The proposed advanced purification facility would occupy a site at 1237 San Antonio Road, near the Mountain View border. Courtesy Valley Water.
A regional water supply deal that split Palo Alto’s Utility Advisory Commission in June secured this week the unanimous backing of the City Council, with members concluding that the water needs of neighboring Mountain View outweigh commissioners’ concerns about transparency and long-term drought planning.
The water contract is one that 26 jurisdictions, represented by the Bay Area Water Supply and Conservation Association, maintain with the San Francisco Public Utilities Commission. BAWSCA and SFPUC have been in negotiations for nearly three years to amend their contract, with a focus on revising the minimum amount of water cities have to purchase each year.
Mountain View, which voted to approve the new contract last month, has been fined over $11 million in the past few years for not using enough water. But the new contract spreads the burden of minimum water purchase so that no individual city can be fined, as long as the four wholesale customers that import water from sources outside the SFPUC collectively meet their minimum allotment.
“To penalize Mountain View for being so good at conserving water is really just not the type of public policy that we should be supporting,” said Council member Greer Stone, who also represents Palo Alto on BAWSCA.
The minimum purchase changes could marginally raise water rates for Palo Alto customers: by between 0.13% and 0.72%, according to Utilities Department staff.
For Palo Alto officials, the trade-off is worth it — especially to save neighboring Mountain View from hefty fines year after year, council members said.
Mountain View Council member Pat Showalter, who sits on the BAWSCA board, said a key goal of the agreement is supporting water conservation, a principle that all agencies hold dear. Reforms to the minimum purchase requirement would benefit all agencies, not just her city. She cited her ongoing partnership with Palo Alto on constructing an advanced purification plant, a project that is now under construction.
“You heard a lot about why that is a big benefit to Mountain View but it will spill over, because we will have more money to spend on water systems,” Showalter said at the Palo Alto council meeting.
Another amendment in the contract includes moderate increases to water cutbacks for droughts. In Palo Alto, a moderate drought would require customers to reduce water usage by 18% (currently, it’s 16%) while a severe one would require a cutback of 28% (up from 22% in the current contract.
But city officials praised the deal for prioritizing basic indoor needs when it comes to water use. In practice, residents would be asked to cut back on watering their lawns before being asked to take shorter showers.
The cost impact to our rate payers is going to be negligible, but I think the benefit to regional fairness, drought preparedness and long-term water reliability is substantial,”
greer stone, palo alto council member
The new contract also creates a transition period in the year after a drought where penalties won’t be issued for cities failing to purchase their minimums from SFPUC. This is to account for customers who continue to conserve water in the months after a drought formally ends.
Assistant Director of Utilities Karla Dailey described the changes to the contract as “no downside amendments.”
Palo Alto is now the fourteenth jurisdiction to approve the water deal, leaving just 12 outstanding. Tom Smegal, BAWSCA’s general manager, told the council that the process was not controversial in other cities, with about half approving the contract as part of a consent calendar package that involved no discussion or dissent.
But members of the Utilities Advisory Commission on Monday appeared as skeptical about the amendments as they were earlier this year. Their overwhelming concern is that the SFPUC cannot be trusted to accurately predict the amount of cutbacks necessary during a drought, and often overprojects cuts to the detriment of residents around the Bay Area.
“They’ve given us one model, one set of assumptions, one design drought that I call a Frankenstein of worst case scenarios layered on top of each other,” said Chris Tucher, a member of the UAC who was speaking in a personal capacity at the meeting. “[SFPUC has] refused to be transparent or provide any kind of sensitivity analysis, any background data, any alternate scenarios so that we can make informed decisions.”
UAC member Utsav Gupta also voiced concerns about the new contract’s encouragement of alternative water supplies, a catch-all term to describe projects such as rainwater harvesting or desalination. The issue with these projects is their prohibitive upfront cost, which could cause intense rate spikes in the future, particularly if demand falls for these alternatives, Gupta said.
Despite opposition from members of the public, Vice Mayor Vicki Veekner said the decision to support the deal was also a pragmatic one: If the council did not approve it Monday night, the vote would be kicked back to BAWSCA or the SFPUC to ultimately decide.
“The cost impact to our rate payers is going to be negligible, but I think the benefit to regional fairness, drought preparedness and long-term water reliability is substantial,” Stone added.
Riley Cooke is a reporter at Palo Alto Weekly and Palo Alto Online focusing on city government. She joined in 2025 after graduating from UC Berkeley with a bachelor's degree in political science.
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