City of East Palo Alto Secures Additional Water Supplies

The City of East Palo Alto has entered an agreement to purchase a permanent supply of 1 MGD (approximately 1,120 AF/year) from the City of Mountain View. Because both cities are members of the Bay Area Water Supply and Conservation Agency and receive water from the San Francisco Public Utilities Commission (“SFPUC”), the water will be delivered using existing infrastructure.

East Palo Alto is purchasing the water to make up for a supply shortfall. Over the last 15 years, the city has used an average of 92% of its 1.963 MGD (approximately 2,199 AF/year) allocation from SFPUC and has exceeded that amount in some years. Because of the nearly full use of the existing allocation, along with growth projected in the city’s general plan, East Palo Alto has identified a need for an additional 1.5 MGD, declared a water shortage, and imposed a moratorium on new development. The city is also rehabilitating an existing well and developing a second well to diversify its portfolio and provide an emergency supply. A five-year cost analysis by the city shows that cost of the water transfer is 12% higher than the capital costs of the wells. The city, however, prefers the water transfer for its primary supply because of timing, operational risks, and other concerns, as well as the need for additional infrastructure and higher treatment levels to address the mineral concentration in the groundwater.

The water is excess to water needs in Mountain View, which also receives water from Santa Clara Valley Water District and as a result has a term in its contract with SFPUC requiring a minimum annual purchase, regardless of whether the water is needed. The minimum was suspended during the drought emergency, but Mountain View now estimates costs of $8.5 million over the next four years to comply with the minimum purchase requirement. Selling a portion of their supply to East Palo Alto helps offset those costs.

East Palo Alto will pay $5 million (approximately $4,464/AF) for the water. Funding is being provided from various sources, but will later be recouped by a water capacity fee that staff anticipate will be approved by the city council this fall.

  • $1.53 million will be provided by three entities who had projects put on hold due to the development moratorium. Each entity’s share of the cost is based on their water demand. Payment does not guarantee project approval, but addresses the water shortage and allows staff to resume the review process. These payments will be credited against the entities’ future water capacity fees.
  • $1 million will be provided by Sobrato Organization (one of the entities whose projects were stalled). This funding is in addition to the pro-rata funding noted above and will be refunded from the water capacity fees.
  • $2 million will be provided as a gift from the Chan Zuckerberg Initiative (“CZI”), an entity working to advance affordable housing. These funds will be deposited into a designated city fund that will be replenished by the water capacity fees.
  • The remaining $470,000 will come from the city’s general fund. Like the gift from CZI, these funds will go into a designated city fund that will be replenished by the water capacity fees.


Written by Marta L. Weismann