HomeMy WebLinkAboutStaff Report 2512-5656CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, June 08, 2026
Council Chambers & Hybrid
5:30 PM
Agenda Item
13.PUBLIC HEARING: Adopt a Resolution Adopting the 2025 Urban Water Management
Plan and a Resolution Adopting the 2025 Water Shortage Contingency Plan. CEQA
Status: Exempt under Water Code Sec. 10652. Public Comment, Staff Presentation
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Utilities
Meeting Date: June 8, 2026
Report #:2512-5656
TITLE
PUBLIC HEARING: Adopt a Resolution Adopting the 2025 Urban Water Management Plan and a
Resolution Adopting the 2025 Water Shortage Contingency Plan. CEQA Status: Exempt under
Water Code Sec. 10652.
RECOMMENDATION
The Utilities Advisory Commission (UAC) and staff recommend the City Council adopt a
resolution adopting the 2025 Urban Water Management Plan and a resolution adopting the
2025 Water Shortage Contingency Plan. The UAC recommends that the UAC submit
Commissioner Gupta’s May 2, 2026 Companion Memo (Public Comment Letter submitted to
the UAC, shown in Attachment C) to the City Council as additional information (passed 4-1-1-1
Croft no, Mauter abstain, Scharff absent).
EXECUTIVE SUMMARY
The Urban Water Management Planning Act (codified in the California Water Code (§10610-
10656 and §10608) requires urban water suppliers to submit an Urban Water Management
Plan (UWMP), which includes a Water Shortage Contingency Plan (WSCP), every five years.
UWMPs must include information about water demand, water supply, demand management
activities, alternative water supplies, anticipated shortages during dry periods, and contingency
plans for addressing those shortages. The actions recommended in this report satisfy a
regulatory compliance activity, it can be amended at a later date and adoption is not a sign of
endorsement of the assumptions used to complete the required regulation. The 2025 UWMP
must be adopted by City Council and submitted to the Department of Water Resources (DWR)
to meet the state-required deadline of July 1, 2026.
The City’s demand for water is expected to decrease by about 5% over the next 25 years,
inclusive of savings from passive and active conservation. Potable water supply from the City’s
supplier, the San Francisco Public Utilities Commission (SFPUC), is projected to be adequate
during normal years, but significant shortfalls are expected during droughts.
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Palo Alto, in collaboration with its partners, continues to seek to maximize water conservation
to reduce the impact of dry years. When water supply shortages do occur, Palo Alto’s WSCP
provides for increasingly stringent steps to reduce water use including public outreach and
education, rebate programs, water use restrictions, and water allocations.
BACKGROUND
1 and
made the following recommendations to the City Council: to recommend that the City Council
adopt a resolution adopting the 2025 UWMP, a resolution adopting the 2025 WSCP, and an
Ordinance Amending Municipal Code Chapter 12.32 (Water Use Regulations) and that the UAC
submit Commissioner Gupta’s May 2, 2026 Companion Memo (Public Comment letter
submitted to the UAC shown in Attachment C) to the City Council as additional information2
(passed 4-1-1-1 Croft no, Mauter abstain, Scharff absent).3
1 Agenda item #4: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=19031
2 On May 5, 2026, Commission Gupta submitted a memo to the UAC, proposing seven in-context edits for inclusion
in the City’s 2025 UWMP.
3 Draft Action Minutes of May 6, 2026 Regular Meeting of the Utilities Advisory Commission.
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implemented during a water shortage. These actions include enforcement of the City’s
permanent water use restrictions, along with increasingly stringent water-use prohibitions for
each shortage level.
ANALYSIS
7.
7 2025 Regional Water Demand and Conservation Study: https://bawsca.org/water/use/2025_Demand_Study
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Figure 1: Palo Alto’s Annual Purchases from SFPUC - Actual and Forecast
Table 1 shows projected population in Palo Alto based on the population assumptions for the
2025 Demand Study. Consistent with the City’s 2023-2031 Housing Element, the projections use
population data from the Association of Bay Area Governments (ABAG) Plan Bay Area 2040
projections, together with the assumption that the City will meet its RHNA targets by 2031.
Under this assumption, all population growth occurs through 2031 as those units are added,
and population levels remain flat after 2031.
Water demand and population are described in “Section 4 – Water Demand” and “Section 2 –
Service Area” of the UWMP.
2025 2030 2035 2040 2045 2050
Service Area Population 67,231 88,509 91,532 91,532 91,532 91,532
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2. Water Supply Adequacy
Table 2: Palo Alto Potable Water Supply and Demand Balance - normal years
9 and Valley Water’s website10. Water
conservation is described in “Section 5 – Demand Management Measures” of the UWMP.
9 City Website, Ways to Save https://www.paloalto.gov/Departments/Utilities/Ways-to-Save
10 Valley Water’s Website, Water Savings https://www.valleywater.org/watersavingsorg
2025 2030 2035 2040 2045 2050
Palo Alto Demand for SFPUC Water 10,431 9,783 9,677 9,634 9,635 9,680
Individual Supply Guarantee 18,579 18,579 18,579 18,579 18,579 18,579
Difference 8,148 8,796 8,902 8,945 8,944 8,899
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The City’s 2025 UWMP provides background on its recent efforts to evaluate alternative water
supply options. The Northwest County Recycled Water Strategic Plan, completed in
collaboration with Valley Water, identified and evaluated a number of potable and non-potable
water reuse concept options using effluent from the RWQCP in Palo Alto. The City’s One Water
Plan, completed in 2024, is a framework for evaluating water supply and water conservation
alternative portfolios that may mitigate the impact of future water supply uncertainties such as
severe multi-year drought, changes in climate, water demand, and regulations. The One Water
Plan included concept options identified in the Northwest County Recycled Water Strategic
Plan. Further project-specific studies and analyses will be required to assess the need for
additional supplies or conservation, as well as to evaluate project feasibility, including detailed
cost estimates and potential funding sources. This is described in “Section 3 – System Supplies”
of the UWMP.
13. The amount of water available to San Francisco’s
Retail Customers (the residential and commercial customers in the City of San Francisco) and
Wholesale Customers (the 26 agencies, including Palo Alto, that purchase water from the
SFPUC) will be impacted by the outcome of the Water Quality Control Plan for the San Francisco
Bay/Sacramento-San Joaquin Delta Estuary (Bay-Delta Plan Amendment or Bay Delta Plan). This
2025 UWMP assumes implementation of the Bay Delta Plan and associated unimpaired flow
requirements for the Tuolumne River. In August 2018, City Council voted to support the Bay
Delta Plan14.
13 The Tier 2 Drought Response Implementation Plan, which allocates the collective wholesale customers’ share of
available RWS supplies among each of the 26 wholesale customers during dry years, only applies during system-
wide shortages of 20% or less. Because the projected wholesale cutbacks range from 31% to 48%, the Tier 2 Plan
cannot be applied. Therefore, the 2025 UWMP cutback projections are assumed to apply to each wholesale
customer equally.
14 See Council meeting minutes: https://www.cityofpaloalto.org/civicax/filebank/documents/66831
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Table 3: Projected RWS Supply Available to Palo Alto for 5-year Drought Assessment (AFY)
The potable water supply shortfall for Palo Alto for multiple dry years is shown below in Table
4. The Multiple Dry Year projections assume implementation of the Bay Delta Plan in 2030.
Under these conditions, Palo Altans will be asked to reduce water usage by up to 48%.
See “Section 8 – Supply and Demand Comparison Provisions” in the UWMP for more details.
Climate change was considered as part of SFPUC’s water supply reliability assessment, and as
required by Water Code. The City’s 2025 UWMP includes a description of actions the SFPUC has
taken to assess the effects of climate change, including its partnership with the Water Research
Foundation to develop the Long-Term Vulnerability Assessment (LTVA) of the RWS17. See
UWMP “Section 6 – Water Supply Reliability – SFPUC Climate Change Studies”.
The 2025 UWMP also includes descriptions of regional efforts facilitated by BAWSCA to address
water supply reliability, including the development of its Long-Term Reliable Water Supply
Strategy 2050 (Strategy 2050), a regional assessment of Member Agencies’ water supply needs.
See “Section 6 – Water Supply Reliability – Regional Plans to Ensure a Reliable Water Supply”.
6. Water Shortage Contingency Planning
During the most recent drought, the City was able to reduce water use by 15% in response to
voluntary reduction measures and during the 2015 drought the City reduced water use by 31%.
The City’s proposed Water Shortage Contingency Plan (WSCP) includes actions to achieve water
use reductions above 40% and above 50%, but the City does not have actual experience in
implementing such drastic measures. With each progressive stage, enforcement, rate
17 Long Term Vulnerability Assessment: https://www.sfpuc.gov/about-us/reports/long-term-vulnerability-
assessment
2030 2035 2040 2045 2050
First Year 31.1%33.0%35.2%36.8%38.4%
Second Year 42.2%42.9%45.1%46.8%48.4%
Third Year 42.2%42.9%45.1%46.8%48.4%
Fourth Year 42.2%42.9%45.1%46.8%48.4%
Fifth Year 42.2%42.9%45.1%46.8%48.4%
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strategies, and water use restrictions will be increased while putting in place mitigation
measures to maintain the health of the City’s tree canopy.
Table 5: Summary of Proposed Water Shortage Contingency Plan
Stage I Stage II Stage III Stage IV Stage V Stage VI
Target Water
Savings Up to 10%10% -20%20% -30%30% - 40%40%- 50%Above 50%
Information
Outreach
and Audit
Program
Low level
outreach
Increase advertising, social media
campaigns and direct communication with
customers targeting highest users and
increasing water use auditing
Escalate
outreach
efforts and
media
campaign
with focus
on water use
prioritization
Highest
outreach
effort level
with focus
on health
and safety
Demand-Side
Management
Programs
Continuation
of existing
programs,
evaluation of
new programs
Augment programs and incentive levels as necessary to achieve
reduction targets
Rate
Structures
Standard
rates already
encourage
conservation
Drought rate
structures may be
implemented to
secure needed
revenue
Water allocations or allotments may be
implemented
Water Use
Restrictions
Water use restrictions become more severe with each stage and enforcement is
enacted more strongly with each stage. With each stage, efforts made to ensure tree
canopy is protected as much as possible.
Recycled
Water Use
Business as
usual use
Water use restrictions require use of recycled water for specific
purposes, advertise availability of recycled water for trucked delivery,
use recycled water for City facilities and street trees as much as
possible.
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Changes to the Draft 2025 UWMP since the May 6, 2026 UAC Meeting
Since the May 6, 2026 UAC Meeting, Staff has made several formatting edits and minor
revisions to the DRAFT 2025 UWMP, which include:
Revision to Table 2: Coordination with Appropriate Agencies to reflect that the Draft
2025 UWMP was sent to other agencies.
Update to the plan’s description of the City’s Green Building Ordinance.
Revision to Table 21: WSCP Summary to reflect that implementation of progressive
water restrictions begins in Stage 1 of a water shortage, rather than Stage 2 as reflected
in Table 21 of the May 2026 UAC version.
FISCAL/RESOURCE IMPACT
Adoption of the 2025 UWMP and WSCP do not have an associated resource impact. Actions to
execute this plan will require allocation of resources, especially should implementation of
contingency planning be necessary.
STAKEHOLDER ENGAGEMENT
On March 31, 2026, staff presented key updates on the 2025 UWMP at the UAC meeting.
During public comment, a speaker recommended that the City of Palo Alto use alternative
water supply reliability projections rather than those provided by its supplier. In response,
Commissioners asked whether that would be possible and about the significance of those
projections in the UWMP. The City is required to use information provided by the SFPUC,
though alternative projections could potentially be explored in the future if first vetted by staff
and brought to SFPUC for consideration. Staff noted that such work would need to be
presented in a separate document, could not be completed within the UWMP timeline, and
would require additional funding and likely consultant support. Commissioners discussed
whether the City should hire a consultant or rely on staff and existing resources to evaluate
alternatives to SFPUC’s design drought. Two Commissioners asked staff to consider the SFPUC
Long-Term Vulnerability Assessment and Adaptation Plan and explain its relevance to the
UWMP, and one Commissioner supported approaching SFPUC with alternative projections.
Commissioners also discussed several other issues related to the UWMP. Two Commissioners
stated that the City’s demand forecast appears reasonable, while others asked why some
agencies project increased demand and how factors such as temperature, snowmelt, and other
assumptions are incorporated into forecasts. One Commissioner suggested revising the UWMP
language to reflect the City’s view of SFPUC’s water supply reliability projections and design
drought, while another noted that the staff report did not mention the City Council’s support
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for the Bay Delta Plan19. A Commissioner also noted that UWMPs should be viewed not only as
a regulatory requirement but also as an opportunity to improve processes and methodologies
each cycle and to support regional coordination.
19 See Section 1, page 12 of the 2025 Urban Water Management Plan
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2026/june/draft-city-of-palo-alto-urban-water-management-plan.pdf
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companion memo (see Attachment C). The substitute motion failed on a 2-4-1 vote (Phillips,
Croft, Mauter, Metz no, Scharff absent. One commissioner stated that they did not agree with
each of the edits in the memo and that the UAC would need to discuss each proposed edit.
Another commissioner noted that UWMP is a regulatory requirement and so it is not the
appropriate place to address the UAC’s concerns. Another commissioner asked what document
could be more important than the UWMP with respect to water supply and stated that they
could not support the UWMP as recommended by staff. Commissioner Gupta then moved a
substitute motion recommending that the City Council adopt the proposed resolutions and
ordinance, and that the UAC submit Commissioner Gupta’s May 2, 2026 Companion Memo
(Public Comment Letter submitted to the UAC) to the City Council as additional information.
Commissioner Gupta said that he believes the memo reflects the UAC’s discussion and
commentary on the topic and that it provides City Council with options for consideration. That
motion passed on a 4-1-1-1 vote (Croft no, Mauter abstain, Scharff absent). The Chair clarified
that under the motion the memo is not from the UAC to City Council but rather a memo from
Commissioner Gupta to City Council for their consideration. The UAC appointed Commission
Gupta to represent the views of the UAC at the June 8, 2026 City Council meeting.
ENVIRONMENTAL REVIEW
ATTACHMENTS/LINKS
21
APPROVED BY:
21 Draft 2025 Urban Water Management Plan and 2025 Water Shortage Contingency Plan
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2026/june/draft-city-of-palo-alto-urban-water-management-plan.pdf
*NOT YET APPROVED*
1
6055503
Resolution No. XXXX
*NOT YET APPROVED*
2
6055503
//
Director of Administrative Services
*NOT YET APPROVED*
1
6055504
Resolution No. XXXX
*NOT YET APPROVED*
2
6055504
SECTION 2. The Council finds and determines that, under the California Water Code
Section 10652, the adoption of the Plan and the WSCP and this resolution does not constitute a
project under the California Environmental Quality Act, and no environmental assessment is
required.
INTRODUCED AND PASSED:June X, 2026
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
City Attorney or designee City Manager
Director of Utilities
Director of Administrative Services
Proposed Edits to the Palo Alto UWMP
Based on the YRA letter of April 30, 2026
Prepared for: Palo Alto Utilities Advisory Commission · Meeting of May 6, 2026 · Item 4
Utsav Gupta, Commissioner
How to read this document
Each section below reproduces the actual draft 2025 UWMP language verbatim and shows proposed edits
inline. Color and formatting are used as follows:
Marker Meaning
black, plain Existing UWMP draft text — unchanged.
blue, bold Proposed insertion (added language).
red, strikethrough Proposed deletion (removed language).
Scope and posture. This memo does not propose replacing SFPUC's water-supply reliability numbers with
non-SFPUC numbers. Staff has stated that the City is required to use SFPUC's information in the UWMP
itself (May 6 Item 4 staff report, p. 9). The edits below instead (i) clarify the provenance of those numbers
(they are SFPUC modeling outputs, not Palo Alto-adopted planning standards), (ii) add a transparent
sensitivity using SFPUC's own Finance Bureau projections, (iii) disclose the SFPUC's end-of-year storage
levels under its Design Drought, (iv) add a 2021–2023 Water Shortage Emergency lookback to the
financial-impact discussion, (v) record Palo Alto's reservation of contractual rights regarding >20%
allocations, and (vi) note Palo Alto's potential cost exposure under the AWS Program. All proposed
insertions are additive; no SFPUC figure is removed.
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Edit 1 — Section 1, Lay Description (p. 12)
Subject: framing the 48% rationing figure as an SFPUC scenario, not a Palo Alto-adopted standard.
Existing draft text (verbatim, UWMP p. 12):
Given the City's forecasted water demand and projections of water supply availability provided by the SFPUC,
the City anticipates the need to implement water use reductions of up to 48% in consecutive dry year
scenarios post implementation of the Bay Delta Plan Amendment. During the drought that occurred in 2012–
2016 (2015 drought), the City was able to reduce water use by 31% by restricting landscape irrigation to two
times per week as well as a number of other measures. This was followed by the drought that occurred in
2020–2023 (2021 drought) during which the City reduced water use by 15% in response to voluntary water
reductions measures.
Proposed revision (edits shown inline):
Given the City's forecasted water demand and projections of water supply availability provided by the SFPUC,
the City anticipates the need to implement water use reductions of up to 48% in consecutive dry year
scenarios post implementation of the Bay Delta Plan Amendment. , as projected by the SFPUC under its 8.5-
year Design Drought planning model. The Design Drought is a hypothetical drought sequence developed by
the SFPUC for system-modeling purposes; the SFPUC's own Long-Term Vulnerability Assessment, which
incorporated 100 years of observed data, 1,100 years of tree-ring reconstructions, and 25,000 simulated
runs, did not produce a drought of equivalent severity. Other large California water agencies, including
Valley Water and EBMUD, plan against the drought of record (1987–1992); under that planning standard
the City would not anticipate mandatory rationing in a five consecutive dry-year sequence. Staff presents
the SFPUC figure for regulatory completeness and the comparative context for transparency. During the
drought that occurred in 2012–2016 (2015 drought), the City was able to reduce water use by 31% by
restricting landscape irrigation to two times per week as well as a number of other measures. This was
followed by the drought that occurred in 2020–2023 (2021 drought) during which the City reduced water use
by 15% in response to voluntary water reductions measures.
Editor's note — The current paragraph presents "up to 48%" as a single planning figure without telling the reader that it
derives from one SFPUC modeling scenario (the Design Drought). Staff itself has noted (Item 4 staff report, p. 6, fn. 7)
that the projected 31–48% wholesale cutbacks exceed the 20% threshold under which the Tier 2 Drought Response
Implementation Plan applies, so the Tier 2 Plan cannot govern allocation in the scenario the UWMP describes. Adding
the proposed sentence keeps SFPUC's number in place while making clear it is one scenario among several. This also
responds to the Commissioner request, recorded on p. 9 of the staff report, to alter the UWMP language to indicate the
City's view of SFPUC's reliability projections and Design Drought.
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Edit 2 — Section 6, Table 20 (p. 93)
Subject: add a Finance Bureau sensitivity row beneath the Water Enterprise (UWMP) projections.
Existing draft text and table (verbatim, UWMP pp. 92–93):
Table 20 (existing, unchanged in the proposal):
RWS Supply
Allocation
2030 2035 2040 2045 2050
Retail
Customers
(a)(b)
Wholesale
Customers
(c)(d)
Total RWS
Supplies
196.62 197.52 202.43 208.12 215.10
Proposed addition: insert the following sensitivity table immediately after Table 20, with new
note (e):
Sensitivity
(proposed
addition)
2030 2035 2040 2045 2050
Total RWS —
SFPUC Finance
Bureau (e)
—182.1 185.2 190.2 193.9
Total RWS —
Water
Enterprise
(Table 20)
196.62 197.52 202.43 208.12 215.10
Difference
(mgd)
—15.4 17.2 17.9 21.2
(e) The SFPUC publishes two sets of RWS demand/sales projections: the Water Enterprise projections,
presented in the SFPUC's UWMP and reproduced in Table 20 above; and the Finance Bureau projections,
prepared annually for budgeting and rate-setting and published in the SFPUC Water Enterprise Financial Plan.
The SFPUC has stated that the Water Enterprise projections "represent an outside bound of whatever
demand will occur" and "will likely always be greater than actual demands," while the Finance Bureau
projections are "as close to actual as we can make them." Both are presented above so that the UWMP
records both the SFPUC's regulatory-planning view (Water Enterprise) and its budgetary view (Finance
Bureau), reflecting the ~21 mgd gap at the 2050 planning horizon.
Editor's note — Adding a Finance Bureau row beneath Table 20 does not replace SFPUC's regulatory numbers; it
discloses a second SFPUC-published number set that the SFPUC itself uses for budgeting. Both are SFPUC products,
addressing staff's stated concern that the UWMP must rely on SFPUC information. A 21.2 mgd gap at 2050 is material to
any downstream investment decision (AWS cost-share, rate setting, conservation budgets), and recording it in the
UWMP itself prevents staff and Council from being asked to reconcile the two figures only later, in a separate document.
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Edit 3 — Section 6, Alternative Water Supply Program (p. 76)
Subject: quantify Palo Alto's potential cost exposure and condition the City's support.
Existing draft text (verbatim, UWMP p. 76, abridged at "…"):
In 2019, the SFPUC established the Alternative Water Supply (AWS) Program to identify and plan water
supply and storage projects and actions that increase the dry-year reliability of the RWS. Based on the 2045
planning horizon that the SFPUC applied in its February 2024 AWS Plan, the SFPUC anticipates a water supply
gap will occur in future dry years. … Since the development of that plan, three projects have been deferred
(Daly City Recycled Water Expansion, Alameda County Water District-Union Sanitary District Purified Water,
and Calaveras Reservoir Expansion) and one project has been canceled (Los Vaqueros Reservoir Expansion).
The AWS Program is continuing to pursue the following two projects: PureWater Peninsula and South Bay
Purified Water.
Proposed addition: append the following paragraph to the AWS Program subsection.
Cost exposure to Palo Alto and conditional position. PureWater Peninsula is currently budgeted at $747
million for 6 mgd of yield (SFPUC Water Enterprise FY 2027–2036 Ten-Year CIP, January 13, 2026, p. 94).
Assuming a two-thirds BAWSCA cost share and Palo Alto's allocation share within BAWSCA of
approximately 7%, Palo Alto's potential capital exposure is on the order of $35 million, plus operating
costs. The City supports continued AWS planning, but conditions any cost-share commitment on the SFPUC
and BAWSCA demonstrating a supply gap that persists under (i) Finance-Bureau-class demand projections
(see Table 20 sensitivity, page 93) and (ii) a drought-of-record (1987–1992) planning methodology
comparable to that used by Valley Water and EBMUD. The City notes that, since the February 2024 AWS
Plan, three of six identified regional projects have been deferred and one has been canceled, indicating
that the underlying supply-gap analysis remains unsettled.
Editor's note — The current paragraph names the AWS projects but does not quantify what those projects could cost
Palo Alto. Three of six projects deferred and one canceled within ~24 months is itself evidence that the supply-gap
analysis is volatile. Recording Palo Alto's evaluative criteria in the UWMP — rather than only in correspondence — gives
staff a principled basis on which to engage future BAWSCA cost-share votes.
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Edit 4 — Section 7, WSCP Financial Impacts (pp. 97 and 111)
Subject: add a 2021–2023 Water Shortage Emergency lookback to the financial-impact discussion.
Existing draft text — UWMP p. 97 (Palo Alto's Drought Experience):
Existing draft text — UWMP pp. 111–112 (Revenue Reductions):
Stage 4: 30% – 40% target water savings results in $7.0 million shortfall
Proposed addition: insert the following "Lookback" paragraph at the end of the Revenue
Reductions subsection (after the stage list, before "Mitigation Actions"):
Lookback — Financial Consequences of the 2021–2023 Water Shortage Emergency. In November 2021, the
SFPUC declared a Water Shortage Emergency and called for system-wide voluntary water-use reductions.
At the time of the declaration, SFPUC system storage was at approximately 4.5 years of supply; storage
never fell below approximately 4 years of supply during the entire 2020–2023 drought. The City's response
— the 15% voluntary reduction described on p. 97 — produced an estimated $2.5 million revenue shortfall
for the City and contributed to a long-term ~10% per-account reduction in water use that persisted
through FY 2025 (see p. 53). The SFPUC itself experienced an FY 2023–24 revenue shortfall of
approximately $25 million in retail sales and $5 million in wholesale sales after declining to lift the drought
surcharge until May 2023, despite SFPUC system storage reaching 92% of capacity by mid-January 2023.
Going forward, the City should weigh these revenue and rate-stability consequences when responding to
future voluntary or mandatory conservation calls and should request from the SFPUC the supply-storage
data underlying any future Water Shortage Emergency declaration before the City implements
corresponding WSCP stages.
Editor's note — The current paragraph quantifies revenue shortfalls per WSCP stage but provides no historical context
on whether the conditions that triggered prior shortages were warranted. The 2021–23 episode is the most relevant,
recent case study and is directly responsive to the Water Code §10632(a)(8)(A) requirement to describe potential
revenue reductions associated with shortage response actions. The lookback is factual, sourced to SFPUC's own drought-
conditions updates and budget reports, and it provides Council and staff a basis for setting more deliberate triggers for
future WSCP activations.
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Edit 5 — Section 8, Dry Year Scenarios (p. 116)
Subject: add a one-sentence reservation of rights regarding >20% allocations.
Existing draft text (verbatim, UWMP p. 116):
Proposed revision (edits shown inline):
For water shortages up to 20%, the Tier One water shortage plan will be applied. The Tier One plan does not
apply to system-wide shortages greater than 20%. Implementing water use reduction greater than 20%
requires the SFPUC to meet and discuss with Wholesale Customers a strategy for meeting incremental
reductions above the Tier One plan. The SFPUC has the authority to make final allocation decision for the
portion above 20%, though the Wholesale Customers have the contractual right to challenge the proposed
approach. The Tier 2 Drought Response Implementation Plan, which allocates the wholesale share during
dry years, applies only to system-wide shortages of 20% or less; because the projected wholesale cutbacks
in this UWMP range from 31% to 48%, the Tier 2 Plan cannot be applied. The City will exercise its
contractual right to challenge any proposed allocation greater than 20% that is not supported by reservoir-
storage and supply-availability data at the time the allocation is contemplated, and reserves all rights and
remedies available under the Water Supply Agreement, Section 3.11(c)(3). This analysis assumes the
relative split of available water between SFPUC Retail and Wholesale Customers will be the same for
shortages greater than 20% as shortages of 20%.
Editor's note — The Tier 2 acknowledgment is staff's own (Item 4 staff report p. 6, fn. 7); putting it in the UWMP body,
rather than only in the staff report, makes the limitation visible to Council and to ratepayers. The reservation-of-rights
sentence does not reject SFPUC's analysis; it records that any future >20% allocation will be evaluated against then-
current physical supply, consistent with the WSA contractual right that the existing paragraph already references. This is
the textual change a Commissioner suggested at the March 31, 2026 UAC meeting (per staff report, p. 9).
──────────────────────────────────────────────────────────────────────────────────────────
Edit 6 — New Appendix: SFPUC End-of-Year Storage Under the Design Drought
Subject: add an appendix table so readers can see SFPUC system storage at the end of each Design Drought year.
There is no existing UWMP text to replace; this is a proposed new appendix entry, to be referenced from p. 92 (where the
UWMP describes the Design Drought as an 8.5-year sequence) and from p. 116 (where the multiple-dry-year cutbacks
are presented).
Appendix [X]: SFPUC System Storage Under the Design Drought. The table below presents SFPUC end-of-
year system storage under the SFPUC's 8.5-year Design Drought sequence, assuming the Bay Delta Plan is
in effect and using SFPUC 2050 demand projections. The table is included for transparency: it shows that,
even under the SFPUC's own most-severe planning scenario, system storage remains above 600 thousand
acre-feet (TAF) at the end of year 5 and does not approach the RWS "dead pool" of approximately 96.8 TAF
until the end of year 8. The cutback percentages presented in Table 27 (UWMP p. 117) are therefore a
function of SFPUC storage-management rules under the Design Drought model, not a function of physical
absence of water in the system.
Proposed Appendix Table:
Design
Drought
Year
86–87 87–88 88–89 89–90 90–91 91–92 92–76 76–77
Annual
storage
impact
(TAF)
-469 -263 +41 -206 -14 -159 -208 -192
Total
SFPUC
end-of-
year
storage
(TAF)
1,048 785 826 620 606 447 239 47
Source: derived from data provided by the SFPUC; presentation by Yosemite Rivers Alliance, Table YRA-1.
Editor's note — The current UWMP describes the Design Drought as an 8.5-year sequence (p. 92) and presents the
resulting cutback percentages (Table 27, p. 117), but does not show the intermediate storage values. Disclosing the
storage trajectory in an appendix lets Council and ratepayers see that physical supply is not exhausted until very late in
the modeled sequence — a fact that is material to evaluating the >20% rationing scenario discussed in Edit 5.
──────────────────────────────────────────────────────────────────────────────────────────
Edit 7 — Section 6, Climate Change / SFPUC Climate Studies (pp. 78–80)
Subject: respond to Commissioner request for an LTVA-applicability discussion in the UWMP.
The May 6 Item 4 staff report (p. 9) records that two Commissioners requested staff "take into consideration the Long-
Term Vulnerability Assessment (LTVA) and Adaptation Plan for the SFPUC and be prepared to explain how this work
applies to the UWMP." The current UWMP refers to the LTVA but does not explain its relationship to the Design Drought
figures used elsewhere in the document. Recommended addition:
Proposed insertion in the SFPUC Climate Change Studies subsection (Section 6):
Relationship of the LTVA to the Design Drought used in this UWMP. The SFPUC's Long-Term Vulnerability
Assessment, completed in partnership with the Water Research Foundation, evaluated regional water-
supply reliability using 100 years of observed hydrologic data, 1,100 years of tree-ring–based
reconstructions, and approximately 25,000 simulated stochastic model runs. None of the stochastic runs
produced a drought sequence as severe as the SFPUC's Design Drought (described on p. 92). The Design
Drought, rather than the LTVA's stochastic ensemble, is the planning input for the multiple-dry-year
cutback percentages presented in Table 27 (p. 117) and for the SFPUC's Alternative Water Supply Program.
This UWMP presents the SFPUC-derived Design Drought figures for regulatory completeness; the LTVA is
included to give Council and ratepayers a fuller picture of the range of plausible future hydrologic
conditions.
Editor's note — This edit responds directly to the Commissioner request recorded on p. 9 of the staff report. It does not
modify any SFPUC figure; it explains the relationship between two SFPUC products (the LTVA and the Design Drought) so
that the UWMP itself answers the question Commissioners raised at the March 31 meeting.
──────────────────────────────────────────────────────────────────────────────────────────
Suggested UAC Motion
"The Utilities Advisory Commission recommends that staff incorporate, prior to City Council transmittal of
the 2025 Urban Water Management Plan, the seven in-context edits set out in the May 2, 2026 companion
memo: (1) the Section 1 framing edit at p. 12; (2) the Table 20 Finance Bureau sensitivity at p. 93 with new
note (e); (3) the AWS Program cost-exposure and conditional-support paragraph at p. 76; (4) the 2021–2023
Water Shortage Emergency lookback at pp. 97 and 111; (5) the >20% allocation reservation-of-rights at p.
116; (6) a new appendix presenting SFPUC end-of-year system storage under the Design Drought; and (7) an
LTVA-applicability paragraph in Section 6. None of these edits alters or replaces an SFPUC-provided number;
all are additive and use only SFPUC-published or publicly-sourced data."
Sources
• Item 4 Staff Report, UAC packet, May 6, 2026, including Attachment A (Draft 2025 Palo Alto UWMP).
• Yosemite Rivers Alliance letter to PAUAC dated April 30, 2026, with Attachments A–D.
• SFPUC Water Enterprise Financial Plan Dashboard (Projected Wholesale Sales FYE 2036–2050).
• SFPUC Water Enterprise FY 2027–2036 Ten-Year CIP, January 13, 2026, p. 94 (PureWater Peninsula).
• SFPUC Drought Conditions Updates, December 2021 – January 2023; SFPUC FY 2023-24 4th Quarter Budget Report.
• SFPUC Long-Term Vulnerability Assessment.
From:Kathryn Hug
To:Council, City
Subject:UWMP
Date:Monday, June 8, 2026 9:24:49 AM
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i
Please make the Urban Water Management Plan as strong as possible by considering and
including Commissioner Gupta's suggestions. This is a critical time for forwarding a plan that
secures one of our most vital resources. I know that the Council has many important decisions
to deal with in today's session. I wish you the courage, energy, and knowledge to come to Item
13 on the agenda and approve the best UWMP possible.
Thank you.
Kathryn H. Hug
391 Oxford Avenue
Palo Alto, CA 94306
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From:Andie Reed
To:Council, City
Subject:Urban Water Management Plan, Item 13
Date:Sunday, June 7, 2026 6:55:18 PM
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Dear Mayor, Vice Mayor, and City Council members,
Please accept and incorporate into Palo Alto’s Urban Water Management the amendments written
by UAC Commissioner Gupta and forwarded to Council by the UAC.
The basis for the San Francisco PUC demand projections today, which are historically
inflated, do not accurately reflect our current and future needs and instill fear in order to
encourage rate hikes.
Valley Water, East Bay MUD, and the Sierra Club have all provided modeling that indicates
there is sufficient supply for people and for the environment; the Bay Delta Plan should be
heeded.
In the future, and long before these issues come to Council for a vote, please include the
SFPUC in a study session to come to a transparent agreement.
Thank you for your hard work on this issue.
Andie Reed
--
Andie Reed
Palo Alto, CA 94301
530-401-3809
From:Phyllis Brown
To:Council, City
Subject:June 8 City Council meeting Item 13
Date:Sunday, June 7, 2026 5:50:21 PM
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Dear Mayor Veenker and City Council Members:
I find the information in the Staff Report for item 13, the 2025 Urban Water Management
Plan, rather confusing, especially the fact that the Utility Advisory Commission submitted
their recommendation but also allowed the submission of a memo from Commisioner Gupta
with proposed edits to the Palo Alto UWMP. I have heard Commissioner Gupta explain the
problems he sees with with SFPUC's water-supply reliability numbers, and I found his
argument convincing. Therefore, I urge you to attend carefully to his arguments as you discuss
the recommendation from the Utility Advisory Commission. Is it possible that the disaster
drought modeling, which will result in rate hikes, is not in the best interests of our city? Would
acceptance of the Water Management Plan as recommended by the Utility Advisory
Commission undermine implementation of the Bay Delta Plan that the City of Palo Alto has
voted to support?
I look forward to your thoughtful discussion of this issue at the meeting tomorrow evening,
June 8, 2026.
Phyllis Brown
From:TC Rindfleisch
To:Council, City
Cc:Peter Drekmeier; Gupta, Ustav; Rebecca Sanders
Subject:Re: JUNE 8 COUNCIL AGENDA ITEM #13: Urban Water Management Plan (UWMP)
Date:Sunday, June 7, 2026 4:52:08 PM
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On 6/7/2026 4:49 PM, TC Rindfleisch wrote:
> Dear Palo Alto City Councilmembers...
Sorry, make that "June 8"... Tom R.
From:TC Rindfleisch
To:Council, City
Cc:Peter Drekmeier; Gupta, Ustav; Rebecca Sanders
Subject:JULY 8 COUNCIL AGENDA ITEM #13: Urban Water Management Plan (UWMP)
Date:Sunday, June 7, 2026 4:49:32 PM
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on links.
Dear Palo Alto City Councilmembers, I am writing to ask that you
incorporate in an appropriate way the concerns Utilities Advisory
Commissioner Gupta has expressed in the form of proposed amendments to
the City’s Urban Water Management Plan. Basically the issue is that
there is strong evidence that the modeling of drought and water supply
futures provided by the San Francisco Public Utilities Commission
(SFPUC) is excessively conservative, resulting in unnecessarily
burdensome future rate hikes that will impact not only Palo Alto
residents and businesses, but all of SFPUC’s customers. Adequate water
supply management is clearly absolutely essential for the welfare of our
communities in the face of the threat of serious droughts exacerbated by
climate change. However, it is a matter of prudent public
policy consensus to estimate the likelihood of future drought severity
and duration as realistically as possible to drive the corresponding
actions needed to ensure adequate supply, distribution, and conservation
management. It appears that the SFPUC modeling and policy decisions on
which the current UWMP is based are an excessively conservative upper
bound on the threat/response strategy, and that there may be a conflict
of interest in the underlying process that benefits SFPUC financially
and that could result in higher water rates for the 26 member
communities plus the City of San Francisco than are warranted.
I understand that the City is obligated to adopt the UWMP by July 1,
2026, and that time pressure does not allow for full consideration of
the updated assessments of future criteria suggested by the UAC. In
preparation for this submission however, to ensure that Palo Alto's
concerns are on record, I strongly recommend that the current draft UWMP
be updated with the edits UAC Commissioner Gupta has submitted. This
will make clear that more realistic future projections of water
supply/drought threats and attendant policy decisions can and should
take place before the next UWMP is due.
Thank you for your consideration.
Thomas Rindfleisch
Crescent Park
From:Virginia Tincher
To:Council, City
Subject:June 8 City Council Meeting - Agenda Item 13. PUBLIC HEARING: Adopt a Resolution Adopting the 2025 Urban
Water Management Plan
Date:Sunday, June 7, 2026 4:35:55 PM
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on links.
Dear Palo Alto City Council,
Regarding - Agenda Item 13. PUBLIC HEARING: Adopt a Resolution Adopting the 2025 Urban Water
Management Plan
I am a life long resident of Palo Alto and the Bay Area. I care deeply about the health of our rivers, delta, the San
Francisco Estuary and agricultural lands. Ensuring sufficient water flow throughout our waterways is critical for the
health of the system and those of who depend upon it - the people, plants and animals.
Please incorporate the language provided by UAC Commissioner Gupta into Palo Alto’s Urban Water Management
Plan. His additions support moving forward towards a reasonable solution similar to EBMUD and Valley Water.
It’s also very important that the City of Palo Alto holds a study session on water rates and insists that the SFPUC
participate to start the conversation.
Thank you,
Virginia Tincher Van Kuran
879 Garland Drive
Palo Alto, Ca 94303
From:Susan Kemp
To:Council, City
Subject:Agenda Item #13 on June 8, 2026 City Council Meeting Agenda
Date:Sunday, June 7, 2026 12:50:42 PM
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Dear Mayor Veenker and City Council Members,
With regard to Agenda Item #13 on the June 8th schedule, Urban Water Management, I urge
you to accept and incorporate into Palo Alto's Urban Water Management the amendments
written by Utilities Advisory Commissioner Utsav Gupta. I am concerned about (1)
environmental issues, especially the dismal Tuolumne River salmon counts over the past
twenty years and (2) City of Palo Alto Utilities water rate increases escalating in the future
based on SFPUC's poor management of the water and their overly cautious and unrealistic
water use demand projections. Instead of being rewarded for reducing our collective water
needs vs the past, we are being penalized with the prospect of increasingly higher rates. We
have saved water by installing low flow toilets and showers, have replaced our lawns with less
thirsty plantings, and other measures resulting in overall demand dropping 15% despite an
86% population increase. Please don't allow the SFPUC's Design Drought flawed modeling to
persist and unnecessarily impact both our city water rates and the other twenty-five wholesale
customers of the Hetch Hetchy water system. In the future, please hold a study session on
water rates and insist that the SFPUC participate.
With regard to Consent Calendar Items relating to water management it is my understanding
that the Palo Alto Utilities Advisory Commission has had no input to the issue of the City of
Palo Alto's Permanent Water Use Ordinance. If this is true, I urge you to postpone approval of
this item until the UAC can review and weigh in on this important issue.
Thanks,
Susan Kemp
Ventura Neighborhood resident
From:John Guislin
To:Council, City
Subject:City Council Item 13 - June 8, 2026 - Palo Alto UWMP
Date:Sunday, June 7, 2026 9:26:22 AM
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i
Mayor Veenker and City Council Members:
Our UAC Commissioner Gupta has done the hard work of analyzing the
data provided by the SFPUC and finds the information deeply flawed.
Planning for a 1 in 8,000 year drought is beyond the reasonable capabilities
of our government and will result in a series of unsustainable and
unnecessary water rate increases. In my household of two, with reduced
landscaping, the water bill is currently almost half of our total utility bill.
Please invest the time to carefully consider and adopt the amendments
proposed by Commissioner Gupta. Failure to do so will put us on a path to
ever-increasing water rates that will negatively impact Palo Altans and all
the communities that make up the Bay Area Water Supply and
Conservation Agency (BAWSCA).
John Guislin
Crescent Park
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From:Annette Glanckopf
To:Council, City; City Clerk
Subject:June 8 agenda item 13 - Urban Water Management Plan
Date:Sunday, June 7, 2026 9:04:34 AM
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Dear Council Members,
As written the proposed Urban Water Management Plan on June 8th - Monday night’s
agenda #13 will be a huge, and uncalled for, jump in the price Palo Altans and other
communities pay for water. Many of us in Palo Alto can’t afford to pay more than a
reasonable annual increase for our utilities, especially if such rates are not necessary
in the first place.
Given the significant impact on rate hikes, I support the amendments written by UAC
Commissioner Gupta and forwarded to Council by the UAC. Please accept and
incorporate these amendments and refer it back to the Utilities Commission for a
substantive discussion.
Having reviewed this material, I am convinced the information from SFPUC is wrong
and will trigger unnecessary and huge rate hikes to all customers of SFPUC. Finally I
support the Bay Delta Plan that you, the Palo Alto City Council, already voted to
support.
Thank you.
Annette Glanckopf
Midtown
From:Sonya Bradski
To:Council, City
Subject:Subject Line - Item 13 - Palo Alto UWMP
Date:Saturday, June 6, 2026 7:53:21 PM
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on links.
Dear Mayor Veenker and City Council Members:
Please accept and incorporate into Palo Alto’s Urban Water Management
the amendments written by UAC Commissioner Gupta and forwarded to
Council by the UAC. Having reviewed this material, we are convinced
the information from SFPUC is wrong and will trigger unnecessary and
huge rate hikes to all customers of SFPUC.
Thank you.
Sonya Bradski
Greenmeadow Resident
From:Rebecca Sanders
To:Council, City
Subject:Council Meeting Monday June 8 - Item 13 - Palo Alto UWMP
Date:Saturday, June 6, 2026 6:23:56 PM
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Dear Mayor Veenker and City Council Members:
Please incorporate UAC Commissioner Gupta’s suggested amendments to the City’s Urban Water Management
Plan. After reading materials and listening to some presentations, I am convinced that the information we are
basing the plan on, data provided by the San Francisco Public Utilities Commission, is misleading, alarmist, is not
aligned with Palo Alto’s values and is not in the best interest of residents and businesses. Accepting SFPUC
disaster drought modeling will lead to unnecessary rate hikes that will be a burden not to just Palo Alto but to all of
SFPUC’s customers.
I also personally support the Bay Delta Plan that Palo Alto City Council voted to support. SFPUC's numbers clearly
undermine and would scuttle that important environmental measure.
Thank you for considering Commissioner Gupta’s verbiage and please incorporate it into the plan so that Palo
Altans are not saddled with egregious and very REAL rate hikes based on SFPUC’s IMAGINARY, manufactured
disaster scenario.
Thank you Councilmember Greer Stone for making Palo Alto’s voice heard at BAWSCA and beyond in this matter.
You have been a real champion for the City.
Sincerely,
Becky Sanders
Ventura Neighborhood
From:Magic
To:Council, City
Subject:Urban Water Management Plan
Date:Saturday, June 6, 2026 5:58:58 PM
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!
Dear Councilmembers,
What a pleasure to write you about the Urban Water Management Plan! You've a remarkable
opportunity to make evidence-based policy for common good.
Two years ago you, councilmembers Burt, Lauing, and Stone, and your former colleague
councilmember Kou voted to appoint Utsav Gupta to the Utilities Advisory Commission. The
wisdom of that vote is evident in Gupta's recent memo to you suggesting language to
incorporate into the plan.
I respectfully request that you read the memo carefully and heed Gupta's recommendations. I
congratulate you who appointed Gupta and I urge all of you to recognize in some public way
his service in analyzing the issues and providing you precisely the kind of science-based
policy guidance that is so valuable to decision makers.
The UWMP is a five-year commitment. We've already squandered more than half a million
dollars on alarmist and baseless SFPUC claims. This time, let's follow the science rather than
the dogma. Thank you for considering my views.
With appreciation,
David Schrom
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From:Peter Drekmeier
To:Council, City
Subject:YRA Comments - Item 13, Urban Water Management Plan
Date:Thursday, June 4, 2026 9:54:03 AM
Attachments:PA Urban Water Management Plan - Item 13.pdf
PastedGraphic-1.png
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Dear Mayor Veenker and Council Members:
Please see my attached letter regarding Item 13 on the June 8 Council meeting agenda —
Urban Water Management Plan.
Thank you for the opportunity to comment.
-Peter
Please note my new email address.
-----------------------
Peter Drekmeier
Policy Director
Yosemite Rivers Alliance
(Formerly Tuolumne River Trust)
peter.drekmeier@yosemiterivers.org
1
June 4, 2026
Mayor Vicki Veenker and Council Members
Palo Alto City Council
City.Council@PaloAlto.gov
Dear Mayor Veenker and Council Members:
On July 1, the cost of water from the San Francisco Public
Utilities Commission (SFPUC) will increase 7.4% – just six months
ago, the expectation was an increase of only 1%.
Skyrocketing water rates will be the norm for many years to
come. Here’s why.
For decades, the SFPUC deferred maintenance on the Hetch
Hetchy Water System, and it caught up with us. In 2008, the
SFPUC embarked on the Water System Improvement Program
(WSIP) – a series of 80+ capital improvement projects costing
$4.8 billion plus debt service. As a result, the cost of water has
more than quadrupled (see Attachment A for background
slides).
The SFPUC has now identified another $10 billion in new capital
projects over the next 30 years, but has produced very little
analysis on how these new expenses will impact future rates.
The escalating cost of water has sent a price signal to
consumers, triggering a decline in water demand and sales. The
unit price has had to increase to cover fixed costs. This is known
as a death spiral – as prices increases, sales decline and prices
must increase even further.
The update of our Urban Water Management Plan (UWMP) is
an opportunity to challenge SFPUC policies that harm both
ratepayers and the environment.
2
What Can We Do to Address the Problem?
The first rule for getting out of a hole is to stop digging. The SFPUC is doing the exact opposite.
Their Alternative Water Supply (AWS) Plan1 suggests they might need to develop between 92
and 122 million gallons per day (mgd) of recycled water and other new supplies. The cost would
be $17-$25 billion.
The AWS Plan is not based on reality. It’s a political document used to justify the SFPUC’s
opposition to releasing much-needed water down the Tuolumne River (the source of Hetch
Hetchy water) for environmental purposes . In 2018, the State Water Board adopted higher
flows to support fish and wildlife and water quality, but the SFPUC sued, stalling
implementation of the Bay Delta Water Quality Control Plan. You might recall that Palo Alto
Council voted unanimously to support the Bay Delta Plan.
There are two major problems with the SFPUC’s policies and practices:
1) They’re planning for what they call the Design Drought. This manufactured drought
combines the two worst droughts from the 20th Century to create an artificial
megadrought that might be expected once-in-8,000 years. The Design Drought is 19
times less likely to occur than the six-year drought of record (1987-92), which is what
Valley Water and the East Bay Municipal Utilities District (EBMUD) plan for. For more
background on the Design Drought, see Attachment B.
2) SFPUC water demand projections have always been inflated. Demand today is half what
was projected in the 1980s. Over-projecting demand can lead to unnecessary
investments in expensive alternative water supplies (AWS). Palo Alto learned this lesson
the hard way, investing $559,000 in a One Water Plan that was rejected by our Utilities
Advisory Commission because it was erroneously based on 50% rationing .
If the SFPUC used the same drought scenario as Valley Water and EBMUD, they could manage
the Bay Delta Plan flow requirement without developing any new AWS or imposing water
rationing any greater than what we’ve experienced in the past.
What Is the Design Drought?
The Design Drought was created by the SFPUC as a planning tool following the 1987-92
drought. It arbitrarily combines the 1987-92 drought with the 1976-77 drought. While adding
1 SFPUC’s Alternative Water Supply Plan, February 2024 – https://hetchhetchy.org/wp-
content/uploads/2025/12/SFPUC-recent-demand.pdf
3
two years might not seem like a big deal, 1976-77 was the driest two-year period on record.
The impact of the 1976-77 drought on reservoir storage was 72% as severe as during the 1987 -
92 drought. Drought return periods (likelihood of occurrence) are logarithmic (droughts
become much less likely as they become more severe). The Design Drought is 19 times less
likely to occur than the drought of record.
The SFPUC’s Long-Term Vulnerability Assessment2 (LTVA) used 100 years of observed data,
1,100 years of tree ring data and produced 25,000 years of model data, but did not produce a
single drought as severe as the Design Drought.
All SFPUC water supply planning is run through the Design Drought model. In November 2021,
when the SFPUC declared a Water Shortage Emergency and asked everyone to conserve, they
had 4.5 year’s-worth of water in storage. They never had less than 4 year’s-worth of water in
storage during the entire 2020-22 drought. As a result of unnecessary rationing, the SFPUC
experienced a $30 million revenue shortfall in FY 2023-24 (see Attachment C).
Inflated Water Demand and Sales Projections
You’ll see from the graph below that water demand projections included in the SFPUC and
BAWSCA member agency Urban Water Management Plans have always been highly inflated.
Source: Sierra Club Drought-Demand Model (data from the SFPUC).
2 Long-Term Vulnerability Assessment, 2021 – https://www.sfpuc.gov/about-us/reports/long-term-
vulnerability-assessment
4
Over-projecting water demand and sales has serious budget implications. You’ll see from the
following slide from the SFPUC’s FY 2025-26 2nd Quarter Budget Report3 that water revenues
were $22 million below projections.
Source: SFPUC FY 2025-26 2nd Quarter Budget Status Report, March 10, 2026
This is a major reason why wholesale water rates are increasing so much more than expected.
When the SFPUC sells less water, the price per CCF must increase.
SFPUC water sales projections used for budgetary purposes are produced by their Finance
Bureau, whereas the demand projections included in the UWMP s are produced by their Water
Enterprise and BAWSCA. The UWMP numbers are always considerably higher , but both
departments have always over-projected.
An SFPUC report comparing Water Enterprise and Finance Bureau demand/sales projections 4
described the differing figures as follows:
Water Enterprise
"…the projections represent an outside bound of whatever demand will occur in the
next 25 years...These demands will likely always be greater than actual demands
because not all developments materialize, or they materialize slower than projected.”
3 SFPUC FY 2025-26 2nd Quarter Budget Status Report, March 10, 2026 –
https://sfpuc.sharefile.com/share/view/seb03a545f6ef4b8b8355977efeca86e2
4 SFPUC Water Enterprise and Finance Bureau Water Demand Projections, July 5, 2022 –
https://sfpuc.sharefile.com/share/view/sa628ebe9c31e4326b84ffa2976f9f9a3
5
Finance Bureau
"By contrast, for the purpose of financial planning and for short term water system
management, we estimate the demand that we are likely to experience. For budgeting
and rate setting we use demand projections that are as close to actual as we can make
them.”
The following table shows the UWMP demand projections.
Source: SFPUC
Attachment D shows the SFPUC’s Financial Plan sales projections. The following table shows the
difference in Regional Water System (RWS) demand/sales between the two sets of projections.
The 2050 demand projection in the UWMPs is 11% greater than the SFPUC’s own Finance
Bureau sales projection. The UWMP projections have been described as an “outside” envelope,
yet they’re used for planning purposes.
6
Shockingly, the SFPUC’s Alternative Water Supply Plan is based on the inflated Water Enterprise
(UWMP) demand projections.
The UWMPs Unnecessarily Include Alarming Rationing Figures
As a water supplier, the SFPUC provides “common language” for inclusion in the Urban Water
Management Plans. The following SFPUC table suggests supply could be reduced by 43% by
2050.
Source: SFPUC
The water supply and rationing figures provided by the SFPUC are based on the Design Drought
and inflated demand projections.
Table 4g above is based on the SFPUC’s response to the Drought Risk Assessment (DRA)
required for UWMPs. The Department of Water Resources’ UWMP Guidebook requires: “A
detailed discussion of anticipated supply availability under a normal water year, single dry year,
and droughts lasting at least five years, as well as more frequent and severe periods of drought,
as described in the drought risk assessment.”
The SFPUC explains their methodology for addressing the Five-Year Drought Risk Assessment as
follows:
“In each demand scenario for 2030 through 2050, the SFPUC estimated RWS deliveries
using the standard SFPUC procedure, which includes adding increased levels of rationing
as needed in dry years to balance the demands on the RWS with available water supply.
7
The five consecutive dry-year sequence shown in the tables below represent years 2
through 6 of the design drought.”
The rationing numbers provided by the SFPUC are extremely misleading because they don’t
provide sufficient context for water managers to determine whether extreme rationing is
justified. To be able to make an informed decision, one would need to know how much water
remains in storage at the end of each year.
Table YRA-1 below puts things in greater perspective. It features the full eight years of the
Design Drought and includes storage at the end of each year based on the rationing levels
presented by the SFPUC.
To put the storage figures in perspective, water demand in the SFPUC service area has been
under 200 (mgd) for the past 11 years. 200 mgd equals 224 thousand acre -feet (TAF). Using the
SFPUC’s UWMP drought scenario, at the end of the driest consecutive five-year sequence the
SFPUC would still have more than 600 TAF in storage – enough water to last 2.5 years, not
including water entitlements that would accrue during those years.
Table YRA-1. 8-year Design Drought, with the Bay Delta Plan in effect, using SFPUC 2050
demand projections, and including storage.
Design Drought Fiscal Years
Source: Yosemite Rivers Alliance (using data provided by the SFPUC).
• “RWS” is “Regional Water System” (includes all SFPUC customers in San Francisco, San Mateo, Santa Clara
and Alameda Counties).
• Table starts with SFPUC 2050 UWMP baseline demand of 215.1 mgd in 1986 -87, and assumes 32%
rationing in Year 2, and 43% rationing in Years 3-8 (per SFPUC figures). Mgd is converted to thousand
acre-feet (TAF) per year in the second row.
• Storage at the beginning of the Design Drought is 1,517 TAF (per the SFPUC). This storage level is higher
than the maximum appearing in other documents because the SFPUC’s water bank at Don Pedro
Reservoir is allowed to encroach into “flood storage” during the summer, but must be evacuated by
October 1. This explains the high level of “Annual impact on storage” for 1986-87.
8
• “Annual impact on storage” is a calculation of SFPUC water entitlements, minus demand, minus other
system losses (everything is accounted for).
• Fiscal Year 92-76 is where the two droughts that make up the Design Drought on blended. It includes the
second half of 1992 and the first half of 1976.
Table YRA-2 below shows what the five consecutive dry year sequence would look like if the
SFPUC followed the letter of the UWMP Guidebook and just looked at their driest consecutive
five-year sequence. You’ll see that without any rationing, the SFPUC could manage the drought
with the Bay Delta Plan in effect, and still have water remaining in storage. In fact, almost
enough water in storage to last a sixth dry year.
Table YRA-2 – Regional Water System supply availability based on the six-year drought of
record using the SFPUC’s 2050 baseline demand projection of 215.1 mgd. Table assumes the
Bay Delta Plan is in effect. Table does not incorporate any rationing.
Source: Yosemite Rivers Alliance (using data provided by the SFPUC).
After the driest five-year sequence on record, the SFPUC would still have 217 TAF of water in
storage. Instead of showing 32% rationing in Year 1 and 43% rationing in Years 2 through 5,
Palo Alto’s UWMP could show that 100% of demand could be met in all five years, and this is
without any rationing.
Table YRA-3 is similar to Table YRA-2, except it assumes 10% rationing in Years 3 and 4, and 20%
rationing in Years 5 and 6. Note that in this scenario the SFPUC can manage the driest
consecutive six-year sequence (the drought of record), exceeding the UWMP requirement.
9
Table YRA-3 – SFPUC water supply based on the drought of record, using SFPUC 2050 UWMP
demand projections, with the Bay Delta Plan in effect. 10% rationing in Years 3 and 4, and 20%
rationing in Years 5 and 6.
Source: Yosemite Rivers Alliance (using data provided by the SFPUC).
Thank you for the opportunity to share some background on our water situation. I hope it will
help as you finalize our UWMP. I’d be happy to chat with anyone who’s interested.
Sincerely,
Peter Drekmeier
Policy Director
peter.drekmeier@yosemiterivers.org
10
Attachment A
Slides Addressing Water Demand and Cost
Source: Mid-Peninsula Water District
The wholesale water rate in FY 2007-08 was $1.30 per CCF. The SFPUC just adopted a wholesale rate of
$6.23 per CCF for FY 2026-27. Rates will have increased 479% in just 19 years.
Source: SFPUC
The increasing cost of water has played a major role in driving down demand and sales.
11
Source: SFPUC budget meeting, January 12, 2026
The SFPUC is carrying a huge debt load. As a result, the cost of water will continue to increase
substantially for decades to come.
Source: SFPUC Wholesale Rate Presentation, April 28, 2026
The cost of water will increase much more in FY 2026-27 than previously projected. Due to the death
spiral, this will likely become the norm.
12
Attachment B
Is the Design Drought Prudent?
While Valley Water, the East Bay Municipal Utilities District (EBMUD) and other large water
agencies use the 1987-92 drought for planning purposes, the SFPUC has manufactured a Design
Drought that is 72% more severe. The Design Drought arbitrarily combines the two worst
droughts from the 20th Century – 1987-92 and 1976-77 -- to create an artificial megadrought.
The SFPUC’s Long-Term Vulnerability Assessment (LTVA), along with related materials
uncovered through a Public Records Act request, provide strong indications that the Design
Drought is beyond conservative. You’ll see from Table 3-95 that the 1987-92 drought produces a
deficit of 707 thousand acre-feet (TAF) while the 1976-77 drought produces a deficit of 510
TAF. Deficit is the difference between water entitlements and demand. It can be thought of as
water that must come out of reservoir storage. To put this in perspective, total SFPUC storage is
1,471 TAF6, with 1,375 TAF being easily accessible.
5 LTVA, p. 70.
6 See SFPUC 2025 UWMP, Table 3-1.
13
Table 5-1 shows return periods (how often we might expect a drought) for the three main
observed droughts. The LTVA found “no clear direction of change in mean annual precipitation
over the planning horizon,” which is why the first set of numbers is highli ghted (red box added).
Note that these return periods are based on Regional Water System (RWS) demand of 269
thousand acre-feet (as is Table 3-9), which is 240 million gallons per day (mgd). Demand last
year was 191 mgd.
Source: LTVA, p. 157
We’ve asked many times why the LTVA did not include a return period for the Design Drought,
and have been told by SFPUC staff that such a calculation would be difficult to produce.
Through a Public Records Act request, we received the following table from a presentation
given by the LTVA authors to SFPUC staff in December 2020 (one year prior to the release of
the final LTVA). Note that the deficit for the Design Drought is 1,309 thousand acre feet (TAF),
compared to significantly shorter return periods for the known droughts. Like the tables above,
the figures are based on RWS demand of 240 mgd.
This table shows a return period for the Design Drought of 25,000 years.
14
SFPUC staff were quick to point out that the return periods in the draft table were adjusted
downward significantly for the final LTVA (Table 5-1). Therefore, we adjusted the 25,293 figure
proportionally. The following table shows the result.
Source: Yosemite Rivers Alliance
The “2020 Report” column lists the numbers from the draft table, and “LTVA” lists the final
numbers. “LTVA/2020” is the percentage of the original numbers that ended up in the final
report. The combined Design Drought (1987-92 plus 1976-77) was reduced to 31% of the draft
numbers. 31% of 25,293 years is 7,841 years, which is where the once -in-8,000 years return
period for the Design Drought originates.
However, once-in-8,000 years is the very low end for the Design Drought return period. You’ll
see from LTVA Figure 5-11 below that the relationship between Cumulative Deficit and Return
Periods is logarithmic. As droughts get more severe, the return period becomes much greater.
The deficits for the known droughts were included on this graph. Superimposed on the graph is
a line for the cumulative deficit for the Design Drought (1,309 TAF), which suggests a return
period of once-in-70,000 years. As a side note, the red and blue lines reflecting higher
temperatures expected from climate change are above the black line, meaning return periods
get longer as temperatures increase.
15
Figure 5-11. Effect of Temperature Change on the Drought Severity Frequency
Source: LTVA, p. 157
Following is one more example of how the Design Drought is way too extreme and why it
should be revised. The graph is based on 100 years of observed data, 1,100 years of tree ring
data, and 25,000 years of simulated model data. The horizontal axis depicts drought deficits –
the further to the right, the more severe the droughts. The vertical axis depicts the number of
droughts. The red line was inserted to show the deficit for the Design Drought (1,309 TAF).
You’ll see that the LTVA did not identify or produce a single drought even close to the severity
of the Design Drought.
16
Source: LTVA, p. 73
It’s obvious the SFPUC doesn’t want to address the return period for the Design Drought.
Reducing its severity even modestly would significantly undermine their extreme rationing
scenario, which is their primary argument for opposing the Bay Delta Plan.
By using a drought model without an associated risk assessment, the SFPUC is failing its
customers, particularly when well researched academic data is available. The SFPUC is
misleading the public, claiming there’s a chance of 30%, 40% or greater rationing in the future.
The layperson will not know how artificial such rationing projections are, but will pay the price.
17
Attachment C
Irrational Fear of Water Shortages
Leads to Budget Deficits and Rate Increases
Example: SFPUC Water Shortage Emergency Declaration (2021)
November 2021: Following two dry years, the SFPUC declared a Water Shortage Emergency and called
for systemwide water use reductions. At the time of the declaration, the SFPUC had more than a million
acre-feet of water in storage (see below) – enough to last 4.5 years.
April 2022: The SFPUC imposed a 5% drought surcharge on San Francisco retail customers to make up
for lost sales. Wholesale customers enacted their own measures.
Early December 2022: SFPUC storage was at a drought low-point of 932 thousand acre-feet – still
enough water to last 4 years.
January 2023: After extremely heavy precipitation in December and January, it was clear the SFPUC
would achieve full storage. On January 17, storage was at 1.35 million acre -feet.
May 2023: The SFPUC finally lifted the drought surcharge, but not before it was built into their FY 2023-
24 budget. That budget experienced a $25 million shortfall in retail (San Francisco) water sales and a $5
million shortfall in wholesale (BAWSCA) sales.
Source: SFPUC Drought Conditions Update, December 6, 2021.
18
SFPUC storage hit its lowest point of the drought in early December, 2022, but there was still enough
water to last four years.
Source: SFPUC Drought Conditions Update, December 5, 2022.
By mid-January 2023, SFPUC storage had already reached 92% of capacity and snowpack accumulation
was on a record-setting pace. The drought was clearly over.
Source: SFPUC Drought Conditions Update, January 17, 2023.
19
Snowpack can be considered “water in the bank,” and it was clear there would be a tremendous amount
of runoff in the spring to top off all the reservoirs with lots of water to spill.
Source: SFPUC Drought Conditions Update, January 17, 2023
The SFPUC Water Enterprise was headed toward a large budget deficit in FY 2023-24 – it ended up being
$25 million in lost retail (San Francisco) revenues and $5 million in lost wholesale (BAWSCA) revenues.
Here’s how it was explained:
“Water and Wastewater: revenues are projected to be below budget. The budget was adopted
assuming the drought surcharge would remain. It was removed May of 2023. Additionally, the
wholesale water volumes are lower than expected.”7
Why did the SFPUC wait until May to lift the drought surcharge, and why did they assume it would
remain in place for another year despite the extremely wet beginning to 2023?
How did the Water Supply Emergency and call for water conservation impact Palo Alto Utility finances
and water rates?
Was it prudent for the SFPUC to declare a Water Supply Emergency when they had 4.5 year’s -worth of
water in storage? The Design Drought suggests it was.
7 SFPUC FY 2023-24 1st Quarter Budget Report, December 12, 2023 –
https://sfpuc.sharefile.com/share/view/se1f88d7d5b3a41829939713649bc1802
20
Source: SFPUC FY 2023-24 4th Quarter Budget Report, September 24, 2024 –
https://sfpuc.sharefile.com/share/view/s297e2428d54946e5a39c984791d83b82
Based on the following graph, was it reasonable for the SFPUC to wait until May to lift their drought
surcharge?
Source: SFPUC Water Supply Conditions Update, October 2, 2023 –
The SFPUC ended the water year entitled to enough water (2.77 million acre-feet) to refill all of their
reservoirs almost twice.
21
Attachment D
SFPUC Financial Plan
From:Star Teachout
To:Council, City
Cc:Grand, Linda
Subject:Include Water Consumption comparisons in utility bills
Date:Monday, June 1, 2026 2:53:54 PM
CAUTION: This email originated from outside of the organization. Be cautiousof opening attachments and clicking on links.
Hello council members,
I’m am commenting on item 13 for the June 8 city council meeting: • PUBLIC HEARING:
Adopt a Resolution Adopting the 2025 Urban Water Management Plan and a Resolution
Adopting the 2025 Water Shortage Contingency Plan. CEQA Status: Exempt under Water
Code Sec. 10652.
The City carries out various seasonal and general water conservation campaigns via the use
of print and digital advertisements, utility bill inserts, social media,
email newsletters, and dynamic content such as through videos. Palo Alto also regularly
updates the City’s website on water conservation programs and public workshops
Our family operates as much as possible as if we were in a drought. We collect our shower
water and use it to flush our toilets because it is not that inconvenient. We probably are in the
lowest consumption category, and are motivated to do this so we can divert our water to our
redwood and fruit trees. I understand that some people can’t be bothered and would rather just
pay more for their water usage, but I do think more people would reduce their water
consumption if given better information. Comparisons are very helpful in changing habits.
With many people using autopay/online for water bills, people often have no idea how many
gallons they are using, and have no idea how their consumption compares to others. The bill
is simply paid.
Here is a prior suggestion which may be more relevant with the current water supply issues we
face:
To the utility bill, include examples:
- The avg 2-person household* in Palo Alto used __ gals this month.
- The avg 4-person household in Palo Alto used __ gals this month.
- The avg 2-person household in your neighborhood used __ gals this month. **
- The avg 4-person household in your neighborhood used __ gals this month.
*It would be great to separate out apartment/townhouse dwellers from those in single family
homes but not sure that information is available.
** Neighborhood could be defined as some radial distance, or by zip code.
Regards,
Star Teachout
Barron Park
2025 Urban Water Management Plan & Water Shortage Contingency Plan
City Council
June 8, 2026 www.paloalto.gov
2
BACKGROUND
•The City has been filing Urban Water Management Plans (UWMP) since 1985. The State
requires cities to adopt an UWMP every five years demonstrating water supply reliability
over a 20-year planning timeframe based on development plans in normal, dry and
multiple dry years.
•2025 UWMP must be adopted by City Council and submitted to the DWR by July 1, 2026.
•Palo Alto must have a current UWMP on file to be eligible for any water grant or loan
administered by the California Department of Water Resources (DWR) and the State
Water Resources Control Board.
•City is drawing up to $192 million, on a reimbursement basis, from a State Revolving
Fund loan at 0.8% interest to finance the Secondary Treatment Upgrades project at
the Regional Water Quality Control Plant.
3
WHAT UWMP IS AND IS NOT:
•Follows prescriptive California Water Code
regulatory requirements
•Palo Alto must demonstrate that it can meet
future demands associated with growth
•Growth based on Palo Alto planning
requirements for Regional Housing Needs
Allocation and Housing Element
•Required components: water demand
analysis, water supply reliability assessment,
Water Shortage Contingency Plan (WSCP)
•100% of Palo Alto’s Water Supply is from
SFPUC’s Regional Water System
•Not a contractual or legal agreement
•Not a long-term commitment to a
particular demand forecast or
alternative water supply investment
•Not a rate-setting document
4
PALO ALTO WATER DEMAND
City of Palo Alto Water Supply Purchases – Actual and Forecast Water Sales by Customer Class (FY 2025)
5
WATER SHORTAGE CONTINGENCY PLAN (WSCP)
Plan Stage Target Water
Savings
I Up to 10%
II 10%-20%
III 20%-30%
IV 30%-40%
V 40%-50%
VI >50%
Actions tailored to each stage including:
▪Information Outreach and Audit Program
▪Demand Side Management Programs
▪Rate Structures
▪Water Use Restrictions
Restrictions escalate by stage:
▪Stage I: Basic waste prevention
▪Stages II-V: Increasing limits on irrigation
and other nonessential uses
▪Stage V: No new water service
connections are permitted unless offset
▪Stage VI: Water use for health and safety
only, with limited irrigation for trees
6
2025 UWMP AND WSCP ADOPTION SCHEDULE
•March 31 – UAC discussion of preliminary information on the UWMP and WSCP
•May 6 – UAC approved the UWMP, WSCP, did not recommend revisions, and voted to attach
Commissioner Gupta’s companion memo for awareness (Attachment C)
o Substitute Motion to add seven edits from Commissioner Gupta’s memo failed 2-4-1
o Substitute Motion to submit Commissioner Gupta’s Companion Memo to the City Council as
additional information passed 4-1-1-1
•June 8 – Council Review and Adoption
•July 1 – Deadline to file with California Department of Water Resources
The City of Palo Alto’s Draft 2025 UWMP and WSCP can be viewed at:
https://www.paloalto.gov/Departments/Utilities/Water/Water -Resources/Urban-Water-
Management-Plan
7
RECOMMENDED MOTION
Recommendation to Adopt a Resolution Adopting the 2025 Urban Water Management
Plan and a Resolution Adopting the 2025 Water Shortage Contingency Plan. CEQA
Status: Not a project.
www.paloalto.gov
QUESTIONS & DISCUSSION