by Bechtel and seconded by Keller to recommend to Council approval of staff recommendation.
I believe that recycled water that something that we are going to have to do in the future. I don’t know whether it is going to be
on Bay Area life bases or as opposed to just local Palo Alto. It is pretty clear to me that the new water resources are going to be
needed and I think it’s a crying shame that we are dumping Hetch Hetchy water on the vegetation. So I agree with the motion
on the floor that we should move ahead to take what I think is a pretty small incremental step in bringing recycled water on line
for the city.
Rosenbaum: As I indicated I will oppose this motion. I think it is highly unlikely that we would ever consider sticking the water
users of Palo Alto with a cost of a $16 million bond. I just don’t think that is ever going to happen. Recycled water is a
wonderful idea. We used it on our Golf Course, we use it on Greer Park maybe the Mountain View project will occur and they
happen to have a Golf Course and a Shoreline Park and a Shoreline Industrial Park all properly located. At some point even if
you have a wonderful concept like recycled water, you just have to look at the economics and if doesn’t make sense, it doesn’t
make sense and to me this project simply doesn’t make any economic sense.
Bechtel: I believe that Dick in large measure I agree with you. I mentioned earlier that I was skeptical about this as well. I look
at this as keep alive project. I think we talked about BAWSCA, how San Francisco has to consider new sources but also
recycled water and I believe that the investment in the study. Say the study goes on another year keeps the project alive long
enough perhaps we can on a regional basis put more minds to work and find let’s say more financially feasible play of how
actually using. I don’t believe that you opposed the concept of recycled water. Probably from economic point of view it is just a
real reach for it to make sense. But I Would like to keep it alive.
Keller: I think California has always has had a shortage of water in the ~’ecent past and it will only get more serious and I think it
is a good investment in the future. The other benefits that are listed in the report are something to consider as well. If the water
cost keeps escalating as it seems to be I think I would be surprised how soon this might make sense. I also feel that if you can
start encouraging the use of the recycled water before the buildings are built in terms of these large developments that will
become more economically viable and I think we need to do anything we can to conserve water.
Melton: Okay let’s vote. All in favor say ’Aye’
Bechtel ’Aye’, Keller ’Aye’
Melton: All opposed.
Rosenbaum ’No’
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