HomeMy WebLinkAbout2003-12-08 City Council (6)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
11
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:
SUBJECT:
DECEMBER 8, 2003 CMR:547:03
FINANCE COMMITTEE RECOMMENDATION FOR THE
APPROVAL OF THE WATER INTEGRATED RESOURCE PLAN
GUIDELINES AND RESOLUTION OF THE COUNCIL OF THE
CITY OF PALO ALTO APPROVING THE WATER INTEGRATED
RESOURCE PLAN GUIDELINES
RECOMMENDATION
The Finance Committee recommends by a vote of 3 to 1 that Council approve the Water
Integrated Resource Plan (WIRP) Guidelines. The City Attorney has advised that
Council adopt the attached resolution approving the WIRP Guidelines.
COMMITTEE REVIEW AND RECOMMENDATIONS
At its November 18, 2003 meeting, the Finance Committee considered the proposed
WIRP Guidelines. The Committee generally supported the guidelines and Council
Member Beecham moved to approve them as written. Council Member Freeman moved
to amend the motion to add an eighth guideline: "Ensure solutions are environmentally
friendly."
Arguments for the amendment included that the new guideline is needed to explicitly
state and enforce Council’s desire that Utilities focus on the environmental impact of
water supply options available. Arguments against the amendment included that
environmentally sound alternatives were included already in several of the guidelines
(e.g. support for recycled water and conservation and efficiency programs) and no other
objective (e.g. low cost, high reliability, high quality) had a separate guideline. In
addition, the Council-approved Utilities Strategic Plan requires Utilities to consider
environmental impact in developing solutions.
CMR:547:03 Page 1 of 2
The amendment received a 2 to 2 vote and, therefore, did not pass. Then, the Committee
voted on the original motion to approve the proposed WIRP Guidelines as written. This
motion passed by a vote of 3 to 1 (Council Member Freeman voting no).
ATTACHMENTS
A:Resolution
B:CMR:404:03 Water Integrated Resource Plan Guidelines
C:Excerpt of November 18, 2003 Finance Committee minutes
PREPARED BY:
: J .ANE RATCHYE
"-Se/nnior Resource Planner
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
Dire, of Utilities
HARRISON
Assistant City Manager
CMR:547:03 Page 2 of 2
***NOT YET APPRO VED ***
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO APPROVING THE WATER INTEGRATED RESOURCE
PLAN GUIDELINES
WHEREAS, the City of Palo Alto (~City") obtains all of
its water from the Hetch Hetchy system by contract from the City
and County of San Francisco; and
WHEREAS, since 1999, the City has been examining all of
the available and potential future long-term water supply
options during normal, dry and wet years; and
WHEREAS, a recent study of the City’s water distribution
system proposed recommendations for a number of capital projects
to improve the system’s ability to meet water demands during a
temporary shutoff of the water supply from the regional water
system operated by the San Francisco Public Utilities
Commission; and
WHEREAS, a number of options have been examined and
considered, including, but not limited to, the drafting of
groundwater during drought conditions and the level of water
treatment that should be added to the groundwater drafted during
droughts, and whether a connection to the Santa Clara Valley
Water District is advisable; and
WHEREAS, the City wishes to secure its water supply,
giving appropriate attention to the balance between cost,
quality, reliability and environmental impact of various water
supply options;
NOW, THEREFORE, the Council of the City of Palo Alto
does hereby RESOLVE as follows:
SECTION I. The Council hereby approves the Water
Integrated Resource Plan Guidelines, attached hereto and
incorporated herein by reference.
//
//
031203 cl 0072344
***NOT YET APPR O VED ***
SECTION 2. The Council finds that the adoption of this
resolution does not constitute a project under the California
Environmental Quality Act,and therefore no environmental
assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED:
APPROVED AS TO FORM:
Senior Asst. City Attorney
City Manager
Director of
Administrative Services
Director of Utilities
2
031203 cl 0072344
TO:HONORABLE CITY COUNCIL
ATTENTION:FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:NOVEMBER 18, 2003 CMR:404:03
SUBJECT: WATER INTEGRATED RESOURCE PLAN GUIDELINES
RECOMMENDATION
Staff and the Utilities Advisory Commission (UAC) recommend that the City Council
approve the Water Inte~ated Resource Plan (WIRP) Guidelines with the proviso that
when determining the economic feasibility of alternative water sources relative to SFPUC
water, consideration will be given to the possibility that SFPUC water may have a fixed
cost component independent of usage which may be unavoidable when SFPUC water use
is reduced.
DISCUSSION
CPAU has been working on a new WIRP since 1999, beginning with an examination of
all available and potential future long-term water supply options. Currently, CPAU’s
water is supplied entirely by the San Francisco Public Utilities Commission (SFPUC).
In the development of the WIRP, staff has prepared several interim reports and
presentations for the UAC to keep it apprised of the issues, findings, and analysis. In
addition, the WIRP has been coordinated with work by CPAU Engineering to increase
the distribution system reliability.
The primary WIRP analysis was presented to the UAC at its June 4, 2003 meeting
(Attachment B). The conclusion of this report was that CPAU could rely on the SFPUC
to provide 100% of its water supplies in normal years. However, the community must
decide what to do in drought times when SFPUC supplies will not be sufficient to
provide all needs. Options include enduring shortages by cutting back on water usage for
the duration of the drought, using groundwater to supplement droughts, expanding the
recycled water system, expanding the demand-side management (DSM) pro~am,
CMR:404:03 Page 1 of 3
connecting to the treated water pipeline from the Santa Clara Valley Water District, or a
combination of these options.
At the August 6, 2003 UAC meeting, staff presented WIRP Guidelines (Attachment C)
which outline a road map for going forward.
BOARD/COMMISSION REVIEW AND RECOMMENDATIONS
The UAC has reviewed the development of the WIRP since ! 999. At its August 6, 2003
meeting, the UAC approved staff’s recommendation and requested that staff return within
fiscal year 2003-2004 with a recommendation on whether to use groundwater during
droughts. In addition, the UAC added the pro~’iso that when determining the economic
feasibility of alternative water sources relative to SFPUC water, consideration will be
given to the possibility that SFPUC water may have a fixed cost component independent
of usage, which may be unavoidable when SFPUC water use is reduced.
Staff modified Guideline 6 from that presented to the UAC at its August 6, 2003 meeting
to clarify that the City of Palo Alto will not use groundwater in amounts that would result
in land surface subsidence, saltwater intrusion, or migration of contaminated plumes.
ENVIRONMENTAL IMPACT
At this time, the Council is being asked to approve the WIRP Guidelines only, not a
Water Integrated Resource Plan. Approving the WIRP Guidelines does not constitute a
project under the California Environment Quality Act and, therefore, is exempt from the
environment assessment requirement. Environmental impacts of alternatives have been
considered in conceptual planning and will continue to be considered during
environmental review that would occur at the time Council is requested to approve any
elements of a Water Integrated Resource Plan, including the possible use of groundwater
as supplemental supply during droughts.
NEXT STEPS
The Proposed WIRP Guidelines state that staff will seek feedback from the community
and water customers "to determine their preferences as to the appropriate balance
between cost, quality, reliability, and environmental impact." Staff intends to use this
feedback to develop recommendations on how to proceed with water resource acquisition
efforts, specifically around the questions related to the possible use of groundwater in
drought years. Staff will return to the UAC and Council with a recommendation on
whether to use groundwater during droughts before the end of FY 03-04.
ATTACHMENTS
A:Proposed WIRP Guidelines
B:June 4, 2003 report to the UAC: Update on Water Integrated Resource Plan
C:August 6, 2003 report to the UAC: Water Integrated Resource Plan Guidelines
D:Excerpted minutes from the August 6, 2003 UAC meeting
CMR:404:03 Page 2 of 3
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
~re; ~f~t~tie~
Assistant City Manager
CMR:404:03 Page 3 of 3
Attacl-m~ent A
Proposed WIRP Guidelines
Guideline 1 - Preserve and enhance SFPUC supplies: With respect to the City of Palo Alto
Utilities’ (CPAU’s) primary water supply source, the San Francisco Public Utilities Commission
(SFPUC), continue to actively participate in the Bay Area water Supply and Conservation
Agency (BAWSCA) to assist in achieving BAWSCA’s stated goal: "A reliable supply of water,
with high quality, and at a fair price." Objectives in support of that overall goal include:
A. That the regional water system gets rebuilt cost-effectivel’q and that BAWSCA
monitor implementation ofAB 1823 - San Francisco should safeguard the water
system against damage from earthquakes and other foreseeable hazards. BAWSCA
will monitor progess on the system repairs and on completing the requirements of
the legislation that the BAWSCA agencies supported to oblige San Francisco to
repair and rebuild the regional system.
B. That the cost of improvements is fairly allocated - San Francisco should commit to
maintaining cost-based pricing, with the costs of the wholesale water system shared
between the City and its wholesale customers based on their proportionate share.
C. That future water needs can be met - San Francisco must evaluate the ability of the
regional system to meet future supply and capacity requirements and must use the
BAWSCA agencies’ long-term water demand forecasts as the basis for regional water
demand projections.
D. That there are adequate supplies during droughts - San Francisco should arrange
back-up supplies for dry years and should "drought proof" the entire service area, not
just San Francisco.itself. If rationing becomes necessary, San Francisco should use a
system that allocates available water between San Francisco and wholesale customers
in a way that (1) is fair and (2) avoids penalizing long-term conservation efforts
and/or development of alternative supplies, such as recycled water.
E. That communities prepare for potential water outages - San Francisco should
coordinate with the BAWSCA agencies to develop a crisis management plan.
F. That agencies implement cost-effective water conservation activities- San Francisco
should provide agencies enough information so that they can prepare for possible
outages, including the provision of conservation pro~ams for their communities.
BAWSCA can act as coordinator for these pro~ams to improve the cost-
effectiveness of agencies offering such programs.
G. That water received must meet drinkin~ water standards - San Francisco should
continue to protect the purity ofHetch Hetchy water and commit to provide its
wholesale customers with water that meets EPA and California drinking water
standards.
H.That the Master Contract is properly implemented and a new Master Contract is in
place prior to 2009 - San Francisco should commit to maintaining cost-based pricing,
with the costs of the wholesale water system shared between the City and its
wholesale customers based on their proportionate share.
I. That there is ongoing support of efforts to protect health, safety and economic well
being of the water customers and communities - BAWSCA should maintain the
support of the many allies who supported the legislative effort to ensure San
Francisco repairs, rebuilds, and maintains the regional system.
Attachment A
Guideline 2 - Advocate for an interconnection beP, veen SFPUC and the District: Work with
the Santa Clara Valley Water District (District) and the SFPUC to pursue the extension of the
District’s West Pipeline to an intercormection with the SFPUC Bay Division Pipelines 3&4.
Continue to re-evaluate the attractiveness of a connection to an extension of the District’s West
Pipeline.
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.
Guideline 4 Focus water DSM programs to comply with BMPs: Continue implementation
of water efficiency programs with the primary focus to achieve compliance with the Best
Management Practices (BMPs) promoted by the California Urban Water Conservation Coalition.
Guideline 5 - Maintain emergency water conservation measures to be activated in case of
droughts: Review, retain, and priofitize CPAU’s emergency water conservation measures that
woutd be put into place in a drought time emergency.
Guideline 6 - Retain groundwater supply options in case of changed future conditions:
Using groundwater on a continuous basis does not appear to be attractive at this time due to the
availability of adequate, high quality supplies from the SFPUC in normal years. However,
SFPUC supplies are not adequate in drought years and circumstances could change in the future
such that groundwater supplies could become an attractive, cost-effective option. Examples of
changing circumstances could be that the amount of water available to CPAU from the SFPUC
for the !ong-term is reduced. This could occur if regulations or legislation require additional
water to be made available to the Tuolumne River fisheries. In addition, in the future allocations
or entitlements to SFPUC water may be developed. If those allocations are based on the dry-
year yield of the system, allocations to all the users of the system, including CPAU, could be
well below their current and projected future needs. CPAU should retain the option of using
groundwater in amounts that would not result in land surface subsidence, saltwater intrusion, or
migration of contaminated plumes.
Guideline 7 - Survey community to determine its preferences regarding the best water
resource portfolio: Seek feedback from all classes of water customers on the question of
whether to use groundwater during drought to improve drought year supply reliability. At the
same time, seek feedback on the appropriate level of water treatment for groundwater if it were
to be used in droughts. Survey all classes of water customers to determine their preferences as to
the appropriate balance between cost, quality, reliability, and environmental impact.
ATTACHMENT B
3
TO:Utilities Advisory Commission
FROM:Utilities Department
AGENDA DATE:June 4, 2003
SUBJECT:Update on Water Integrated Resource Plan
REQUEST
This update is for the Utilities Advisory Commission’s information only. No action is required.
Staff is requesting comments and feedback from the UAC regarding the items presented.
BACKGROUND
The Water Integrated Resource Plan (WIRP) examining future long-term water supply options is
being conducted in several phases.
During 2000 CPAU staff completed the Preliminary Assessment (Phase 1) of the WIRP. The
Preliminary Assessment provided a high level overview of each of Palo Alto’s water resource
alternatives and helped identify the most promising supply alternatives to be further analyzed in
subsequent phases. The Preliminary Assessment was presented to the UAC as an information item
on August 4, 1999 (draft version) and August 2, 2000 (final version).
The present phase in the WI2LP process (Phase 2) consists of the development and evaluation of
"themed" water supply portfolios so policy makers can determine the proper balance between cost,
quality, reliability, and environmental factors. The last update conveyed to the UAC was at its
September 2002 meeting. At that time, several pieces of missing information were identified that
needed to be further developed in order to complete the W-fR_P. At its May 7, 2003 meeting, the
UAC discussed the conclusions from the Groundwater Supply Feasibility Study.
The WIRP work has been coordinated with work by Utilities Engineering to increase the distribution
system reliability. Under a contract for the City, Carollo Engineers completed a study of the water
distribution system in December 1999 and produced a report "Water Wells, Regional Storage, and
Distribution Systems Study" (1999 Study). The 1999 Study recommended a list of capital projects to
improve the system’s ability to meet water demands during a temporary shutoff of water from the
regional water system operated by the San Francisco Public Utilities Commission (SFPUC). The
recommended improvements related to addressing the City’s emergency water supply deficiency
included rehabilitating the five existing wells and drilling up to three new wellsI.
To examine the issues and costs of using the newly rehabilitated or drilled wells as active sources of
supply, the City again engaged Carollo Engineers to complete another study. The report, finalized in
May 2000, was entitled "Long-term Water Supply Study’’ (2000 Study). The 2000 Study examined
optional supplies as to their ability to meet future supply needs as well as whether any of these
supplies could obviate any of the capital projects recommended in the 1999 Study. The alternatives
examined in the 2000 Study included: 1) using the wells for active supply either on a long-term basis
or during droughts; 2) using groundwater for irrigation; and 3) connecting to the Santa Clara Valley
Water District (SCVWD) treated water pipeline.
The information obtained from the 1999 Study, the 2000 Study, and the Groundwater Supply
Feasibility Study was used to characterize the supply options examined for the WIRP.
DISCUSSION
Current and Available Resources
Water from the SFPUC will continue as Palo Alto’s mai~ supply source. Palo Alto also uses
recycled water produced at the Palo Alto Regional Water Quality Control Plant for irrigation needs at
its municipal golf course and Greer Park and for washing cars at the Municipal Services Center.
Palo Alto also has many water demand-side management (DSM) progams to ensure efficient use of
water.
Additional or supplemental sources that can be developed include connecting to the SCVWD treated
water pipeline; using local groundwater either on a continuous basis or for droughts; expanded use of
recycled water; and expanded water efficiency programs. Key attributes for each of the potential
new resources is summarized in Table 1 below:
1 This conclusion was again reached upon further study and completion of the "Alternative Emergency Water Supply
Options Study completed in September 2001 and the November 2001 Technical Memorandum, "Alternative Emergency
Water Supply Solutions - Supplement to the Water Wells, Regional Storage, and Distribution System Study" which
reconmaended proceeding with an optimal emergency water supply combination that is cost-effective and practical for the
City.
Table 1 - Summary of Current and Available Resources
Project;d cost of In FY 03-04 479 375 375 1450. 976. 1"100. 460"
water($/AF)*InFY12-13 1100 670 670 , 1000, 1150, 770.
Availability of In normal 17,000 500"*0 365 134 1286 1000-
water (AF/year)years 2000
In drought 11,850 500’*1500 365 134 1286 750-
1500years,Water Quality very Depends Depends N/A .............Non-Non-Highononpotablepotablehigh treatment treatment
*Note that the cost shown for the groundwater options is solely the projected wholesale water cost and
does not include the cost of treatment.
**The limit of 500 AFY each year or 1500 AFY once every three years (such as in a drought) was
developed in the Groundwater Supply Feasibility Study by determining the maximum safe groundwater
extraction rate without significantly impacting the environment (e.g. to prevent ground surface
subsidence, travel of polluted groundwater plumes, and saltwater intrusion).
Water Qualiw
Although local groundwater meets all primary (health related) drinking water standards, it does not
meet secondary (aesthetic: taste, color, and odor) standards for iron, manganese and, for some of the
wells, total dissolved solids (TDS). Thus, use of the wells as active supply (i.e. non-emergency)
sources, would require some level of treatment. Staffdeveloped estimates for the cost of treatment
by combining information contained in the 2000 Study and the Groundwater Supply Feasibility
Study.
The 2000 Study contains cost estimates for four well water treatment options:
1. Blend well water with SFPUC water sufficiently to meet secondary standards.
2. Treat for iron and ~anganese only. Water will not meet TDS standard at some wells.
3. Treat for iron and manganese and blend with SFPUC water to increase water quality
significantly.
4. Treat to bring well water up to quality comparable to SFPUC water.
Note that treatment options 2 and 4 involve blending groundwater with SFPUC water. However, the
blend would not be citywide. For all the groundwater treatment options, those located nearer the
wells would get a higher proportion of the treated groundwater than those located at a distance from
the wells or nearer the SFPUC turnouts.
The 2000 Study estimated key water quality parameters for each of the treatment options for each
well site. Table 2 displays the parameters for Hale (an existing well), E1 Camino (proposed new
well), and PAM!z (proposed new well at the old Palo Alto Medical Foundation, or "Roth" site) wells.
Table 2 - Key Water Quality Parameters for Wells and Treatment Option
Hale Well
E1 Camino
and PAMF
Wells
(I) California Department of Health Secondary Drinking
TDS (mg/L)
Iron (mg/L)
Manganese (mg/L)
TDS (m~_~)
Iron (mg/L)
Manganese (m~L)
Standard
(i)
500
0.300
0.050
500
0.300
0.O50
NO
treatment
701
0.269
0.125
617
0.388
0.107
Option
1
308
0.117
0.049
203
0.143
0.043
Option Option
2 3
701 119
<0.30 0.046
<0.05 0.006
617 120
<0.30 0.050
<0.05 0.007
Option
4
120
<0.30
<0.05
120
<0.30
<0.05
Water Standards (aesthetic-related)
Treatment Option 2 treats the groundwater only for Iron and Manganese and, therefore, does not
result in water that meets secondary water quality standard for TDS. One caveat with treatment
Option 3 is that, due to the great proportion of SFPUC water that must be blended with well water,
only about 500-600 AFY per well can be produced in this option. Thus, to get 1500 AFY, up to
three wells would need to be fitted with treatment. The other treatment options would require only
one well to produce !500 AFY. Using the cost estimates developed in the 2000 Study and limiting
production to an average of 500 AFY (either continuous basis or 1500 AFY once in three years),
staff estimated the cost of the water treatment options for Hale Well, a high producing existing well
with adjacent non-parkland space available for treatment facilities. The cost estimates for the
treatment options are shown in Table 3.
Table 3 -Well Treatment Options Used in the WIRP
Portfolio Element .....
Drought-time well usage -
"medium" treatment
Drought-time well usage -
"high’’ treatment
Continuous well Usage -
"high" treatment
Treatment Option
Option 1 - blend with SFPUC water to meet
standards
Option 4 - reverse osmosis
Option 3 - blend with additional sFPuc water (well
usage only 500 AFY) .....
Cost
$2801AF
$877/AF
$293/AF
4
Table 4 shows the key water quality parameters for each water supply source for purposes of the
WIRP analysis.
Table 4 - Key Water Quality Parameters for WIRP
Secondary Drinking Water Standard
SFPUC Water
SCVWD Treated Water Pipeline
Wells - "high" treatment (500 AFY)
Wells - "high" treatment (1500 AFY)
Wells - "medium" treatment
Wells - no treatment
Iron (mg/L)
0.300
0.024
<0.1 O0
0.050
<0.300
0.143
0.269-0.510
Manganese (mg/L)
0.050
0.0025
<0.05
0.007
<0.05
0.043
0.125-0.170
TDS (mg.L)
500
114
-300
120
120
203
617-701
Water Cost
The chart below compares the historical actual wholesale water rates from the SCVWD and the
SFPUC as well as the latest projected rates.
$1,200
$I,000
$800
$600
$400
$200
$0
SFPUC/SCVWD Wholesale Water Rates
~ "-’-’Actual SFPUC Rates
SFPUC January 2003 Projections i .....
’~-’~ Actual SCVWD Pump TaxSCVWD Pump Tax April 2003 Projection
Actual SCVWD Treated Water Rates
SCVWD Treated Water April 2003 Projections i
T
Portfolios Examined
Current and available supply sources were combined into portfolios to determine how each portfolio
ranks as to the following attributes: cost, water quality, availability during droughts, and
environmental impact. The "Do Nothing" portfolio consists of supplies from the SFPUC,
continuation of existing recycled water use, continuation of current and planned water DSM
programs. Other portfolios include those listed in Table 5 below:
Table 5 - WIRP Portfolios
Resources
Use wells during droughts - No
treatment of groundwater
Use wells during droughts -
Medium treatment level
Use wells during droughts - High
treatment level
Use wells on ongoing basis - High
treatment level
Enhanced level of DSM programs
Moderate increase in recycled water
usage
High level of recycled water usage
Connection to SCVWD treated
water line
Portfolios
High Water High Reliability
Quality
X
X
Environ-
mentally
Acceptable
"73
X
X
X X [ X
X X
X
X
Analysis Results
The cost and reliability of each portfolio was calculated over the next 20 years given projected costs
for water from the SFPUC and SCVWD as well as costs for recycled water and DSM programs.
Reliability is measured by the extent to which available resources meet the projected loads. For
example, ira year’s projected load is 14,000 AF, but only 11,000 AF is available, then the shortfal!
is characterized as 3,000 AF or 21% of the projected load. Table 6 shows the results for the
portfolios evaluated.
Table 6 - Portfolio Analysis Results
Themes
High
Water
Quality
Themes
High
Reliability
Themes
Portfolios
Average
Cost
(S/AF)
667
700
673
741
680
681
687
Base - Do nothing (100%
SFPUC)
Use wells during droughts -
high treatment level
Use wells on continuous basis -
high treatment level
Connect to SCVWD treated
water line, use only in droughts
Connect to SCVWD treated
water line, use continuously
Use wells during droughts - no
treatment
Use wells during droughts -
medium treatment level
Use wells during droughts -
medium treatment level and
enhanced DSM programs
Use wells during droughts -
medium treatment level,
enhanced DSM program and
medium recycled water use
Enhanced DSM programs and
medium recycled water use
Enhanced DSM programs and
High recycled water use
Water
Qualit
Y
Best
Reliability
Very
high
Very
high
Very
high
Environ-
High
mental
Impact
Worst
Good
706 2.3% Good Good
Indicator
(% shortfall)
14.3%
4.4%
11.0%
5.2%
5.2%
4.4%
4.4%
1.5%706 Good Good
Low Very
Environ-686 ! 1.4%Best good
mental
Impact 693 5.0%Best Best
Themes
It is difficult to assess environmental impact in a comprehensive way to compare the potable water
supply options. Both the SCVWD and SFPUC systems have capital projects planned to increase
system reliability and some would say that these projects would induce growth. These questions
will be left up to the environmental assessments that will be done for each project. Any growth in
the City of Palo Alto will be compliant with the City’s 1998-2010 Comprehensive Plan and any
requests for new water supplies from either the SFPUC or the SCVWD will be based on meeting the
planned growth only..
The analysis shows that two portfolios can be removed from further consideration. The portfolio
with a high level of DSM and medium level of recycled water costs more than several portfolios that
have greater drought reliability. The portfolio with a connection to the SCVWD treated water line
that is only used in droughts is very costly, but does not provide an additional drought reliability
benefit.
The graph below compares the total costs over 20 years and the deficit in drought years for the
remaining nine portfolios. The least costly alternative is to only use water from the SFPUC.
However, this portfolio results in the greatest shortfall in droughts. For the most part, the cost
increases as the drought deficit decreases. The use of the wells in droughts increases reliability with
the cost for the portfolio dependent upon the treatment level selected.
216
214
212
210
208
206
204
202
200
Present Value of Total Cost and
Surplus (Deficit) in Drought Years
SFPUC GW SCVWD GW 6-GW High DSM GW 7-Same as Same as 7
Only (fulltime)-TW (drought (drought + high RW (drought 6 + high + med RW
high (fulltime)only) - no only) - med only) - high DSM
treatment treat treat treat
-500
-1000
-1500.~
-2000
-2500
-3000
NEXT STEPS
The next step in the analysis is to concisely describe a narrow set of portfolio choices and poll the
UAC, City Council and customers as to their preferences. For example, the questions will try to
determine how much of a cutback in droughts is preferable to decreased water quality or increased
cost. Staff will return to the UAC with recommendations for a long-term water resource strategy.
ATTACHMENTS
A: Summary Description of Water Resource Alternatives
PREPARED BY:Jane Ratchy~, S.i~nior Resource Planner
REVIEWED BY:Girish Balachandran, Asst. Director Resource M~
DEPARTMENT HEAD APPROVAL:
)~ct or of Utilities
(/
9
Attachment A
Summary Description of Water Resource Alternatives
Table of Contents
II.
III.
IV.
Water from the San Francisco Public Utilities Commission (SFPUC) .............................2
A.Cost ........................................................................................................................2
B.Availability and Reliability ....................................................................................3
C.Water Quality .........................................................................................................3
Groundwater Wells ............................................................................................................4
A.Cost ........................................................................................................................4
Water treatment costs .............................................................................................5
SCVWD Pump Tax ................................................................................................7
Waste Stream Disposal ..........................................................................................8
B.Availability and Reliability ....................................................................................8
C.Water Quality .........................................................................................................8
D.Environmental Impacts ........................................’ ..................................................9
Recycled Water ..................................................................................~ .............................10
A.Cost ......................................................................................................................11
B.Availability and Reliability ..................................................................................12
C.Water Quality .......................................................................................................13
D.Environmental Impacts ........................................................................................13
Treated Water From the Santa Clara Valley Water District ............................................13
A.Cost ......................................................................................................................14
B.Availability ..........................................................................................................15
C.Water Quality .......................................................................................................15
D.Environmental Impacts ........................................................................................16
Demand-Side Management ............... ...............................................................................16
A.Cost ......................................................................................................................16
B.Availability and Reliability ..................................................................................17
C.Water Quality .......................................................................................................19
D.Environmental Impacts ........................................................................................19
A-1
Attachment A
Water from the San Francisco Public Utilities Commission (SFPUC)
100% ofPalo Alto’s water supply is presently received from the SFPUC system. The City receives
this water through a long-term contract with the SFPUC that expires on June 30, 2009. On April 25,
2000, the SFPUC formally adopted its Water Supply Master Plan (WSMP), which estimated that the
regional system’s "safe yield" was 239 mgd compare to existing annual average system demands of
approximately 260 mgd. By 2030, a 30% shortage (75 mgd) is projected if no new supplies are
developed. The WSMP includes a strategy to develop a firm, annual system delivery capability of
310 mgd by 2050, the projected needs of San Francisco and the suburban agencies. First, additional
dry year supplies will be acquired from willing sellers. Secondly, new supplies will be developed
from new storage facilities. The facilities recommended in the WSMP are part of the SFPUC’s
capital improvement program.
A. Cost
Historically, SFPUC’s wholesale water rates consist almost entirely of a volumetric, or unit, charge
plus a small fixed meter charge. The chart below shows the wholesale volumetric water rates since
FY 1970-71 as well as projections for the future.
SF’s Wholesale Water Prices
$1,200
$1,ooo
$800
$600
$400
$200
--- Actual Rates
~ SFPUC January 2003 Projections
$0
As shown in the chart, costs are expected to increase dramatically in the coming years, primarily due
to the SFPUC’s implementation of its -$2.9 billion CIP for its regional water system. The BAWUA
agencies are responsible for 2/3 of the cost, or about $2 billion. Palo Alto represents approximately
A-2
Attachment A
9.3% of the BAWUA agencies’ Supply Assurance (see discussion in next section on supply
assurance) and 7.7% of current BAWUA agency usage. Thus, Palo Alto’s share could be $150-180
million. By comparison, Palo Alto’s estimated wholesale water cost for FY 02-03 is approximately
$6 million.
B. Availability and Reliabiii _ty
The amount of water available to the City from the SFPUC system is described in the Master
Contract. When the Master Contract was signed in 1984, each agency’s minimum water allocation,
referred to in Section 7.02 (b) of the master contract as "supply assurance", was set. San Francisco
is obligated to deliver up to 184 million gallons per day (mgd) to the suburban customers. The sum
of the supply assurances for the suburban agencies was 147 mgd in 1984. The remaining supply
assurance was unallocated. Between 1984 and 1993 additional amounts of the supply assurance
were assigned to various BAWUA agencies. In 1993, permanent supply assurances were set for all
of the suburban agencies when they mutually agreed to distribute the 184 mgd among the 29
suburban purchasers. As a result of this distribution the City has a supply assurance amount of 17.07
mgd (19,124 acre-feet/year (AFY)) under the Master Contract. The City’s water usage in 2001-02
was approximately 13.02 mgd (14,800 AFY). However, the supply assurance does not guarantee a
minimum supply of SFPUC water. The Master Contract states that SFPUC will supply the needs of
the BAWUA agencies up to a combined suburban demand of 184 mgd, i_fthe water is available in
the SFPUC system. There is no finn allocation of water associated with the Master Contract.
The Interim Water Shortage Allocation Plan (IWSAP) adopted by the SFPUC and all BAWUA
agencies sets out a mechanism to divide the available water in droughts. The water allocated to the
BAWUA agencies is divided up according to each agency’s fraction of three components: supply
assurance, actual use in FY 99-00, and actual use in the year before the drought. This plan provides
some certainty as to the availability of water in droughts.
Since Palo Alto’s supply assurance is so much higher than its current and forecast use, the cutback it
can expect under the IWSAP is not as high as other agencies. For example, if a 25% system-wide
cut is called for, Palo Alto’s cutback will be only about 21% of current use. Thus, given projected
water use of about 15,000 AFY, the amount of SFPUC water in droughts is about 11,850 AFY.
It must be noted that the IWSAP is "interim" and will expire at the end of the current contract in
2009. It is not known at this time what plan will replace the IWSAP in the subsequent contract. For
the purposes of the WlRP, the IWSAP mechanism is assumed to continue in the future.
C. Water Quality
The water quality from the SFPUC is considered excellent since the majority of the water is taken
directly from mountain reservoirs. The Hetch Hetchy watershed is protected by virtue of limitations
on the type of use and degree of access. The water quality parameters for the SFPUC supply are
listed in the following section, Groundwater Wells, and include comparisons to the water quality
from local groundwater and the treated water from the Santa Clara Valley Water District.
D.Environmental Impacts
Although the majority of the SFPUC’s CIP projects are to increase reliability of the regional system,
some projects will enable more water to be delivered in times of drought and will add flexibility to
A-3
Attachment A
the system which could enable it to meet the long-term needs of the service area. This is likely to
proceed whether or not Palo Alto decides to continue having all its needs provided by the regional
system.
II.Groundwater Wells
Groundwater was a major source of the city’s water supply in its history, providing all the water
used until the city connected to the San Francisco system in 1939. From 1939 to 1962, Palo Alto
used a combination of groundwater and supplies from San Francisco. Since 1962, the wells have
only been used in the 1976-1977 drought and in 1988 and 1991 during the 1988-1992 drought.
The City’s existing water well system consists of five wells (Hale, Rinconada, Peers Park, Fernando,
and Matadero). However, the existing wells are in poor condition and need to be reworked to be
relied upon.
Utilities Engineering contracted with Carollo Engineers to complete a study of the distribution
system and to make recommendations for improvements to better withstand supply disruptions due
to earthquake or other event that could result in a cutoff of supplies from the SFPUC regional
system. The °’Water Wells, Regional Storage, and Distribution System Study" (1999 Study)
recommended capital projects including refurbishing the City’s five existing wells and constructing
three new wells.
Carollo Engineers also completed the "Long-Term Water Supply Study" (2000 Study), which
examined the use the wells for full-time operation. The study evaluated water treatment options so
that the well water would pass secondary water quality standards and reduce the levels of total
dissolved solids (TDS) to levels near the existing SFPUC supply.
In order to examine operating the wells during droughts or on a continuous basis, the City engaged
Carollo Engineers to conduct a study to determine a safe volume of groundwater extraction that
would not cause ground surface subsidence, saltwater intrusion, or travel of polluted groundwater
plumes. The Groundwater Supply Feasibility Study (GSFS) was completed in April 2003. The
1999 Study, the 2000 Study, and the GSFS enabled the City to characterize the groundwater supply
options.
A.Cost
As recommended in the 1999 Study, it is assumed that the City’s existing wells will be upgraded to
improve their reliability and capacity. Thus, the costs to use the wells during droughts or on a
continuous basis do not include the capital costs to rehabilitate the existing wells or to drill new
emergency wells.2 The additional costs to use the groundwater as a drought-time or long-term water
supply include capital (for treatment or other connection changes), operating and maintenance costs,
and payment to the Santa Clara Valley Water District (SCVWD) groundwater extraction fee (known
as the "pump tax") for the groundwater that is pumped.
2 For purposes of the WIRP, it is assumed that the cost for the rehabilitation of wells and drilling of new wells is
justified entirely upon the basis of their value for emergency supply.
A-4
Attachment A
Water treatment costs
The 2000 Study contained estimates for the capital cost and operating cost for the water treatment
for each well site for four treatment options. However, the 2000 Study did not limit the production
from the wells to the levels found to be safe in the GSFS. Staff developed estimates for the cost of
treatment by combining information contained in the 2000 Study and the GSFS. The 2000 Study
contains cost estimates for four well water treatment options:
1.Blend well water with SFPUC water to meet secondary standards.
2.Treat for iron and manganese only. Water will not meet TDS standard at some wells.
3.Treat for iron and manganese and blend with SFPUC water.
4.Treat to bring well water up to quality comparable to SFPUC water.
Since the GSFS limits the use of water to an average of 500 AFY3, then only one well needs to be
fitted with treatment equipment if Treatment Option 1,2, or 4 is selected. Treatment Option 3 uses
only about 500-600 AFY per well since the water is blended with large quantities of SFPUC water to
achieve the treatment levels sought in that option. Thus, for Treatment Option 3, one well would be
all that was needed if using the wells on a continuous basis. However, if the wells were to be used
during drought-times only, then three wells would need to be fitted with treatment equipment to
produce 1500 AFY.
The best well sites for water production in droughts or on a continuous basis include Hale Well, an
existing well; E1 Camino Well, one of the proposed new wells; and a new well at the Palo Alto
Medical Foundation site ("Roth Well"). Hale Well is a high producer and has non-parkland space
available for treatment facilities. E1 Camino Well was chosen due to its proximity to SFPUC lines,
which make the blending options less costly than wells in other locations. The Roth site is also
attractive due to its proximity to SFPUC lines, making the blending options less costly than other
wells.
3 According to the GSFS, it is safe to use 500 AFY on a continuous basis or 1500 AFY if used once in three years
(such as in drought times).
A-5
Attachment A
One significant problem with the E1 Camino and Roth sites is that they are located in dedicated
parklands.4 The cost estimates for these wells sites for the four treatment options are shown in
Table A- 1.
Table A-1 - Costs for Water Treatment Options
Capital Cost ($1000)
Annualized capital costs ($1000)*
O&M costs (S/A_F)
Total cost of treatment for 500
AFY ($/AF)
Option 1
Hale El
Well Camino
Well
$1,585 $225
$127 $18
$26 $26
$280 $62
* based on 5% interest rate financed over 20 years
Roth
Well
$915
$73
$26
$173
Option
2
Hale, El
Camino
or Roth
Well
$900
$72
$37
$181
Option 3
Hale or El
Roth Camino
Well or Roth
Well
$1385 $900
$111 $72
$71 $75
$293 $219
Option
4
Hale, El
Camino
or Roth
Well
$4300
$345
$187
$877
The least expensive treatment alternative is Option 1 (blend with SFPUC water) at E1 Camino well.
Option 4 (reverse osmosis treatment) is quite expensive, but results in the highest quality water. One
caveat with treatment Option 3 is that, due to the great proportion of SFPUC water that must be
blended with well water, only about 500-600 AFY per well can be produced in this option. Thus, to
get 1500 AFY, up to three wells would need to be fitted with treatment. The other treatment options
would require only one well to produce 1500 AFY.
The 2000 Study estimated key water quality parameters for each of the treatment options for each
well site. The parameters for Hale, E1 Camino, and Roth wells are displayed in Table A-2.
Table A-2 - Key Water Quality Parameters for Wells and Treatment Options
Hale Well
El Camino
and Roth
Wells
TDS (mgL)
Iron (mg/L)
Manganese (mg/L)
TDS (mg/L)
Iron (mg/L)
Manganese (mg/L)
Standard
(1)
500
0.300
0.050
500
0.300
0.05
No
treatment
701
0.269
0.125
617
0.388
0.107
Option
1
308
0.117
0.049
203
0.143
0.043
Option
2
7Ol
<0.30
<0.05
617
<0.30
<0.05
Option
3
119
0.046
0.006
120
0.050
0.007
Option
4
120
<0.30
<0.05
120
<0.30
<0.05
(1) California Department of Health Secondary Drinking Water Standards (aesthetic-related)
4 The Roth site is planned to be designated as parkland, although it has not yet been dedicated and land needed for
the well and treatment facilities could be excluded from the parkland designation. However, the land taken up by the
well should be minimized and treatment facilities will add significantly to the land requirement. For the El Camino
well site, land devoted to wells should also be minimized, making adding treatment facilities difficult there, too.
A-6
Attachment A
Treatment Option 2 treats the groundwater only for Iron and Manganese and, therefore, does not
result in water that meets secondary water quality standard for TDS. As explained above, Option 3
would require treatment at three well sites. Therefore, Table A-3 shows the most cost-effective
combinations.
Table A-3 - Most Cost-Effective Treatment/Well Combinations
Portfolio Element
Drought-time well usage
- "medium" treatment
Drought-time well usage
- "high" treatment
Continuous well usage -
"high" treatment
Well
Roth
Hale or Roth
Roth
Treatment Option
Option 1 - blend with SFPUC water to
meet standards
Option 4 - reverse osmosis
Option 3 - blend with additional SFPUC
water (well usage only 500 AFY)
Cost
$173/AF
$877/AF
$219/AF
Since there may be problem with using additional space at the Roth well site, Hale well site is the
best candidate for any treatment option. Therefore, for purposes of the WlRP analysis, the
combinations assumed for the portfolios are shown in Table A-4 below:
Table A-4 - Well Treatment Options Used in the WIRP
Portfolio Element Well
Drought-time well usage Hale
- "medium" treatment
Drought-time well usage Hale
- "high" treatment
Continuous well usage -Hale
"high" treatment
Treatment Option
Option 1 - blend with SFPUC water to meet
standards
Option 4 - reverse osmosis
Option 3 - blend with additional SFPUC water
(well usage only 500 AFY)
Cost
$2801AF
$877/AF
$293/AF
SCVWD Pump Tax
The SCVWD levies a "pump tax" on every unit of groundwater that is pumped within Santa
Clara County. This pump tax is intended to reimburse SCVWD for the costs incurred in
maintaining and recharging the groundwater basin. The current pump tax is $340/AF for FY 02-
03. In addition to its groundwater charge, the SCVWD also has a rate for the treated water it
provides via its treated water pipelines. The chart below provides SCVWD’s historical and
projected rates for treated water and groundwater.
A-7
Attachment A
SCVWD Wholesale Water Rates
$800
$700
$600
$500
$400
$300
$200
$100
$o
Actual Pump Tax
{ ----- Pump Tax April 2003 Projection
!’---Actual Treated Water Rates
! + Treated Water April 2003 Projections
Waste Stream Disposal
The waste streams from the water treatment processes will contain elevated levels of iron,
manganese, TDS, and residuals from chemicals used in the treatment processes. There is a large
cost range associated with different solutions for these issues. These costs were not included in the
costs above. Additional description of this waste disposal issue is included in the Environmental
Impacts section below. Additional analysis will be required to determine the costs of various
disposal alternatives.
B.Availability and Reliability
The Groundwater Supply Feasibility Study determined that the wells could produce 500 AFY if used
on a continuous basis, or 1500 AFY if used once every three years, such as in drought years. If the
wells were used on a continuous basis, the wells could only provide 500 AFY in drought years.
C. Water OualiW
As recommended in the 1999 Study, it is assumed that the City’s existing wells will be upgraded to
improve their reliability and capacity. The groundwater delivered to the City’s distribution system
from City wells must meet the primary drinking water standards set by the Environmental Protection
Agency and the California Department of Health Services (DHS). The wells are tested once a year
for bacteriological contamination and a complete mineral analysis is done every three years.
The water from these wells, however; exceeds secondary (aesthetic) drinking water standards for
Attachment A
iron and manganese. In addition, the water from Hale and Rinconada wells exceeds the secondary
standard for total dissolved solids (TDS). The water quality from the City’s wells is adequate for
emergency service andthe wells are currently listed with the Department of Health Services (DHS)
as ’standby’ supply sources. As such, the wells may only be used for a maximum of five
consecutive days, and no more than 15 days in a year (California Code of Regulations, Title 22,
Section 64414).s If the wells were to be used for long-term supply, then some type of treatment is
required to reduce the levels of iron, manganese and TDS.6
Discussion of treatment options and resulting water quality is found in the Cost section above. Table
A-5 compares the water quality of SFPUC water, groundwater, and treated water from the SCVWD
to the Secondary Drinking Water Standard.
Table A-5 - Key Water Quality Parameters
Secondary Drinking Water Standard
SFPUC Water
SCVWD Treated Water Pipeline
Wells - "high" treatment (500 AFY)
Wells - "high" treatment (1500 AFY)
Wells - "medium" treatment
Wells - no treatment
Iron (mg/L)
0.300
0.024
<0.100
0.050
<0.300
0.143
0.269-0.510
Manganese (mg/L)
0.050
0.0025
<0.05
0.007
<0.05
0.043
0.125-0.170
TDS (mg.L)
500
114
-300
120
120
203
617-701
D.Environmental Impacts
Potential environmental impacts from a well station would include the installation of repair of the
facility, aesthetics, noise, any chemicals used for treatment of the water, waste stream disposal, and
any other pollution or noise caused by periodic use of backup generators.
The 2000 Study briefly examined the issues of waste stream disposal and provided the following
information:
"The waste streams from the water treatment processes will contain elevated levels of
iron, manganese, TDS, and residuals from chemicals used in the treatment processes.
As such, the City will not be able to discharge this water to the storm drain. Rather it
will need to be discharged to treatment facilities that can remove the chemicals from
the waste stream, discharge the clear water, and dispose the residuals properly. It is
probably not feasible to install such treatment facilities at each well site equipped with
water treatment facilities due to siting, expense and other logistical constraints. The
5 Long Term Water Supply Study, 2000, page 2. This ’standby’ listing would remain even if the existing wells were
rehabilitated.
6 Secondary water quality standards can be exceeded for longer periods of time if customers are notified. The
notification option would avoid the need for treatment.
A-9
Attachment A
Palo Alto Regional Water Quality Control Plant (RWQCP), however, is a potentially
viable alternative to process the waste streams.’’7
III.Recycled Water
This option involves the development of a physical system to transport treated wastewater to
nonpotable end uses. The source of the recycled water is the Palo Alto Regional Water Quality
Control Plant (RWQCP) of which the City is the operator and a part owner.
In 1992-1993 the City and the other RWQCP owners undertook a Water Reclamation Master Plan
(Master Plan). This Master Plan recommended a five-year, three-stage implementation for recycled
water development in the service area of the RWQCP. However, in 1995 the RWQCP owners
decided not to pursue any of the recommended expansion stages of a water recycling system.
For the purposes of the WIRP, three recycled water projects levels were developed using the end-
uses shown in Table A-6.
Table A-6 - Recycled Water End Uses for the WlRP
Level 1
Total end use = 134 AFY
Level 2
Total end use = 347 AFY
(includes Level 1 projects)
Level 3
Total end use = 1286 AFY
(includes Level 2 projects)
Palo Alto End Uses
Baylands Athletic Center
US 101 at Embarcadero
Eleanor Park
Rinconada Park
Peers Park
US 101 at Oregon
E. Meadow Circle/Fabian Way
US 101 at San Antonio
Don Jesus Ramos Park
Mitchell Park
Robles Park
Ventura Park
Boulware Park
Stanford Research Park
Bol Park
Veterans Admin Med Center
Terman Park
Alta Mesa Memorial Park
Estimated Use (AFY)
29
4
14
52
35
4
30
4
34
141
39
8
5
525
21
70
121
150
The Level 1 project is "Project A" identified in the Master Plan. The project is a pipeline from the
RWQCP running down Embarcadero to 101, then down Charming to Newell, back across
Embarcadero to Seale, then down Seale, crossing Alma to Park Blvd. and crossing E1 Camino to
Stanford. It is assumed that Stanford University would connect to the system and use about 500
7 Long Term Water Supply Study, pages 5-6
A-10
Attachment A
AFY. Thus, Level 1 will provide about 634 AFY including the uses for Palo Alto and Stanford.
The Level 2 project adds a pipeline down Bayshore to Mountain View, particularly Shoreline Park
and picks up the additional Palo Alto parks in the table. The project includes a pipeline from
Bayshore down East Meadow to Mitchell Park. It is presumed that Shoreline Golf Links and
Moffett Field would each use 440 AFY. Miscellaneous end uses along the way in Mountain View
could add about 12 AFY. Level 2, then, would add about 1239 AFY (347 AFY in Palo Alto).
The Level 3 project would extend the pipeline from Mitchell Park down East Meadow to Alma
Street and connect to the Level 1 pipeline at Seale and Alma to create a loop. It would also include a
pipeline from Alma to and through the Stanford Research Park. Thus Level 3 project usage would
total about 2178 AFY with 1286 AFY used in Palo Alto.
A. Cost
No new cost estimates for recycled water projects have been developed since the 1993 Water
Reclamation Master Plan. In that study, four phases of a recycled water project were identified, as
shown in Table A-7.
Table A-7 - 1993 Water Reclamation Master Plan - Proposed Stages
Projec
t
Stage
A
AF/year in
RWQCP
service area
2289
Cumulative
Capital Cost
($1992)
$8.0 million
End Use Description
Stanford Univ. (1800AFY) plus PA parks along way,
including Rinconada Park
Alt B 3509 $22.6 million Loop to pick up Mitchell Park, Stanford Research Park,
VA Medical Center
C 4405 $27.1 million Addition of pipeline to Mountain View adding Shoreline
and Ames/Moffett
D 4717 $30.0 million Addition of pipeline in Mountain View picking up parks
and extension north along 101 towards East Palo Alto
However, the projects identified overstated the end use for many of the stages. For example, the
study assumed that Stanford would take 1800 AFY, but Stanford subsequently indicated that it could
not use more than 500 AFY. Also, existing uses at Greer Park, Palo Alto’s Municipal Golf Course,
and use at the Municipal Service Center were included. To update the 1993 estimates with the new
information, staff made the adjustments shown in Table A-8.
A-11
Level
Table A-8 - Recycled Water Projects Used in the WIRP
1992 1992 capital
total cost
AFY estimate
Attachment A
Modified
AFY
Modified
capital cost
($1992)
Modified
capital cost
($2003)
Annual
cap. cost
(5%,
20yrs)
$555,0OO
Average
unit cost
(S/A_V)
1 2289 $8,000,000 634 $5,000,000 $6,900,000 $876
2 2502 $15,000,000 1239 $12,000,000 $16,600,000 $1,333,000 $1076
3 3509 $22,600,000 2178 $19,600,000 $27,100,000 $2,177,000 $1000
Recycled water operating and maintenance costs were estimated at approximately $60/AF in the
1993 Master Plan (in $1992). Other regional users of recycled water (including San Jose and Santa
Clara) estimate that O&M costs are about $100/AF. In addition, it is expected that a one-time cost
for rehabilitation and conversion costs at the RWQCP total about $250,000.
These costs are the total costs for recycled water - they do not determine what beneficiaries would
pay for the water. For example, the RWQCP has an interest in reducing its outflows to the bay and
would pay part of the cost of developing recycled water. The Santa Clara Valley Water District
offers an incentive of $163/AF to develop recycled water. It is expected that Palo Alto would
receive this incentive.
B.Availabili _ty and Reliability
The RWQCP currently processes approximately 25 million gallons per day (MGD) of wastewater
and has 4 MGD of advanced treatment recycled water capability (of which less than 2 MGD, or
2240 A_F/year, is presently operating). The existing water recycling capacity at the RWQCP is being
used for the following:
¯Providing irrigation water for Palo Alto’s Greer Park in Palo Alto and the Palo Alto
Municipal Golf Course.
¯The Palo Alto Municipal Service Center uses a small amount of recycled water for various
uses including use in street sweepers, dust control at construction sites, vehicle washing, and
for irrigating median strips of roads.
¯Providing water for enhancements at the Emily Renzel Marsh in Palo Alto. The RWQCP
pumps from 1.0 to 1.5 MGD of water into the 14-acre freshwater marsh. This water does not
get the full recycled water treatment, just the standard tertiary treatment from the plant.
¯Trucks collect recycled water for dust control at construction projects.
¯CALTRANS may use up to 50,000 gallons per day in the summer for irrigating (by truck)
the median strips on local highways.
If usage rose significantly, it is conceivable that the recycled water capacity at the RWQCP would
need to be increased. However, for purposes of the WlRP, it is assumed that existing capacity is
sufficient for any potential uses identified in the 1993 Master Plan.
The supply of recycled water is available even in droughts in volumes well beyond what could be
A-12
Attachment A
needed to supply the largest recycled water project in the RWQCP service area. Recycled water
from the RWQCP is a drought-proof, "firm" water supply for the City. However, the water is only
available for non-potable uses (e.g. irrigation).
C.Water Quality
The quality of the recycled water from the RWQCP is sufficient to pass the "unrestricted use"
category defined by California’s Title 22. There may be problems with the combination of saline
soil and the recycled water’s salt content in some areas, and these potential problems have been
identified in the Master Plan report. Mitigation could be achieved by blending with potable water
for these areas.
D.Environmental Impacts
Environmental impacts from the use of this source are primarily due to the impacts of construction
of the pipelines and other physical facilities (pumping stations and storage reservoirs). The
diversion of discharge to the South Bay is a positive environmental impact. This, in fact, is the
prime driver for the South Bay Water Recycling Project being undertaken by San Jose, Santa Clara
and Milpitas.
The Regional Water Quality Control Board wants the discharges reduced for at least two reasons: 1)
the wastewater contains heavy metals (e.g. copper) which bioaccumulate in marine animals.
Reducing the discharges reduces the heavy metals going into the bay; and 2) the wastewater can
change the salinity of salt water marshes and convert saltwater marshes to freshwater marshes.
IV.Treated Water From the Santa Clara Valley Water District
Long-term plans of the Santa Clara Valley Water District (SCVWD or District) include extending its
West Pipeline (WPL), a treated water pipeline, from where it currently ends at Foothill Expressway
and Miramonte to a Palo Alto connection point at Foothill Expressway and Arastradero (a distance
of about 4 1½ miles). Staff from Palo Alto and other agencies (Mountain View, Purissima Hills
Water District (PHWD), Cal Water, and Stanford) interested in the WPL wrote a letter to SCVWD
in February 2002 asking it to evaluate this project and to conduct a study of options.
In December 2002, the District completed a draft conceptual study of extending its WPL, including
an option for an intertie with the SFPUC Bay Division Pipelines 3&4. The retailers, except for
PHWD, indicated that they want water from the District only in drought years, in emergencies, or as
an alternative to SFPUC, if cost-effective.
The study is conceptual in nature and the idea of extending the WPL will be evaluated in more depth
in several ongoing District studies, including an Integrated Water Resource Plan and an evaluation
of its infrastructure vulnerabilities. In the latter study, the extension would improve operational
flexibility and reliability (especially if it included an interconnection with the SFPUC).
The conceptual study’s goals were to answer three questions:
1.Is water available to be supplied to the WPL Extension? - The study concluded that the
District has adequate supplies in average water years, but not in dry years. Additionally, if
A-13
o
Attachment A
retailers expect water in emergencies, there is no guarantee that the District would have
water available and not be affected by the same emergency that would affect SFPUC.
Is the pipeline constructible roughly as per requests from retailers? - Yes, it is.
What are the broad options and their order ofmaguitude estimated costs? - There are two
main options:
¯Extend a 42" pipeline where it currently ends to Page Mill Road and parallel the entire
WPL back to the Rinconada Water Treatment Plant (RWTP). Estimated cost of project
-- $68 million = $53 million (construction) + $16 million (planning and design); or
¯Extend 54" pipeline where it currently ends to Page Mill Road, where an intertie with
SFPUC Bay Division Pipelines 3&4 would be built and parallel the entire WPL back to
RWTP. Estimated cost of project = $95 million -- $73 million (construction) + $22
million (planning and design).
The study recommends that any further action on the WPL Extension is premature at this time due to
the need to study the entire District operations and infrastructure in the Reliability Study. The
District is fully aware of the vulnerabilities that exist on the West Side and expects that the extension
and a potential intertie will add value. However, this study is not expected to be available until mid-
2004. The District also recommends that other solutions for enhanced reliability for the retailers in
question be evaluated and discussed with the SFPUC.
The costs identified in the conceptual study far outweighed earlier estimates for the pipeline
extension of $15 million. One of the underlying assumptions the District used to size the extension
was that each retailer would want enough water to meet its peak month average daily load.
However, this would not be necessary for the retailers and, thus, the cost of the extension would
decline, especially if paralleling the existing pipeline was not required. In addition, the District
stated that if the intertie option were selected, the increased cost for the intertie would be shared
between the District and the SFPUC. Thus, using the study’s estimates, the additional cost for the
intertie is $28 million.
A large component of the costs for each of the options the District evaluated was for paralleling the
existing pipeline. If expected loads were less so that no paralleling were required, the costs for the
extension alone would total about $25 million (construction costs of about $19 million plus $6
million for planning and design). This cost could conceivably be shared by the new users of the
pipeline - Palo Alto, Stanford, and Purissima Hills Water District.
Even if there were no direct connection to Palo Alto from a WPL extension, Palo Alto’s supply
reliability would be enhanced if the WPL were extended to create an intertie between the SCVWD
treated water line and the SFPUC’s Bay Division Pipelines 3&4.
A. Cost
For purp6ses of the WIRP, staff estimates that the cost to Palo Alto of a connection would be $15
million that would be paid to the District using its standard cost recovery mechanism: agreement to
buy a minimum quantity of water each year at the District’s treated water wholesale rate such that
the first year’s annual payment would equal a "mortgage payment" on the capital cost. The result is
essentially a take-or-pay obligation for a fixed amount of water.
A-14
Attachment A
Using a 4.5%/year interest rate and a 20-year financing period, the annual cost is $1.15 million, or a
take-or-pay volume of 2,155 AFY of treated water (based on FY 2006 wholesale rate projections,
given that the pipeline would not be in place until then). Because of the take-or pay requirements, if
the City took less than the contracted minimum amount of water, then the per-unit cost of the water
received would increase.
See the above section on groundwater for SCVWD’s historical and projected wholesale rates.
B. AvailabiliW
The availability of the source is presumably the contracted amount stated in the water delivery
schedule portion of the Treated Water contract. As described above, this contracted amount would
be approximately 2,155 AFY. The contracted amount does not mean a guaranteed supply during a
drought period. It is expected that the District would institute rationing during drought periods and
that droughts for the District would coincide with droughts declared on the SFPUC system.
It is possible to have a strategy to only use District water in drought years. For example, one
strategy would be to use the drought-time allocation of District water (say, 75% of the take-or-pay
volumes) only in droughts and not take any water in normal years. However, the annual payment
would be required in any event. This strategy would be attractive for its drought-time availability,
but would come at a cost.
C.Water OualiW
The water quality of SCVWD treated water conforms to all applicable drinking water standards;
however, the water has historically been of inferior quality compared to SFPUC’s. The table in the
Wells section of this report compares several water quality parameters of the SCVWD treated water,
SFPUC supply, and the City’s groundwater.
Carollo Engineers evaluated the SCVWD Treated water line in the Long Term Water Supply Study
(2000 Study) and provided the following information:8
In terms of water quality concerns, therefore, Palo Alto has two options for incorporating a
SCVWD supply. The City could isolate a portion of its water distribution system to be supplied
only with SCVWD water, or the City could provide a chemical feed system to adjust the pH of
the SCVWD water before it enters the distribution system. Isolating a portion of the system for
SCVWD supply could be fairly straightforward or very complex. To isolate pressure area 3 for
example, the City would simply close the two SFPUC supply points (the Lytton turnout and the
new turnout on E1 Camino Real) and connect the SCVWD supply at those points. This is similar
(in terms of complexity) to how Mountain View incorporated its SCVWD supply. The capital
cost of isolating pressure area 3 would be incidental to the overall cost of incorporating the
SCVWD supply. Isolating a portion of pressure area 1 or 2, however, would require installing
numerous zone valves and distribution system piping. This is similar to how Milpitas
incorporated its SCVWD supply and, depending on the location and extent of area to be served
SCVWD water, it would conceivably add more than $1,000,000 to the capital cost of adding the
SCVWD supply.
8 Long Term Water Supply Study (2000 Report) pages 19-20.
A-15
Attachment A
To simply bring the SCVWD water into the City’s distribution system without creating a
separate zone, it is recommended that the pH of the SCVWD water be adjusted to render it more
compatible with the SFPUC water. The cost of the chemical feed facilities would depend on
where in the City they were constructed and the capacity of the SCVWD supply. It is estimated
however, that a caustic soda chemical feed facility for this purpose would cost approximately
$500,000 to $750,000 including all project costs except land acquisition.
D. Environmental Impacts
Environmental impacts from this source include those due to the impacts of construction of the
pipeline, and the secondary local growth impacts that may result from additional water being
supplied to the City. External impacts would also include the impact associated with SCVWD
seeking new water supplies to meet the Palo Alto demand. An Environmental Impact Report would
likely be required as part of the connection to this water supply.
V.Demand-Side Management
Demand-Side Management (DSM) generally refers to conservation measures which utility
customers undertake at their homes or businesses. These measures result in less demand for water
thereby freeing up the supply for other uses. Because of this, DSM resources are often referred to as
an alternative source of supply.
These resources can be divided into two general categories. The first category contains those
measures that involve an installed device that increases the water use efficiency in performing an
end-use task. An example is the installation of an ultra-low flush toilet. The assumption is that the
task is performed no less satisfactorily due to the installation of the device. The second category of
DSM resource is dependent upon customer behavior. The saving of water for these measures
requires some change of use patterns by the customer. An example of this is adjusting outdoor
watering schedules seasonally rather than setting them once for all year.
It is difficult to accurately measure the cost and amount of water supply provided through DSM
efforts. Staff has utilized information from the City’s 1990 and 1995 Urban Water Management
Plans (UWMP), data from Marin Municipal Water District’s Water Efficiency and Conservation
Master Plan, and data from the SCVWD Integrated Resource Plan. Additional analysis will be
required if the City plans to utilize DSM as a significant part of future water supply.
A. Cost
The costs for DSM vary according to the measure. Costs are significantly impacted by assumptions
about the cost of the device, water savings attributable to the device, measure lifetime, program costs
required to obtain customer participation, and effectiveness of any such program. These values are
not always straightforward and calculable.
The DSM resource is fundamentally different from supply-side resources. The utility is not in
control of the devices and they are widely distributed over the service area. The utility can control
only to a small degree who buys the devices, whether they are installed, and how long they remain
A-16
Attachment A
installed. Many of these questions are addressed in the program design stage. The assumption is
that DSM programs will be designed to minimize aspects such as free-riders, cream skimming, and
lost opportunity of increased savings.
The section below indicates the cost of DSM for two proposed program levels. These costs are the
total costs of the measures. The cost to the Utility could be substantially less, depending upon
program design. For example, if a measure cost $1000 and $250 to install, the Utility may have a
program that pays for installation or for a fraction of the measure’s cost. The cost split between
utility and participant is not determined at this time - that would be determined for each measure and
each program when the program is developed.
B. Availabili _ty and ReliabiliW
The potential amount of water available through the DSM resource depends on many factors. The
amount identified in the 1990 UWMP for the programs analyzed was a total of 7,236 AF over a 20-
year period. The greatest amount for any one year was 667 acre-ft/year at the end of the fifth year
from the start of implementing a 5-year program. A savings of 667 AFY corresponds to about 4.5%
of the City’s 14,775 AF demand for 2001-02.
It is unclear how much remaining DSM potential there is within the City. Many customers have
already implemented water conservation measures (e.g. toilet replacement, new showerheads,
landscaping retrofits). However, Palo Alto’s residential customer per capita water use is well above
average for the BAWUA agencies.9
The Matin Municipal Water District identified cost-effective DSM programs that, if fully
implemented, would account for a demand reduction of 22-32%. ~0
A measure-by-measure evaluation of DSM programs yielded the estimates for potential and cost
shown in Table A-9.
Table A-9 - Evaluation of Potential DSM Programs
Measure
Residential audits- outside
savings
Residential audits - inside
savings
Commercial/Industrial Large
landscape
Residential high-efficiency
washing machines
Commercial high-efficiency
washing machines
Potential
(AFY)
421
343 ........
352
186
81
Cost
($/AF)
1564
Included
in above
783
Basis
3870
1111 60% of all remaining washers
14% reduction in outside water useif
outside water use if46% of all water use
15% savings of estimated indoor (non-
toilet) water use
20% savings of estimated outdoor water
use
60% of all remaining washers
9 BAWUA Annual Survey FY 2000-2001
10MMWD Water Efficiency and Conservation Master Plan, 1994, page ES-19.
A-17
Attachment A
Measure
CommercialFmdustrial Ultra
Low Flow Toilet
Residential Ultra Low Flow
Toilet
Residential Dishwashers
Potential
299
485
Cost
($/AF)
1317
883
1000
Basis
90% of estimated toilets that are
annually replaced
90% of estimated toilets that are
annually replaced
Replacing 100% of water wasting
dishwashers (-50% of all DWs)
The sum of the total potential is 2173 AFY, or about 14.7% of the FY 2001-2002 citywide use.
For purposes of the WIRP, two levels of DSM programs were developed. Level 1 results in about
2.5% reduction in annual consumption and relates to about 20% of the potential for most measures,
but no program for residential high-efficiency washing machines or dishwashers. Level 2, assuming
about 35% of the potential for the programs, results in about 5% reduction in annual consumption.
Table A-10 - DSM Program Levels Used in the WIRP Analysis
Measure
Residential audits - outside
savings
Residential audits - inside savings
Commercial/Industrial Large
landscape
Residential high-efficiency
washing machines
Commercial high-efficiency
washing machines
Commercial/Industrial Ultra Low
Flow Toilet
Residential Ultra Low Flow Toilet
Residential Dishwashers
Totals
Level 1
Penetration
(AFY)
84
69
70
0
16
60
97
0
396
Total
Annual Cost
$132,000
Incl. above
$55,000
0
$18,000
$79,000
$86,000
0
$370,000
$932/AF
Level 2
Penetration
(AFY)
148
120
123
65
28
105
170
2
761
Total
Annual Cost
$231,000
Incl. above
$96,000
$252,000
$32,000
$138,000
$150,000
$2,000
$901,000
$1,183/AF
The question of reliability is based on assumptions made in the design of DSM programs. A certain
amount of the DSM resource used for planning purposes is expected to be a reliable, long-term
supply. Some of this resource will be lost over time. It is necessary to estimate the extent to which
devices will be removed after installation and the extent to which behavior will return to less
conserving practices. These estimates must be made when evaluating water savings potential and
cost.
A-18
Attachment A
C.Water Qualit-v
The water quality of DSM resources is not an issue. DSM preserves the water of the highest quality
for those uses that require the high quality.
D. Environmental Impacts
Negative environmental impacts from this source include those due to the impacts of device
manufacturing and/or installation and the disposal of replaced devices. These negative impacts
appear to be quite minor. Positive environmental impacts may accrue from the use of the saved
water -- however, accurately quantifying the benefits from conserved water is still a difficult and
controversial task.
A-19
AI IALIII~Ir’NI L
MEMORANDUM
2
TO:UTILITIES ADVISORY COMMISSION
FROM:UTILITIES DEPARTMENT
DATE:AUGUST 6, 2003
SUBJECT: WATER INTEGRATED RESOURCE PLAN GUIDELINES
REQUEST
Staff recommends that the Utilities Advisory Commission advise that the Council approve
the 2003 Water Integrated Resource Plan Guidelines to be used as direction to staff for
pursuing new water supplies and protecting existing supplies.
BACKGROUND
The City of Palo Alto Utilities (CPAU) last completed a Water Integrated Resource Plan
(WIRP) in September 1993. The 1993 WIRP evaluated all available alternatives in order to
establish CPAU’s position on the development of a recycled water project proposed by the
Palo Alto Regional Water Quality Control Plant (PARWQCP). Ultimately, a greatly
expanded recycled water project was not built due to its cost relative to the availability and
cost of high quality water from the San Francisco Public Utilities Commission (SFPUC).
The 2003 WIR2 again examined future long-term water supply options in a phased approach.
CPAU has completed many studies and reports to support the 2003 WIRP, including those
listed in Table 1 below.
Table 1 - List of Reports Related to the 2003 WIRP
Report
Customer
Survey
Preliminary
Assessment
Date
Report to UAC in
October 1999
Final Report to
UAC August
2000
Description
Survey of small and medium commercial and
residential customer on attitudes towards water
quality and cost
Description of the characteristics of existing and
potential future water resource options
Report
W1RP
Update
1999 Study
2000 Study
2001 Study
Groundwater
Supply
Feasibility
Study
WIRP
Update
West
Pipeline
Extension
Conceptual
Evaluation
Date
Report to UAC in
September 2002
December 1999
May 2000
September 2001 -
to UAC in
October 2001
April 2003 - to
UAC in May
2003
Report to UAC in
June 2003
March 2003 - to
UAC in July 2003
Description
Update on information and information gaps on each
of the water resource alternatives.
Recommended CIP projects to improve water
reliability
Evaluated use of the wells for long-term use,
including the needs to improve groundwater quality
via treatment
Analyzed options, including the CIP projects
recommended in the 1999 Study, under additional
water shortage scenarios, including droughts and 30-
60 day outages
Evaluated whether operating the wells in droughts or
on continuous basis would harm the aquifer via land
surface subsidence, saltwater intrusion, or migration
of contaminated groundwater plumes
Study completed by the Santa Clara Valley Water
District to evaluate the feasibility of extending its
West Pipeline south to Palo Alto or to an intertie with
the SFPUC at the Bay Divisions Pipelines 3&4
The first phase of the WIRP was completed during 2000 when staff completed the
Preliminary Assessment. The Preliminary Assessment provided a high level overview of
each of CPAU’s water resource alternatives and helped identify the most promising supply
alternatives to be further analyzed in subsequent phases. The Preliminary Assessment was
presented to the UAC as an information item on August 4, 1999 (draft version) and August 2,
2000 (final version).
In June 1999, CPAU surveyed its small to medium commercial and residential water
customers to ascertain their values and preferences. The survey results were reported to the
UAC at its October 6, 1999 meeting. The main conclusion of the survey was that water
quality is of the utmost important to residents and businesses in Palo Alto.
The second phase in the WIRP process consists of the development and evaluation of
"themed" water supply portfolios so policy makers can determine the proper balance between
cost, quality, reliability, and environmental factors. An update was conveyed to the UAC at
its September 2002 meeting. At that time, several pieces of missing information were
identified that needed to be further developed in order to complete the WIRP. At its May 7,
2003 meeting, the UAC discussed the conclusions from the Groundwater Supply Feasibility
Study.
The WIRP work has been coordinated with work by CPAU Engineering to increase the
distribution system reliability. Under a contract with the City, Carollo Engineers completed a
study of the water distribution system in December 1999 and produced a report "Water
Wells, Regional Storage, and Distribution Systems Study" (1999 Study). The 1999 Study
recommended a list of capital projects to improve the system’s ability to meet water demands
during a temporary shutoff of water from the regional water system operated by the SFPUC.
The recommended improvements related to addressing CPAU’s emergency water supply
deficiency included rehabilitating the five existing wells and drilling up to three new wells.
To examine the issues and costs of using the newly rehabilitated or drilled wells as active
sources of supply, CPAU again engaged Carollo Engineers to complete another study. The
study report, finalized in May 2000, was entitled "Long-term Water Supply Study" (2000
Study). The 2000 Study examined in greater detail the realities associated with using the
wells as active sources of supply. Specifically, the 2000 Study analyzed potential water
treatment technologies to address the water quality issues of Palo Alto’s groundwater and
also evaluated each existing and potential new well site to determine whether treatment
facilities could be sited there. The study concluded that certain of the wells are better than
others for siting treatment facilities due to available space, well water quality, and well
production capability.
The 2000 Study also evaluated optional supplies as to their ability to meet future supply
needs as well as whether any of these supplies could obviate any of the capital projects
recommended in the 1999 Study. The alternatives examined in the 2000 Study included: 1)
using the wells for active supply either on a long-term basis or during droughts; 2) using
groundwater for irrigation; and 3) connecting to the Santa Clara Valley Water District
(District) treated water pipeline. The study concluded that the improvements recommended
in the 1999 Study were superior to the alternatives studied on the basis of cost or the ability
to meet the established emergency criteria.
Carollo Engineers completed the "Alternative Emergency Water supply Options Study"
(2001 Study) to provide a high-level analysis of the various water supply options under
different emergency supply options under different emergency scenarios. The conclusions
of the 2001 Study were that the capital projects recommended in the 1999 Study were the
best solution and that the wells could assist in shortages such as a multi-year drought and 30-
60 day outages as well as the 8-hour outage they were designed to handle.
In 2002, CPAU again engaged Carollo Engineers to conduct a Groundwater Supply
Feasibility Study to "evaluate whether operating one or two of the City’s water wells as
active supplies would cause significant decrease in groundwater levels or deterioration in
groundwater quality." The UAC received that study at its June 4, 2003 meeting. The study
concluded that producing 500 acre-feet/year (AFY) of water from the wells on a continuous
basis or 1500 AFY in an intermittent basis, such as during a drought year would not result in
subsidence, saltwater intrusion, or migration of contaminated plumes. One well producing
1000 gallons per minute (gpm) would provide 1500 AFY. Thus, only one or two wells
would need to be operated to provide the water quantifies identified, if the City Council
decided to operate the wells during droughts or on a continuous basis.
The UAC received a copy of the District’s West Pipeline Conceptual Evaluation at its July 9,
2003 meeting. This study was conducted in response to a request from several county water
retailers, including CPAU, to evaluate extending the District’s West Pipeline (WPL) that
currently ends at Miramonte Road and Foothills Expressway to a point in Palo Alto. In
addition, the study examined creating an intertie between the WPL and the SFPUC’s Bay
Division Pipelines at Page Mill Road. The WPL study concluded that the conceptual
projects were constructible, but that no decisions could be made until additional studies the
District is conducting are concluded. These ongoing studies include the District’s project to
evaluate its system reliability, its asset management program, and its Water Treatment Plant
Master Plan Project. The District doesn’t expect results from these studies until the fall of
2004.
The information obtained from the 1999 Study, the 2000 Study, the 2001 Study, the
Groundwater Supply Feasibility Study, and the District’s conceptual study on the WPL
Extension was used to characterize the supply options examined for the 2003 WIRP.
At its June 4, 2003 meeting, the UAC was updated on the 2003 WIRP and its analysis of
several water portfolio options. The conclusion was while relying solely on water from the
SFPUC resulted in the lowest cost and highest water quality, there would likely be shortages
during drought years. Drought-year reliability could be enhanced with the addition of other
resources. Options include using groundwater to supplement droughts, expanding the
recycled water system, expanding the demand-side management (DSM) program, and
connecting to the treated water pipeline from the District. If groundwater were to be used,
then some level of water treatment could be added to improve the water quality of the
groundwater.
The WIRP update to the UAC on June 4, 2003 summarized the key attributes for each of the
potential new water resources in Table 2 below:
4
Table 2 - Summary of Current and Available Resources
Projected cost of
water (S/AF) *
Availability of
~vater (A_F/year)
Note that load
forecast for 2010 =
-15,000 AF/yr
Water Quality
In FY 03-04
In FY 12-13
In normal
years
In drought
years
479
1100
17,000
11,850
Very high
375
670
500 **
500 **
Depends
on
treatment
375
670
1500
1450
365
365
976 1100
1000 1150
134 1286
134 1286
Depends N/A Non-Non-
on potable potable
treatment
460
770
1000-
2000
750-
1500
High
*Note that the cost shown for groundwater options is solely the projected wholesale water
cost and does not include the cost of treatment.
** The limit of 500 AFY each year or 1500 AFY once every three years (such as in a drought) was
developed in the Groundwater Supply Feasibility Study by determining the maximum safe
groundwater extraction rate without significantly impacting the environment (e.g. to prevent
ground surface subsidence, travel of polluted groundwater plumes, and saltwater intrusion).
DISCUSSION
Staff further refined the 2003 WIRP analysis results presented to the UAC in June 2003. The
results show that there are tradeoffs between three key factors: cost, availability in a drought,
and water quality. Environmental impacts are also a consideration in determining the best
portfolio for the community.
Results of Analysis
Key results from the 2003 WIRP analysis are shown in the Table 3 below.
Table 3 - Cost and Drought-time Deficit for Water Resource Alternatives
Resource Description
Use
groundwater
during
droughts
only
Deve!op
recycled
water
Use SFPUC water only
No water treatment
Treat only for Manganese and Iron .......
Blend with SFPUC water to meet all standards
Reverse osmosis treatment for high water quality
Level 1 project (includes Rinconada, Peers
Parks) ....
Level 2 project (include.~ Mitchell, Ramos Parks).
Level 3 project (includes Stanford Research
Park, Alta Mesa, VA Medical Center, Terman
Park)
Develop enhanced DSM programs
Connect to District’s .Use in droughts only
.. !reated water line Use continuously
* Present value of costs over 20-year analysis horizon
Net
additional
cost
($millions)
Base: $200
$4.4
$5.5
$6.0
$10.0
Average
drough~
year
deficit
(AVV)
** $5.8
$22.5
$4.1
2167
667
Drought
deficit
(% of
normal
year
demand)
14.4%
4.5%
$0.04 2033 13.6%
$0.85 1~20 12.1%
$2.10 881 5.9%
1848 12.3%
793 5.3%
Includes all costs of DSM measures and program administration - amount paid by CPAU
would be less since participant would pick up some of the cost of the measure, depending
upon program design.
Table 3 shows the trade-off between cost and drought-time deficit for the water resource
alternatives. For example, using only SFPUC water results in the lowest cost, but the largest
drought-time deficit. Additional resources reduce the drought-time deficits, but cost more.
Another trade-off to consider is the water quality impacts of the water resource alternatives.
There is no water quality impact for the enhanced DSM program alternative. For recycled
water, the best quality water would still serve all end uses needing potable water while
irrigation end uses would receive recycled water of adequate quality for that end use. The
District’s treated water, although meeting all water quality standards, is generally of lower
water quality than SFPUC’s. The water quality of the groundwater is dependent upon the
treatment, if any, provided. The water quality of the groundwater for each treatment
alternative was discussed in the June 2003 report to the UAC.
Examination of Resource Alternatives
Using groundwater during droughts onl~
If groundwater were used during droughts, costs would increase even if the water weren’t
treated since more water is purchased. The additional purchase of groundwater costs an
additional $4.4 million over 20 years and reduces the deficit during droughts by about 10%.
For example, if a drought occurred resulting in a call to reduce CPAU’s water use by 20%,
then Palo Alto citizens and businesses would need to reduce their water usage by 20% if no
groundwater were used. If groundwater were used, then the cutback needed would only be
10%.
Presumably, Palo Altans place a value on water of at least the retail water rate. Since the cost
of the groundwater is well below the retail water rate, we can assume that they would prefer
purchasing it than living without it. However, the cost of treatment is another question. The
additional cost to treat the groundwater depends on the quality level desired. It would cost an
additional $1.1 million to add minimal treatment for manganese and iron. Blending with
SFPUC water to meet all secondary standards would cost $1.6 million more than no
treatment. To get the highest level of treatment (reverse osmosis) would cost about $5.6
million.
Developing recycled water
Recycled water projects look quite attractive, especially as the cost would be shared with
wastewater ratepayers since there are benefits to them as well. When recycled water projects
were analyzed in 1993, they were found to be too costly. However, since SFPUC costs are
projected to rise dramatically, investing in recycled water could save a significant amount of
money in the future. In addition, an increase in drought-time reliability could be achieved.
However, this would depend upon whether the Interim Water Shortage Allocation Plan1 was
continued beyond its scheduled expiry in 2009. In addition, environmental benefits would
accrue from reducing discharges to the bay. Recycled water projects bear monitoring and
continued discussions with the owners of the PARWQCP, the source of recycled water.
Connection to the District treated water pipeline
A connection to the District’s West Pipeline, a treated water pipeline, has a capital cost of
about $15 million2. The costs would be repaid to the District based on a take-or-pay formula
designed to cover the cost to finance the project cost. Therefore, if used on a drought-time
only basis, the annual payments would still have to be made. Since this water is not needed
in normal years, the water would displace higher quality water from the SFPUC. However,
this water is expected to be cheaper than water from the SFPUC, so there is the potential for
savings. In the 1999 survey of customer values and preferences related to water, Palo Alto
residents and business indicated that water quality is the top concern, so full-time usage of
I The IWSAP allocates water based on a formula in which only a small part depends on past usage so that increased
development of recycled water, DSM programs, or other alternative supplies do not decrease significantly the
amount of water allocated in future droughts. The City Council approved the IWSAP on January 22, 2001
(CMR:113:01).2 The costs of a connection to the District’s West Pipeline Extension are dependent upon the costs of the extension
and the methodology on which the costs are allocated to end-users. Costs of an extension were estimated at $70-95
million in a recent study (with costs allocated to CPAU of up to $41 million), but the study assumed unrealistically
high usage.values for potentia! end-users, such as CPAU. Capital costs of extending the pipeline only to CPAU are
about $15 million.
the water to replace SFPUC water does not appear to be a good choice.
The District is examining the feasibility and reliability benefits of extending its West Pipeline
to an interconnection with the SFPUC Bay Division Pipelines 3 and 4 at Page Mill Road and
Foothill Expressway. If that were completed, perhaps a connection to Palo Alto could be
done at lower cost. Even if no connection were made to Palo Alto, the intertie would
increase the overall SFPUC regional water system reliability.
Demand-Side Management (DSM) programs
Water efficiency programs warrant constant monitoring. Palo Alto has participated in many
water DSM programs that have been offered through the Bay Area Water Users Association
(BAWUA) and the District. These regional programs result in lower administration costs
and benefit from regional advertisement and implementation.
CPAU has not done a thorough evaluation of DSM program alternatives in over 10 years, but
has concentrated on meeting Best Management Practices as defined by the California Urban
Water Conservation Council. DSM programs should be evaluated recognizing that wholesale
water costs are increasing and that DSM programs assist in reducing the deficits during
drought times.
Balancing objectives
Water rate payers can be queried again as to their preferences to help find the appropriate
balance between cost, quality, reliability, and environmental impact.
Conclusions and Recommendations
Supplies from the SFPUC are adequate in normal years, but additional supplies are needed in
drought years to avoid shortages. Since the SFPUC supplies are adequate in normal years,
the following conclusions can be drawn:
¯It is not recommended to seek supplies for use on a continuous basis unless there is
another benefit that can be identified.
¯It is not recommended to connect to the District’s treated water line for ongoing water
needs.
¯Continuous use of the wells is not recommended.
¯Expanded use of DSM programs and/or recycled water may be worthwhile for the
environmental benefits and to reduce the drought-time deficit.
The options to reduce the supply deficit during droughts include using groundwater,
connecting to the District’s treated water pipeline, developing recycled water; and expanding
water efficiency programs.
Proposed WIRP Guidelines
Based on the discussion above and the recommendations and drawn from the analysis and
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many studies completed to date, staff developed the following proposed guidelines to direct
the development of new water resources and the preservation of existing supplies.
The Proposed Water Integrated Resource Plan Guidelines consists of the following elements:
Guideline 1 - Preserve and enhance SFPUC supplies: With respect to CPAU’s primary
water supply source, the San Francisco Public Utilities Commission, continue to actively
participate in the Bay Area Water Supply and Conservation Agency (BAWSCA) to assist in
achieving BAWSCA’s stated goal: "’A reliable supply of water, with high quality, and at a
fair price." Objectives in support of that overall goal include:
A. That the regional water system gets rebuilt cost-effectively and that BAWSCA
monitor implementation of AB 1823 - San Francisco should safeguard the water
system against damage from earthquakes and other foreseeable hazards. BAWSCA
will monitor progress on the system repairs and on completing the requirements of the
legislation that the BAWSCA agencies supported to oblige San Francisco to repair
and rebuild the regional system.
B. That the cost of improvements is fairly allocated - San Francisco should commit to
maintaining cost-based pricing, with the costs of the wholesale water system shared
between the City and its wholesale customers based on their proportionate share.
C. That future water needs can be met - San Francisco must evaluate the ability of the
regional system to meet future supply and capacity requirements and must use the
BAWSCA agencies’ long-term water demand forecasts as the basis for regional water
demand projections.
D. That there are adequate supplies during droughts - San Francisco should arrange
back-up supplies for dry years and should "drought proof" the entire service area, not
just San Francisco itself. If rationing becomes necessary, San Francisco should use a
system that allocates available water between San Francisco and wholesale customers
in a way that (1) is fair and (2) avoids penalizing long-term conservation efforts
and/or development of alternative supplies, such as recycled water.
E. That communities prepare for potential water outages - San Francisco should
coordinate with the BAWSCA agencies to develop a crisis management plan.
F. That agencies implement cost-effective water conservation activities- San Francisco
should provide agencies enough information so that they can prepare for possible
outages, including the provision of conservation programs for their communities.
BAWSCA can act as coordinator for these programs to improve the cost-effectiveness
of agencies offering such programs.
G. That water received must meet drinking water standards - San Francisco should
continue to protect the purity of Hetch Hetchy water and commit to provide its
wholesale customers with water that meets EPA and California drinking water
standards.
H. That the Master Contract is properly implemented and a new Master Contract is in
place prior to 2009 - San Francisco should commit to maintaining cost-based pricing,
with the costs of the wholesale water system shared between the City and its
wholesale customers based on their proportionate share.
I. That there is ongoing support of efforts to protect health, safe _ty and economic well
being of the water customers and communities - BAWSCA should maintain the
support of the many allies who supported the legislative effort to ensure San Francisco
repairs, rebuilds, and maintains the regional system.
Guideline 2 - Advocate for an interconnection between SFPUC and the District: Work
with the Santa Clara Valley Water District (District) and the SFPUC to pursue the extension
of the District’s West Pipeline to an interconnection with the SFPUC Bay Division Pipelines
3&4. Continue to re-evaluate the attractiveness of a connection to an extension of the
District’s West Pipeline.
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.
Guideline 4 - Focus water DSM programs to comply with BMPs: Continue
implementation of water efficiency programs with the primary focus to achieve compliance
with the Best Management Practices (BMPs) promoted by the California Urban Water
Conservation Coalition.
Guideline 5 - Maintain emergency water conservation measures to be activated in case
of droughts: Review, retain, and prioritize CPAU’s emergency water conservation measures
that would be put into place in a drought time emergency.
Guideline 6 - Retain groundwater supply options in case of changed future conditions:
Although using groundwater on a continuous basis does not appear to be attractive at this
time, retain that option for the future if circumstances change enough that it does become an
attractive, cost-effective option. Examples of changing circumstances could be that the
amount of water available to CPAU from San Francisco for the long-term is reduced. This
could occur if regulations or legislation require additional water to be made available to the
Tuolumne River fisheries. In addition, in the future allocations or entitlements to San
Francisco may be developed. If those allocations are based on the dry year yield of the
system, allocations to all the users of the system, including CPAU, could be well below their
current and projected future needs.
Guideline 7 - Survey community to determine its preferences regarding the best water
resource portfolio: Seek feedback from all classes of water customers on the question of
whether to use groundwater during drought to improve drought year supply reliability. At
10
the same time, seek feedback on the appropriate level of water treatment for groundwater if it
were to be used in droughts. Survey all classes of water customers to determine their
preferences as to the appropriate balance between cost, quality, reliability, and environmental
impact.
RESOURCE IMPACT
The resource impact associated with implementing the proposed WIRP is unknown at this
time. Adopted budgets and long-term water financial plans assume that Palo Alto will
continue to take all of it supplies from the SFPUC. These costs are projected to increase
dramatically over the next 10-15 years. Introducing a new supplemental water supply source
could have a resource impact, but the proposed WIRP does not recommend any such action
at this time. Specific projects will be brought back to the Council as needed for approval.
POLICY IMPLICATIONS
The proposed WIRP does not represent any change to existing City policies. The plan is
consistent with the City’s 1998-2010 Comprehensive Plan’s non-growth objectives.
Specifically, the proposed plan supports the following Comprehensive Plan Policies:
Policy N-18: Protect Palo Alto’s groundwater from the adverse impacts of urban uses;
Policy N-19: Secure a reliable, long-term supply of water for Palo Alto; and
Policy N-20: Maximize the conservation and efficient use of water in new and existing
residences, businesses and industries
The proposed WIRP supports CPAU’s Strategic Plan as follows:
Strategy 2 - Preserve a supply cost advantage compared to the market price (subtasks "A.
Explore alternative supply methods and projects to control costs of electric, gas,
and water commodities to meet existing and future customer needs" and "E.
Work through partner agencies such as BAWUA, TANC and NCPA to become
a more effective voice for our mutual benefit");
Strategy 4 - Deliver products and services valued by our customers, and continue to build
CPAU brand presence (e.g in the area of water efficiency services");
Strategy 6 - Maintain stable General Fund transfers, and maintain financial strength; and
Strategy 7 - Implement programs that improve the quality of the environment.
NEXT STEPS
If the proposed WIRP Guidelines are approved, staffwill follow them in pursuing additional
and preserving existing water resources. The estimated timelines for each guideline are listed
below:
o Preserve and enhance SFPUC supplies - this is an ongoing task that can be achieved
most effectively by leveraging Palo Alto’s resources with BAWSCA, the new regional
agency.
11
2.Advocate for an interconnection between SFPUC and the District - the District is
expected to complete its additional studies by the end of 2004 when an extension of the
District’s West Pipeline to an interconnection with the SFPUC will be re-evaluated.
3.Actively participate in development of cost-effective regional recycled water plan -
staff has already begun discussions with the Palo Alto Regional Water Quality Control
Plant staff on its ongoing recycled water development. Extensions to Palo Alto end
uses will be part of the discussions.
4.Expand water DSM programs to comply with BMPs - staff is planning to propose the
implementation of additional water efficiency and conservation programs to be in line
with the Best Management Practices.
5.Maintain emergency water conservation measures to be activated in case of droughts-
an ordinance remains on the books to enact these measures upon the declaration of an
emergency such as a drought.
6.Retain groundwater supply options in case of changed future conditions - CPAU is
currently pursuing environmental documentation for the reliability improvements
recognizing that the wells may be used in the future if the Council decides.
7.Survey community to determine its preferences regarding the best water resource
portfolio - staff plans to concisely describe a narrow set of portfolio choices and poll
the UAC, City Council and customers as to their preferences. For example, the
questions will try to determine how much of a cutback in droughts is preferable to
decreased water quality or increased cost. A customer survey is planned for the fall of
2004.
After the customer survey is complete, staff will return to the UAC with recommendations on
whether groundwater should be used to supplement supplies in droughts and, if so, what type
of water treatment should be employed.
Even if consistent with the proposed WIRP Guidelines, any recommended changes to the
current water resource portfolio (e.g. an investment in recycled water) will be brought before
the UAC and City Council for approval.
PREPARED BY:Jane Ratchye, Senior Resource Planner
REVIEWED BY:
DEPARTMENT HEAD APPROVAL:
Girish Balachandran, Asst. Director Resource Mgmt
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AI-I-ACHMENI D
Water Integrated Resource Plan Guidelines
Ulrich: Thank you Mr. Chairman, congratulations. You have the guideline report. We will have
a brief presentation and we will walk through that so that Commissioner Dahlen will get a word
picture of what we are doing. I will introduce Jane Ratchye who will make the presentation.
Balachandran: Let me make some introductory remarks over here. I am Girish Balachandran
and the general structure of the analysis that Jane is going to make, we are trying to model it
similar to what we have done with LEAP and with GULP, that’s the Electric Resource Plan and
Gas Resource Plan where we provided a lot of background analysis to the UAC, and the Council
in the months and years past. We are trying to distill that into a set of guidelines for approval in
front of you today similar to what we did with LEAP and Gulp objectives we have approved and
then the actual implementation plan and specific recommendations would be brought to the UAC
and Council. So that is the general structure and our plan for the future also with the water IRP
recommendations. So with that basic outline I am going to give it to Jane.
Ratchye: Unfortunately we seem to be having some technical problems here so I am not able to
bring up my presentation for some reason. But I was able to handle the slides.
Carlson: Jane do you want the questions as you go or hold them to the end?
Ratchye: As I go would be good. That would be fine. What I’d like to go over is mostly found
in the report for your benefit Commissioner Dahlen. I am going to just touch on what reports the
UAC or ihe Council has seen today that support the conclusions that we are making today on the
water IRP. Go back over the results briefly that I showed last time I was here in this topic which
was in June and the basic conclusion and the evaluations, and the proposed guidelines that are in
this report and I sort of previewed those with you in June and then I will go over the next steps.
You have seen many reports so to support where we are today. Starting from the bottom of the
slides, you have seen many reports that are primarily driven by engineering, the reports done by
Carollo beNnning with 1999 study where they identified the capital improvement program to
respond to the need to improve reliability water distribution system. That was followed by the
2000 study we called it which looked at using the ground water for longer-term use and what
issues might come by that including what alternatives were there for treating ground water. The
2001 study looked at subjecting the water distribution system to different kinds of shortages than
in the 1999 study which focused on a 8 hour outage and it looked at a longer term shortage
including a 30 day outage which is what we think 30-60 day outage which might be what the San
Francisco PUC water might be out and other outages including longer term outages such as year
long drought and that study concluded that the CIP recommendations from the 1999 study were
indeed the best solution for many different kinds of outages. Looking back at the top we have
come to you with different updates. I didn’t report here on this slides all the different times we
have come to the UAC with updates But we began coming with it in October or in August 2002
with a preliminary assessment and that was sought of laying out all the different characteristics
or attributes of all the possible water resources alternatives.
In May of this year we showed you another report that was done by Carollo Engineers. The
ground water feasibility study that determined that we were only able to use ground water for
500 acre feet a year at most on a continued basis or up to 1500 acre feet a year during times of a
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UAC Minutes Excerpt - August 6, 2003 Page 6 of 38
drought. In June, the report referred to you earlier, which was the basic conclusions of the water
IRP analysis, and then last month you heard about the Santa Clara Valley Water District. Their
study, their conceptual study on the extension of their west pipeline to serve Palo Alto and/or
extending it even further to an interconnection with the SFPUC Bay Divisions Pipeline III and
IV. Just to review the alternatives that we looked at are obviously the water that we get from the
San Francisco Public Utility Commission, which is a 100 percent of what we get now. Using the
ground water either in droughts only as we have had in the past droughts or in a continuous basis
also we had to look at the treatment of the ground water. Looking at the Santa Clara Valley
Water District treated waterline and also looking again at recycle water which we looked at
depth in 1993 and then looking at demand side management Program that would be expanded
from what is on the books or scheduled now. And I have a graphic here Commissioner Dahlen
of our historic water consumption and then the forecasted load and also aligned at about a little
lower than 12000 acre feet a year what is about probably what we get from the SFPUC at
drought times. Our forecasted load is about 15000 acre feet a year or so and in a drought year if
we rely entirely on SFO we can look forward to cutbacks of about 3000 acre feet a year. The
next one is extremely hard to see on the overhead. I am glad every one who cares has...
Carlson: For reference purposes our allotment from SFPUC my recollection is about 18 or
19000 is it?
Ratchye: Yeah. It is 19,000.
Carlson: So we are well under that.
Ratchye: Yeah. That is correct.
Dahlen: And in drought years Jane is it dropped to 12,0007
Ratchy~: What was that?
Dahlen: Did our allotment drop during drought years?
Ratchye: Well, in the drought years the amount we get is established at least through 2009
according to the Interim Water Shortage Allocation Plan. That is the plan they calculate how
much you are going to get using three factors. One of them is our supply assurance, which is a
big number for us relative to our current forecasted load. Another third of it is how much we
actually used in a particular year and I think it was 2000-2001 just that number. So that is just a
fixed number. Then the third component is how much you used the year before the drought and
so two-thirds the ways they calculate how much you get is based on fixed numbers and one-third
based on the year right before the drought. So that is how it is calculated. So only a third of it
we get to rely on this large number - this 19000 number. So for a system wide cut back I think
we would get about 12000, which is about a 15 percent cutback for Palo Alto for a 20 percent
system wide cutback. There are many other cities obviously in BAU-WA that have to take
cutbacks of far greater than 20 percent so that we on an average take about 20 percent. Many
cities are using very near or even more supply assurance and so this interim water allocation plan
is a good thing for Palo Alto.
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UAC Minutes August 6, 2003 Page 7 of 39
Carlson: Jane that was one thing that confused me on this. On Table II, which is in our packet,
but not on your slides it shows the availability from SFPUC normal years it is about 17000 and
in drought years it was 11-8 almost a 5000 acre feet shortage. But yet in the Table III it shows
2167 acre-feet shortage and I was confused what the actual and you just mentioned that cutting
back to 15000 acre feet rather than 11-8 shown on Table II. Is that what you.. Actually in the
slide up here you show 11-8 numbers is that what you expect us to be cutback to or is it ...so the
shortage is not 2167 it is almost like 5,000.
Ratchye: No. But our load is not. Let me make a correction to something I earlier said. The
17000 number I believe that is our supply assurance.
Dawes: Okay
Dahlen: It is not 19,000
Ratchye: It is something that I have to double check. I believe that it is 17,000 we are
significantly below it. That is the number I have on my desk. But to answer your question
Commissioner Dawes our usage is around 15000 and so if you are only able to get about 12000
in a drought you have to cutback about 3000.
Dahlen: Jane while we are in Table II report I am sure you have mentioned this many times in
the meetings in the past. Could you please give me a short description of what the DSM
Program is all about?
Ratchge: Okay. Well there were mostly two DSM programs that were assumed.. The first one
was assumed in three scenarios. We looked at about 2-½ percent long-term cutback from
implementing DSM programs that are enhanced from what we do now. To meet all the current
DMPs. We do not currently meet all the DMPs. The best management practices according the
California Urban Conservation Consul. So we are assuming, as a base case we will be at least be
achieved 2 ½ percent long-term cutback. Those consisted of programs like ultra low flush toilet
programs, landscape audits for large customers, about every type of water conservation program
you can actually think of. A little bit here and a little bit there all those things. Then we also
looked at if an enhance program or fairly aggressive program to try to get 5 percent of our load
as a long term cutback and that was sort of an alternative that we looked at. Does that answer
your question?
Dahlen: Well. For that one, I understand these are basically to reach out to the Public, educate
the public or to provide programs where you can get people to cut back on their water usage. For
the projected cost of water for the enhanced DSM Program what is involved in that? Where
would the cost be coming from?
Ratchye: Okay. That cost is the entire cost what I would call from the societal prospective so
that is the cost of the measure itself whatever it is. It is burying an ultra low cost toilet. The
actual measure installing the program and everything. That does not mean that the Utilities
Department would incur all of those costs but they are costs to the community. So that is how
they were calculated. So as you see that Table II in that report the costs is quite large relative to
the other water supply. It is more likely that Utilities would pay for some fraction of that and not
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UAC Minutes August 6, 2003 Page 8 of 39
the entire thing. For example we would offer some rebate that would be a partial payment for
the measure or we would administer an audit program and then the customer would incur the
cost to install for whatever measures were recommended if it made sense from the customer
perspective. Those cost there are the entire costs and they are not attributed to a particular party
who would pay whether it is the utility or the participant.
Dahlen: Thank you. That clarified my question.
Ratchye: We are looking at some DSM programs and tried to come up with how much the
utility should pay or need to pay to illicit a response and what would be the impact on both
participants and non-participants but we are not there as yet. Right now just for this water IRP
we are looking at the total societal cost. In Table II and also I think Table III in the report those
numbers looks quite high for DSM Programs and that is why.
Dawes: Excuse me Jane. Could I ask another question on Table II? Did the projected cost of
water include the capital required to implement them? I am assuming on what you said on the
DSM that a count a toilet as a capital goods it would count that. But what for example on the
Santa Clara Valley Water District the 467dollars and the 760 dollars for acre foot I am assuming
that does not include any capital or if it does. Those are the projected rates. Those are directly
from the Santa Clara Valley Water District itself and certainly they are those increases in the
future are primarily due to capital expenditures that they expect to incur, comply with new water
quality standards and implement other programs that they are doing to increase their reliability of
their whole system and maintain an upgrade of the system that they do have. So I am not sure
how to answer your question. Those are their projected rates. Their projected rates are based on
large future capital expenditures. But they are not expenditures but capital cost we would incur
directly. But if we are connected to that line we would be paying the rates that they expect to see
that it included those costs.
When we discussed this before. When they came back with 50-60 million dollars a total program
then our share - we were estimating our share to be fairly high. Then we looked at the potential
and it ended at looking at another plan and scaled those back but those dollars that was trying to
get at. These would be the rates we would pay but we would still have some millions of dollars
to even be able to pay these rates. Is that correct?
Ratchye: Right. Let me explain that again because that is unusual.
Dawes: Actually I thought that was take or pay basis. In order words these rates that we pay
obligated to take a certain number of acre-feet, which amounts to the 29 million dollars over 10
or 20 years whatever the number is. It is a contingent liability based on volume consumed. If
we didn’t take those acre-feet we would pay substantially more because we would have a
shortfall on our volume.
Ratchye: That is exactly right. The way this works is they will build the pipeline. Let us say
Palo Alto was going to connect to it and the numbers are all over the place. But we have seen a
number just to connect to us for about 15 million dollars. They would look at the current rate
and establish a mortgage payment essentially on the 15 million dollars and they finance that over
20 - 30 years and come up with an annual payment and divide it by their current rate and say hey
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UAC Minutes August 6, 2003 Page 9 of 39
guess what you now have to pay for whatever that number turned out to be maybe 15 acre feet a
year just like Commissioner Dawes on a take or pay basis. And that they estimate the payback
capital cost on the pipeline and so we just end up paying whatever the retail rate is but we would
have take or pay pick commitment. And in their contracts there are flexibility around that but I
believe you will have to take about 90 percent of the amount. You can elect each year you say
how much you are going to schedule. But you cannot schedule lower than 90 percent or
something like that of the volume when you signed the contract.
Bechtel: I guess what I am concerned about is if you look at Table II isolated from this report
and the discussion we just had it clearly says that Water District water is cheaper than SFPUC
water and in the current years, the near term years and in the out years yet I am not sure that is
really going to be the case. We have a contract that is desirable and we hope that somehow when
you are displaying this it is the caviar to go with that are important. Also pointed out. Excuse
me.
Ratchye: Well. In fact that is true. If the projections that the SFPUC has set out about their
future cost comes true and that the Valley Water District their projections for their costs for
water came true. It would be cheaper to go that way. The question is we want to trade of the
water quality for that. I guess that is the question for the community. The other part that is not
included in Table II and not included in the analysis but I see coming down the line from San
Francisco is some sort of take or pay commitment from San Francisco. Right now we just pay
basically almost entirely a volumetric base chart and so we are lucky. Someone just brought
down from my desk the number for supply assurance. It is a little more than 19000 acre-feet a
year. So if we were to have to pay for our water based on our supply assurance of around 19000
and only use 15000 I do not know what we would do. Maybe we want to sell it or we might
want to save it. I am not sure. We are faced with that decision right now. But I see that coming
down the line and if we are ever faced with that decision about how much we want to sign up for
and what we want to pay and actually get in a real allocation not like this supply assurance that
we currently had but a real some sort of an entitlement to their system, we want to think really
hard how much we want o sign up. Because then I would think we would have a demand
charged component. Take or pay whatever you call that a fixed cost. This analysis does not
assume that that’s going to happen during the analysis period. It just assumes that whatever we
pay either their average rate cost based rate as we do now. So it is little more complicated. It is
hard to collapse into that table but you are right you think.., let us go with district waterline.
You just have to...
Bechtel: You actually go with wells.
Ratchye: The wells number though does not include the treatment cost, which we could, chose
not to treat it.
Dahlen: Jane can you give us an idea of how that treatment cost might impact some of these
numbers here if possible. Double them?
Ratchye: If you look at the next...
Dahlen: I see that.
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UAC Minutes August 6, 2003 Page 10 of 39
Ratchye: If you turn to Table III in the report which is on your slide number 6 here. These
numbers are also probably worthy of some additional explanation because it is hard to conclude
things just by casual look at this table. If you look right away. Using the groundwater during
droughts and you are saying that if you don’t treat the water you pay 4.4 million dollars the cost
there is largely because you are buying water in a drought rather than not buying water. If that
makes sense. The first line assumes you are only going to use San Francisco water and in a
drought you will be cut back and it in a drought it is also assumed the cost for San.Francisco
goes even above and beyond what their projected rates are. They increase by about 20-40
percent. That is’ because they need their same revenue requirement in a drought even though
they are selling only 75-80 percent of their water. They have the same almost entirely the same
fixed cost and they need to recover that some amount.
Dawes: Jane, in another words, is that the drought premium? That 4 million dollars is a drought
premium? Is that what you are talking about?
Ratchye: Here is a couple of what this calculation is. The model looked at a Load and Resource
Balance, of dispatching all these resources whatever I had in the portfolio there over time in two
different types of years a normal year and a draft year. So it calculated the cost if the year was a
normal year. and it said this is your cost. Then it assumed what is the draft year and then your
availability of San Francisco and your availability of treated water and things like that were
limited during a drought although you were able to get 1500 acre feet a year of well water if you
had that in your particular portfolio you were evaluating so in a drought if you look at the two
different scenarios of just relying on San Francisco versus plus San Francisco using the wells
then it is actually costing you more because you are buying water. Because you are not having
to live with the cutback that you would have only San Francisco water. You would have to cut
back as shown on Table III 14 percent. If you are using ground water you are using 1500 acre
feet so you are only cutting back 5 percent so that 10 percent you are getting from the wells you
have actually to pay for it via the pump tax so that the groundwater extraction fee to the Santa
Clara Valley Water District. So it is costing you more but you get more water. And so it is kind
of not a total apples types comparison. In one case you are living with big cutback and in the
other case you are living with a shorter cutback. It is costing you more money. The no water
treatment alternative does not cost very much. Because you have already put these wells in
presumably. They are sitting there. This is an existing well, so you are already going to pay for
the rehabilitation presumably if we go forward with the capital improvement program. So you
are ready to go. So the incremental capital cost is virtually nothing to operate this well during a
drought if you don’t put any treatment on it. So this 4.4 million is somewhat deceiving. I think
in the last report I gave you in June I showed you a draft.
But what is more interesting to look at in Table III I think is the incremental cost of treatment in
this case to your question Commissioner Dawes if you have no treatment you could essentially
say zero cost.. If you treat for manganese and iron the next line down you are paying another
million 1.1million. Do you see that?
Dahlen: Okay yeah.
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Ratchye: And so if you blend you are paying another 1 V2 million. And that if you put reverse
Osmos on you are paying about 5 V2 million more just for the treatment. This chart is trying to
get at the question this community is saving. The questions of cost, quality and reliability.
Essentially how much cutback are you going to take in a drought?
Dawes: Jane could you explain the third item down. Blend with SFPUC water to meet all
standards. My recollection was you had to put new pipes in to mix the well water with the
SFPUC water but the thing I don’t understand is to meet all standards. What does that mean?
You mean that the other wells don’t meet all the standards. I thought with these initial
treatments in fact they did meet the standards.
Ratchye: Yeah. They were with all of these treatment options. But you can blend San Francisco
water to get to whatever quality you want right? You could put in one drop of well water and
you can essentially be it San Francisco water quality. You could blend the tiniest fraction you
can of San Francisco water into it just to meet the standards.
Dawes: So that essentially a capital cost those 6 million dollars because I assume once you put
the pipes in the blending system is all set up. There is no incremental cost per say.
Ratchve: That is true. It is the capital cost. But let me talk to you again that it is not six million.
It is about million point six. It is the difference between having to buy the water at the pump tax
versus it is not getting any water.
Dawes: That’s right. Is there an option which says we pump the water which is going to cost us
4.4 for the pump tax that is our incremental cost for the 1500 acre feet then if we simply blended
that the capital cost be no incremental operating cost does that capital cost is the difference
between 44 and 60 or between 55 and 60?
Ratchye: It is 44 and 60.
Dawes: So it does not assume that we treat for manganese and iron.
Ratchye: No. It does end up meeting the manganese and iron standards. But it is through
blending and not treating at the well.
Dawes: The manganese and iron that supports to be capital and operating cost because of
chemicals and filters and other stuff that we have to
Ratchye: Yes.
Dawes: Thanks.
Ratchye: Then the reverse osmoses the big component is the capital but there are also operating
cost associated with that.
Dahlen: And that would assume that you are not blending it.
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UAC Minutes August 6, 2003 Page 12 of 39
Ratchye: That is right. There is Carollo I believe in the 2001 study did look at blending it to a
greater degree than to just meet the standards and that was quite expensive and it didn’t use so
much well water. It used so much relatively so much Hetch Hetchy water to well water that it
would only use about 500 acre feet at a particular well and the rest would be San Francisco water
and so if you want to get your full availability, safe availability of ground water in a drought you
would have to put that type of right treatment on three wells then it became more expensive than
doing Osmoses to get your 1500 acre feet and putting the treatment only in one well. So that was
not the best option to get 1500 treated to a very high water quality. That is why I didn’t put that
one in.
Dahlen: Jane, if I can ask one last question in Table II. We are talking about blended water.
This question deals with the Santa Clara Valley water district treated waterline. There would we
be looking at blending with the SFPUC water?
Ratchye: If we were really really going to do this. The engineering group will have to look at
this very closely. Because it is different water quality and many cities that do take both
segregate their distribution system so they don’t mix the water and you end of with different
kinds of problems. So I didn’t look into that. I don’t know that we can just take it directly and
use it.
Dahlen: The reason I asked that question because you mentioned we have to take a large amount
based on the contracting and it is not something that is turned on during the drought years but
something that we would have constant annual usage that we would have to pull from that line.
Is that correct?
Ratchye: We don’t have to. We just have to pay for it.
Dahlen: We could conceivably pay the cost for tapping that line and use it only during drought
years.
Ulrich: I think it is important to make sure that when we consider this word blending when we
talk about it. These cost do not include blending in such a way that it would uniformly blend the
water throughout the city. If you take the water from a pipeline or from the well the customers
that are closest to these locations are going to get a different quality of water than those that are
elsewhere. So if you want to have everybody same equal blending you will have to consider a
significantly different distribution system that would allow for that to take place. So the current
plan for the emergency water is one where you are going to start pumping the water and putting
it into the reservoirs and then distribute it as you can and there is no consideration for blending in
a way that everybody would be equal. That is a far different situation in an emergency than it
might be considered for other usage.
Dawes: The chlormine situation is not had issue whatever the options here we would have water
that was treated similarly to the new regime of SFPUC.
Ulrich: It is going to change a lot of our operations practices but you are correct that once the
chlormine conversion program is complete later this year additional changes in pumps and in
some of the reservoirs flow which is all part of this CIP which was approved by the Council the
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UAC Minutes August 6, 2003 Page 13 of 39
other night then we would have the conversion take place and everybody would be getting
chlormine rather than chlorine in their water.
Dawes: So the wells will have the chlormine injection system in effect.
Ulrich: Initial emergency water plan would not.
Dawes: Would be untreated in terms of disinfectant.
Ulrich: No. You would be able to do that on a limited basis. But it would not be a full
operational you would have to bring in those facilities to do it.
Dawes: I am a little confused. We are spending a lot of money on wells; we are going to use
them in droughts presumable.
Ulrich: No. The plan we are talking about is emergency water only. Not drought water. I do
not want to get these two things confused.
Dawes: In emergency it is okay to have treated water?
Ulrich: That is correct. If at some later time through the analysis of how much water we could
use and how we would do it in a drought situation if ever it comes to pass we would put in more
permanent facilities depending upon what kind of a treatment you would want to do.
Dawes: Let me add something. As I understand ~ound water is basically safe so you don’t
have to disinfect it. But the quality issue that you were talking about tile treatment is the taste
issue that you would want to use for a longer term. I am getting head nods.
Ulrich: We do not have verbal communication particularly for Ms. Dahlen’s purpose. But that is
correct. Plenty of people have wells serve their homes and others that if they don’t put the
chlorine into their water before they drink it. But any of our plans for emergency water or
otherwise would include whatever is appropriate to have safe water deliver to their homes. The
issue that I just want to make sure you were aware of this when we are talking about is this
blending whether it is emergency or otherwise would not give us the quality of water to every
resident in Palo Alto.
Carlson: You need two completely parallel distribution systems to do that?
Ulrich: Not necessarily. You ought to have large enough storage where you could move all the
water into the storage, mix it and then blend it and move it out. I do not know what all that
would cost.
Carlson: Too much.
Ulrich: I just want to point out these analysis; the dollars we are talking about would include
those.
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UAC Minutes August 6, 2003 Page 14 of 39
Carlson: Okay.
Dahlen: John just this one last question. When you talked about this emergency water needs
versus the drought years, I thought this analysis was looking at drought years. Could you clarify
the different type?
Ulrich: Yes. That is correct and I apologize for mixing that with the emergency water plan that
we have been working on sometime in the CIP’s and environmental analysis being done is just _
for emergency water. And what Jane is talking about is the drought analysis.
Dahlen: Okay. Thanks.
Rosenbaum: Do we have any other questions for Jane? Dick.
Carlson: Yes. I have one question since we were on it for a while and it is this long-term issue.
Because to do the improvements at the SFPU their capital improvement plan inevitably must
require either to take a pay contracts to finance the bond issue or are borrowing money through
BAUWA and guaranteeing a payment stream. One way or the other we have to put some
guarantees out there to borrow our share of million plus dollars correct?
Ratchye: No. That is yet to be seen. But it is certainly the occasion that we have to put up
money that we could ask for something like that. I do not know whether Mr. Beecham wants to
comment on that. I think this is not decided yet and we are not still not near the funding the first
part of the capital improvements.
Carlson: But we have to do something like that to finance those funds. Bern have you got any
plan?
Beecham: At the BAWSCA - Bay Area Water Supply and Conservation Agency - we have had
some initial meetings. I am on the main policy committee of that group. In my opinion it is
likely we need to discuss those kinds of options. But the agency to this point has not had any
substantial discussions on it. But certainly looking forward to the issue. If San Francisco and~or
the Bay Area but San Francisco is a mass agent puts in several million dollars to upgrade a
system there has to be a guarantee way for covering that cost and I expect that they and we will
look at. take a pay contracts. But we have had no real discussion on that.
Ratchye: BAWSCA does have a financial consultant who is looking into all the options there.
But we are just not ready with any conclusion. I think bondholders may want something like
that.
Rosenbaum: Dexter.
Dawes: I have thought the purpose of this integrated water plan was to look at obviously in the
study stage that we were going to use the PUC water and the cost was going to go up and
absolute drought that we would do what we have done for the last twenty years or so. Basically
in my mind this study is primarily at the drought situation and some emergency situation. We
are spending a lot of money on our wells to rehabilitate them. As I look through the alternatives
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UAC Minutes August 6, 2003 Page 15 of 39
and guidelines nothing is mentioned about using the wells in drought even though there is a great
deal of analysis put on them under the examination of resource alternatives Item I using ground
water during droughts only goes on and talks about using ground water in droughts but it does
not say that that alternative is rejected but as you look at the guidelines I mean there is nothing
that says about ground water. So apparently that alternative is rejected and to me it looks like a
fairly attractive fmancial alternative. We spend the money, it is here, it is local we do not have to
depend on anybody else. It is something under our control. We just turn the valves, and press that
and we have got water and I am a little confused as to why this alternative has been rejected
because it is not explained here.
Ratchye: It wasn’t rejected but it wasn’t made recommendation either. For that particular one
and I agree with you that is the key thing. Everything else is easy. Most of the guidelines that
you see here are really non controversial.
Dawes: There are seven of them and it touches almost every other item that you have looked at.
Ratchye: I agree with you Commissioner Dawes. I think it has neither been decided that it is a
good thing or bad thing. We sort of wanting to defer that to get some reaction from the
community and that is the biggest conclusion of this and I think that we have tried in the past to
get customer opinion about how much they value water quality versus availability in a drought
things like that. I think you can ask a better question when you have numbers behind it and I
don’t know if you want to jump to that. Let me go through the rest of this and I think we will get
to your question that is indeed a vital and a key one. But I think that particular question has not -
there has been no decision to never use the drought or to use the wells in a drought. But that is
such a big decision that we need more information from the public, from the UAC and the
Council.
Dawes: I thought that that was what we were doing. I mean the purpose of planning is to set
forth a plan of action in the event that you need to do it and essentially it looks like we are
punting this deal you know that a drought say starting next year we don’t have a plan because we
don’t know what we are doing with the wells. It seems to me that it should be top of our list to
decide are we going to turn on the wells, are we going to spend some more money on treatment
so that we can turn on and spend some more money on connecting it up to blending it with PUC
but this does not answer the question of what is the plan.
Ratchye: Right.
Ulrich: We agree with what you are saying. We are taking step by step. It is important that we
move ahead with the urgency water plan and the way to do that is to put of the decision that the
drought plan until we have done more evaluation particularly the impact review. So when we
made a recommendation whether to use the well or otherwise we would have backup
information, we would be able to say the impact of that.
Dawes: We now have that. The last Caro!lo study we dug into that so we know.
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UAC Minutes August 6, 2003 Page 16 of 39
Ulrich: We really don’t and we have been asked to do a more thorough closer, those are my
words, but a more thorough environmental impact review and the City Council approve
expenditure of money to do that evaluation. That was just approved the other night.
Carlson: So let me get this right. The CIP for well improvement is then deferred too much in
order to do additional environmental impact study.
Ulrich: That is correct. The budget recommendation that we made and you approved in our
budget calls for taking those steps. But this City Council did not approve the CIP in their budget
so we went back to them to do environmental work so that we can then come back with that
information for approval in that CIP.
Dawes: That is news to me. I was not aware of that and my assumption was that the study was
in a fact an environmental impact of running the wells continuously or inadvertently and I am
taking it back.
Beecham: If I could add a little of the council background on this The CIP involved Stanford
land because of the Palo Alto Park because Stanford land is being involved two of the council
members could not participate Council member Mayor Mossar and Council Member Kleinberg
that left the council with 7 members to make a decision on this. The CIP is a budget item.
Budget item requires 5 votes regardless of how many people are able to participate. The vote, I
believe, was 2 to 3. Three members opposing, as I recall council members are Lytle, Freeland
and Kishimoto.
Dawes: My understanding is that vote was with respect to digging up E1 Camino Park not
whether or not to proceed with rehabilitating the wells. Am I mistaken?
Ulrich: I don’t want to complicate it. Commissioner Beecham gave you the result of the vote the
way we had set up the project plan the city council had earlier approved the overall emergency
water plan and then as we put together the capital improvement projects the first one is the one
we are talking about included detailed engineering and design of the new reservoirs including the
one on E1 Camino. But when the council members voted for the CIP it failed because there was
not enough votes for the CIP project as it was defined so we felt that the way to satisfy that
concern was to go back and modify our current contract with Carollo to include much more
environmental work, reduce the capital or the design and capital improvement to a later date until
the environmental report was done and that is what the council approved the other night.
Dawes: I am not still clear in my mind the environmental issue was only the part digging up the
park and the use of the wells or only use of the wells.
Ulric___~h: I think it was all of those to some extent. Let me try this again. Included because the
budget item called for land acquisition, called for detail design, I believe it was felt that we were
making decisions and putting our money behind it to actually physically do those. The concern
is that there was not enough environmental review included in the CK’ to be able to satisfy the
concern whether these were the appropriate place to do it. So in order to be able to move forward
logical to me I think it was let us do the environmental work and then we have the basis to come
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UAC Minutes August 6, 2003 Page 17 of 39
back to the council. That allows us to continue with the time sensitive work on the chlormine and
some additional study work that will ultimately help us get these projects completed.
Dawes: And the environmental work was both on well rehabilitation and digging up the park?
You just say environmental work. I want to know what environmental work it was.
Ulrich: Sorry. I am not trying to be evasive. I am saying let me take this step at a time. You do
not want to make a commitment to suck water out of the ground and you don’t want to make a
commitment where those reservoirs are going to go and start spending money unless (1) you are
going to know you want to pump water and how much and where so that you can have a
integrated design. So when I say environmental work it is the whole analysis of all of the
reservoir sites and the locations for the plans for the well and you recall there is a whole list of
priority locations and while we come to the conclusion we think there is one, two and three
priorities we are going to go back and do the environmental.
Dawes: Just a little sensitive. I thought that the environmental work on the wells had been done.
It sounds as though the council thinks that wasn’t done and what I am complexed about.
Ulrich: I think we all have an objective of finding fight locations and doing the right work to be
able to establish where those wells would go and get the reservoirs in. We have the emergency
water and the fire protection in our plans so we are working towards that. I hope I answered your
questions about the process.
Dawes: I think you did totally.
Carlson: Can I ask another part of that? What makes me nervous here is if you had to do this
environmental work anyways that is fine but we are really at risk in a major earthquake and is the
availability of water in an, emergency being held up for a significant time? Or just doing the
paper work you had to do anyway before you started picking dirt?
Ulrich: Well you are asking the questions that we said we are staying away tonight thinking
about.
Carlson: Amen
Ulrich: When you talk emergency what it means it is water to take care of the deficiencies we
believe that we have in our distribution system. As you recall you got the study going back in
1999 and recommendation from the DHS have eight hours of emergency of water supply. Well
there are sections of the city that don’t have that. When you put these multiple contingencies
together fighting a fire on the hottest day of the year and a high demand for water. So that is
what led to the final report. I think we are probably behind in schedule because of this change
but ultimately you are going to think ahead that you want to come back sometime after we finish
the water study that we are going to use the same wells, storage to take care of drought as part of
the plan could be one of the alternatives. Let us go ahead and do the environmental work and
then you wont have to go back and repeat it later on. So I guess you could consider this as slow
down but ultimately all of it comes out right.
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UAC Minutes August 6, 2003 Page 18 of 39
Beecham: I would suggest that the staff is working in the best possible way to find a way to
present proposals and information to the council to that required by high votes on a project.
What has been presented to the CIPs that you saw did not go into the high votes?
Carlson: What I am thinking about having seen these situations is that the first thing is the
second thing is after emergency is pointing fingers at who delayed the natures that would have
avoided some of the cost of emergency. I sure hope people are thinking about it.
Rosenbaum: Do you have more to present?
Ratchye: I do. Let me just quickly go through the conclusions of the water IRP and that is sort of
what Commissioner Dawes said. We would like to continue to just rely on San Francisco
supplies, which are adequate during normal years. We don’t recommend to the Santa Clara
Valley Water District waterline. We don’t recommend using ground water time basis. One
conclusion we can draw now is San Francisco rates are planning to be increased automatically,
that recycled water is looking attractive for the first time I should say. The other thing gets to us
is what Commissioner Dawes said too is that the decision to use ground water possibly in a
drought is a big one for the community and the community needs to be uphold or be brought into
that decision making process. So those are the main conclusions here. Since it is a change or
would be an additional thing. We need to make sure what people want to do. So let me go over
the guidelines quickly. They are new reports the things we are asking you to approve tonight
Hopefully they are not controversial. Maybe they are not extensive, as you would like to see
Commissioner Dawes.
The first one is preserve and enhance the San Francisco supplies. That is basically working with
BASCA and trying to make sure that they are going to complete their capital improvements to
increase their overall reliability for the region. We would like Santa Clara Valley Water District
to make secondary connection with San Franciscan near Palo Alto and the Bay Division
Pipelines that is also our reliability and without making a direct connection make that water
available in an emergency. To see that we want to actively participate in the guideline number 3
in the development of cost-effective regional water plan and we are talking pretty closely with
our regional water quality control plant going forward with Phase 1 of a project down to
Mountain View at the current time. The 4th is to expand the DSM programs to ensure that they
comply with the DMPs.and this is the 2 ½ percent goal. Number 5 is to maintain the emergency
water conservation measures that would be activated in case of a drought. This is something that
is already on the books. The 6th one gets a little bit of what you were talking about Commissioner
Dawes. Retain the ground water supply options in case of change of future conditions and I
think that is the fundamental reason of going through this fundamental review now on the wells
that we currently plan to use for emergency only.
Dawes: I would like us to consider changing our guideline number 6 to actively use ground
water supply in case of a drought rather than facilitating and being wishy-washy. We should go
on record and plan for that. Frankly, the idea of asking the public what they want. The public is
going to respond we want the highest quality water at the current price or lower and that is the
answer I can tell you what it is going to be right now. It seems to me that the policy makers have
to be the ones to decide how close to that can we come. I think the idea that the 20 percent
drought rule back by SFPUC if we could stay away clear to recover half of that in extra supplies
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UAC Minutes August 6, 2003 Page 19 of 39
in wells and the other add through conservation measures, DSM, recycle water and so forth
which I would come under classification. Basically you are splitting the pain between
conservation measures and additional supplies and as I say it is coming upon the policy makers
starting with the UAC and floating up to the various levels of policy making to create a plan that
includes the use of this ground water and my belief is that there should be some minimal capital
put in to treating that water either through blending or manganese and iron and get on with it.
Ratchye: Well just as a response to that. I think that we do need to come up with some kind of
recommendation but I think staff proposal at this time we defer that until we do some sort of
outreach to the council possibly and to the community to find out about their preferences. The
drop could be done next year. Well it won’t be next year as you can see in the Water Quality
Quarterly Report. But I agree we do need to answer that questions we cant leave these
guidelines so vague about that major decision. We do need to make a decision. No we are not
going to use it or certainly not going to use it. It is a punch. It is not a punch very far from now.
Dawes: Last drought we ended up using some ground water after a struggle and it seems to me
we should have the struggle before the drought comes rather than plough in the drought.
Ratchye: I agree with you. I think we should have this struggle before but I don’t think we had
the struggle yet and I don’t think we are ready yet to make that decision. I mean you can propose
what you want tonight but the staff proposal at this time is to look at this again and bring
something back to you and add that is a major part. I think you identified this.
Dawes: Is staff prepared to make a date to revisit this? In other words there will be a
recommendation by the summer of 04 to use ground water in times of drought.
Ratchye: We are saying vaguely in winter.
Dawes: Winter of 03 or 04?
Ratchye: Winter of 03
Dawes: So six months.
Ratchye: Sooner the better.
Dawes: That suits me just fine. Thank you Jane.
Ulrich: I bet you like that Time Table.
Ratchye: Do you have a question Commissioner Dahlen?
Dahlen: I did. When you read the report it sort of looks like we are going a little bit from
ground water to recycle water. Now are these comparables? Are these comparing apples to
apples where would be putting recycled water into public use would be the same as ground water
or are they different?
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UAC Minutes August 6, 2003 Page 20 of 39
Ratchye: I think that is a very good question. Unfortunately we wont be ready to act on recycled
water as soon as winter but it certainly addresses the cut back in the drought question very well.
To me recycled water looks like a good alternative. I have a chart here unfortunately
Commissioner Dahlen you are not able to see it on my slide number 9 that shows. Essentially the
different options that we are facing and hopefully we wouldn’t have a survey question like Do
you like quality water? Or do you like low prices? Answer those questions. But if you were to
propose questions that had numbers beside it you get a better action. If you told people you
could either rely on Hetchy supplies alone and if you did that you would have the best water
quality and you would be subjective to about 15 percent cut back. The next alternative is to use
ground water and then your cut back would be only 5 percent and you could either pay either
about 3.50 cents a year, 10 dollars a year depending on what sort of treatment level you want to
pay for or you could do recycled water and that gets to a drought time cut back to 6 percent and
that would also have the best water quality for portable water usage for you would be still getting
100 percent San Francisco water and that cost is less than 5.50 cents per resident and the number
there is not a good number because it is complicated because some of it would be paid by sewer
rate payers as water rate payers. So if we split somehow between water and sewer and the other
person who would pay for it would be federal and the state governments through grants that are
available for this type of projects. And so that alternative we don’t have, that is not characterized
as well as the other ones in the water RFP right now. So that merits in my opinion a lot of more
work, a lot more looking and that may tell you No we probably don’t want to put in expensive
treatment at the wells yet because we may want to go the other way, go recycled water instead.
So the next step the final slide I have shown the time that I was talking about which said this Fall
we will survey customers and I will try to develop a good enough survey to actually get answers
that we can use and I think we need to make presentation maybe a workshop to the council to get
their reaction on this too. And hopefully come back and complete these guidelines to have some
sort of definitive statement on how to use or whether to use ground water.
Rosenbaum: Dexter.
Dawes: The numbers shown in Table III under level three project for the Recycled Water the
same set of numbers that you had in the next last slide which is the 200 percent dollars a year
equates to 100 hundred thousand dollars.
Ratchye: Yes.
Dawes: Thanks.
Rosenbaum: George
Bechtel: Jane on the survey basically first let me say the summary. Thank you for putting this
together. I think there is lot of issues that we have to look at and I guess I am of the opinion that
at least we wish that we don’t have a drought in the next year or two because I think some of
these issues are going to take a while to work out particularly convincing three members of the
council that we are doing the right thing with our water CI~ and so on but we probably wont
have a drought and work out these issues. I think the CIPs we worked on over the last three
years addresses almost everything. It does not address recycled water because I know we didn’t
do that and that is something that has come up most r.ecently but maybe my concern now is the
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UAC Minutes August 6, 2003 Page 21 of 39
survey. I think that Dexter talked about earlier and we have to frame it well as you said. What
kind of water do you want? We have to put this survey in a way and ask the right question and
we get the right information. We tried to do that with Fiber to the Home and it worked out. They
had to do two surveys in that case and more. On this one I am not sure that people will
understand that the Hetch Hetchy Water is going to grow automatically over the next twenty
years. And when you look at the survey you have for example ground water 3.50 cents increase
I think people should understand that are basis is going to increase automatically. I am not sure
whether these additions for ground water and all that are on the top of the base or some of the
stuff that SFPUC is going to do or we are going to do will take some of those numbers down. I
think we need to frame it in such a way that people in town know that the water is going to cost
us lot more every year from here on and that should be part of our survey. Let people know that
do some education so that they don’t get surprised when they look at their bill and so if you
could put something like that in the survey I would be a lot happier so we can begin our
educational process. I think this is a guideline and I think the guidelines need to be reviewed.
Maybe they will be reviewed every year. I think we are putting this to the council. I am
prepared to go ahead and recommend approval of all the guidelines after some more discussion
tonight.
Rosenbaum: Are there any questions for Jane?
Dawes: Let me just make one comment with you. Mr. Carlson mentioned the possibility that San
Francisco is likely or may well want to go to take or pay contracts in order to finance the bond
and I strongly suspect that would be the case and that our water from Hetch Hetchy would have a
fixed component or a variable component and that when you look at your Table II where it says
water from the SFPUC at 1100 dollars what I would call the marginal cost to the variable cost
might be half left. Half of the 1100 dollars might be to pay the debts service where upon all the
comparisons change completely. That is if recycled water cost a 1000 dollars acre a foot then
you have to compare that to the 500 dollar variable cost Hetch Hetchy and it no longer looks
attractive. I guess I got a little nervous when you talked about the attractiveness of the recycled
water and there is no discussion in the report about this possibility fixed and variable cost for
Hetch Hetchy water. Do you have any comment on all that?
Ratchye: I agree with you and I did not include it on purpose. Because I think if you go to some
sort of take or pay that we have to have an entitlement or some sort of a guarantee but some sort
of assurance number where we get some access to particular amount of water unlike now and in
addition that would be tradable and so if we really did do recycled water we could sell that
allocation to someone else and in reality the average cost would be a 1000 dollars or the 1100
dollars in that chart. It is a big decision that would face us. I believe we could get to that same
cost if we made another commitment to some other capital project that recycled water we would
like to couple that with selling of and getting some relief from take or pay or the fixed cost
component.
Dawes: I am not sure that we ever want some relief from getting some water from Hetch Hetchy
water as we can get..
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UAC Minutes August 6, 2003 Page 22 of 39
Rosenbaum: All right. If there are no other comments or questions. I think we are ready for
motion and I will have some language to add to the staff recommendation to speak to the
decision. Any further comments or do we have a motion?
Bechtel: I am prepared to recommend that as long as with along with the recommendation that
the staffhas made on Page 1 of the agenda item II is we advise the council to approve the 2002-
2003 Integrated Water Resource guidelines to be used as direction to staff for pursuing new
water supplies and protecting existing supplies.
Rosenbaum: We have a motion?
Dawes: I will second it.
Motion by Bechtel and second by Carlson. Any further discussion. Dexter.
Dawes: I would like to amplify the motion to incorporate the language staff has included in the
next steps so that it becomes a part of our recommendation that it seem to me that the previous
discussion is disclosed and this is only a partial step. I almost called it a draft report because the
most important part to me is missing so I would consent to Commissioner Bechtel to add to his
motion that the Integrated Resource Plan guidelines will be reviewed during the ensuing fiscal
year 2003-04 to incorporate the policy with respect to the use of ground water during droughts.
Side step the issue of surveys but incorporates the end results of the surveys is to have a policy
back to the ground water use.
Ulrich: Let me clarify. Are you including the results of the EIR?
Dawes: To the extent that the EIR impacts the ability to use well water during droughts and
certainly we are not able to recondition the well till the EIR is completed. It is my understanding
from the last discussion separate from the reservoir issue. The Reservoir issue is emergency that
is the way my mind calibrates it. The wells are emergencies well as some of these used during
droughts. So yes I would include it in the completion of the EIR, which I assume is in the same
timeframe during the next 12 months.
Rosenbaum: Is that motion clear to staff?.
Ulrich: I think so.
Rosenbaum: Commissioner Bechtel? Commissioner Carlson Will you accept that?
Bechtel: I will accept it. Let me put this on the table that may be as guideline. May be to capture
what Dexter was trying to say is. We review the guidelines again at a specific date. Six says
retain ground water supply option. For example that is included but what is not included in the
g-uidelines is the other point you mentioned Dexter is we want to talk about this again six months
or year perhaps we may ought to add that definitely these guidelines need to be reviewed every
year and then we know they will come back to us and look at it in a year.
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UAC Minutes August 6, 2003 Page 23 of 39
Dawes: I was just trying to foreclose the issue of punting again in six months. If you do it once
you can do it twice. So I am trying to put it a little more definitive so it will be acceptable to the
makers of the motion.
Bechtel: It is acceptable to me.
Carlson: Fine. I think we should review before the end of the fiscal year. Sure we should be
able to do it by then.
Beecham: I believe that the staff indicated they would come back in the winter with the plan for
the wells is that correct? And if that is the primary intent of the UAC to get the wells their
decisions made on the wells I expect that to have it on your table in a couple of months.
Rosenbaum: I would like to add some language so this is not a guideline but a statement that
would read as follows: With the proviso that when determining the economic feasibility of
alternative water sources relative to SFPUC water, consideration will be given to the possibility
that SFPUC water may have a fixed cost component independent of usage.
Beecham: Would you consider adding to that all analysis should contain assessments of present
value based on any kind of a probability of drought year for the next twenty years?
Ratchye: That is actually included in the analysis now.
Rosenbaum: So the question is whether this language is an additional proviso is acceptable to
the maker and the secondary.
Dawes: This is a pointer. Are you going to edit to the guideline for example 1A for example or
something like that?
Rosenbaum: No this is just a statement after the guidelines to overcome what I regard as a
shortcoming in the report where this factor was not mentioned. The comparisons don’t indicate
that there might be some difficulty because of the fixed cost component.
Bechtel: That is acceptable to me.
Rosenbaum: I have the language written out here.
Ulrich: We can take it from the minutes.
Rosenbaum: That is fine. We can take it from the minutes. Is the staff recommendation plus an
amendment by Commissioner Dawes, which has been accepted asking that the staff come back
within a short time with some recommendation with respect to the ground water in drought and
than the provision, which I suggested. Any further questions or comments? All right let us vote.
All in favor.
Aye, Aye, Aye.
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UAC Minutes August 6, 2003 Page 24 of 39
Rosenbaum: I believe Elizabeth you voted Aye. So that passes unanimously.
Jane. This has been a great deal of work on your part and of the staff.
Ulrich: Thank you commissioner.
And thank you
- APPROVED -
UAC Minutes August 6, 2003 Page 25 of 39