HomeMy WebLinkAboutReso - CC - 022-2022DocuSign Envelope ID: ED37606B-7DDE-4EOB-BE03-6A8D3FB8ED7B
RESOLUTION NO. 022-2022
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME
APPROVING AN AMENDMENT TO THE WATER SUPPLY AGREEMENT BETWEEN
THE CITY AND COUNTY OF SAN FRANCISCO AND WHOLESALE CUSTOMERS IN
ALAMEDA COUNTY, SAN MATEO COUNTY, AND SANTA CLARA COUNTY
WHEREAS, water supply agencies in Alameda, San Mateo, and Santa Clara Counties
have purchased water from the City and County of San Francisco (San Francisco) for many years;
and
WHEREAS, the San Francisco Public Utilities Commission (SFPUC or Commission)
operates the Regional Water System, which delivers water to communities in Alameda, San
Mateo, and Santa Clara Counties, as well as to customers within San Francisco (collectively, "the
Parties"); and
WHEREAS, the Parties entered into the "Settlement Agreement and Master Water Sales
Contract between the City and County of San Francisco and Certain Suburban Purchasers in San
Mateo County, Santa Clara County and Alameda County" in 1984 (1984 Settlement Agreement
and Master Water Sales Contract); and
WHEREAS, in April 2003, water supply agencies in Alameda, San Mateo and Santa Clara
Counties (collectively referred to as the "Wholesale Customers" or "BAWSCA member agencies")
established the Bay Area Water Supply and Conservation Agency (BAWSCA), as authorized by
Water Code Section 81300 et seq.; and
WHEREAS, upon expiration of the 1984 Settlement Agreement and Master Water Sales
Contract, the Parties entered into the "Water Supply Agreement between San Francisco and
Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County" (Water
Supply Agreement or WSA) on July 1, 2009, authorized by SFPUC Resolution No. 09-0069, dated
April 28, 2009; and
WHEREAS, in 2017, the Wholesale Customers directed BAWSCA to act as its authorized
representative in discussions and negotiations with San Francisco to amend the Water Supply
Agreement to address a number of substantive issues and these negotiations resulted in the
Parties' adoption of the Amended and Restated Water Supply Agreement (Amended and
Restated Water Supply Agreement) in 2018, authorized by SFPUC Resolution No. 18-0212,
dated December 11, 2018; and
WHEREAS, in 2019, this Council, by Resolution No. 017-2019, approved the Amended
and Restated Water Supply Agreement; and
WHEREAS, under Article 3 of the Amended and Restated Water Supply Agreement, the
SFPUC agrees to deliver water to the Wholesale Customers up to the amount of 184 million
gallons per day (MGD), referred to as the "Supply Assurance," and the Wholesale Customers
have allocated shares of the Supply Assurance among themselves, referred to as Individual
Supply Guarantees ("ISG"); and
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WHEREAS, Section 3.04 of the Amended and Restated Water Supply Agreement enables
a Wholesale Customer that has an ISG to transfer a portion of its ISG to one or more other
Wholesale Customers, subject to several conditions; and
WHEREAS, under Section 3.07 of the Amended and Restated Water Supply Agreement,
four Wholesale Customers (Alameda County Water District and the Cities of Milpitas, Mountain
View, and Sunnyvale, collectively, the "Minimum Purchase Customers") may purchase water from
sources other than the SFPUC, but they are each obligated to purchase a specific minimum
annual quantity of water from the SFPUC, referred to as a "Minimum Purchase requirement"; and
WHEREAS, if a Minimum Purchase Customer does not meet its Minimum Purchase
requirement in a particular fiscal year, it must pay the SFPUC for the difference between its
metered water purchases during the fiscal year and its minimum annual purchase quantity set
forth in Attachment E of the Amended and Restated Water Supply Agreement; and
WHEREAS, the Amended and Restated Water Supply Agreement does not currently
allow a Minimum Purchase Customer to transfer a portion of its Minimum Purchase requirement
and the associated financial obligation to another Wholesale Customer; and
WHEREAS, in September 2017, BAWSCA and the Water Management Representatives
(WMRs) of the BAWSCA member agencies began reviewing the issue of Minimum Purchase
Quantities, as described in Section 3.07.0 of the Water Supply Agreement, and discussing the
creation of a process to transfer Minimum Purchase Quantities; and
WHEREAS, throughout 2017 and 2018, the WMRs held multiple meetings during which
the agencies currently subject to Minimum Purchase Quantity requirements and the other
Wholesale Customers shared their interests and concerns regarding changes to the Minimum
Purchase Quantity requirements and allowing transfers of Minimum Purchase Quantities; and
WHEREAS, at the time the Amended and Restated Water Supply Agreement was
approved, the Parties expressed a collective interest in working together to develop a process for
the expedited and permanent transfer of Minimum Purchase Quantities; and
WHEREAS, in 2019, the Wholesale Customers directed BAWSCA to draft a proposed
amendment to the Amended and Restated Water Supply Agreement to provide a procedure for
expedited and permanent transfers of Minimum Purchase Quantities that safeguards the financial
and water supply interests of Wholesale Customers not participating in such transfers; and
WHEREAS, the Parties recognize that, both before and after the most recent statewide
drought, after meeting drought -related conservation mandates, several BAWSCA member
agencies were unable to meet their respective Minimum Purchase requirements described in
Article 3.07 of the Amended and Restated Water Supply Agreement, which requires payment for
water up to the required Minimum Purchase level even if such water is not delivered and used;
and
WHEREAS, several of the Wholesale Customers with Minimum Purchase requirements
might be interested in transferring a portion of their Minimum Purchase Quantity within their
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respective ISGs to reduce the financial obligation to pay for imputed sales for Minimum Purchase
water that is not used; and
WHEREAS, with its Alternative Water Supply Program, the SFPUC is in the early stages
of planning for fourteen projects to support the Wholesale and Retail Customers' ability to respond
to climate change and address future water supply challenges and vulnerabilities, such as
regulatory changes, earthquakes, disasters, emergencies, and increases in population and
employment; and
WHEREAS, the City of San Jose (San Jose) and the City of Santa Clara (Santa Clara)
are temporary, interruptible Wholesale Customers of the SFPUC Regional Water System and
both cities wish to become permanent Wholesale Customers; and
WHEREAS, pursuant to Section 4.06 of the Amended and Restated Water Supply
Agreement, by December 31, 2028, San Francisco must complete any necessary California
Environmental Quality Act (CEQA) review and must decide whether or not to make San Jose and
Santa Clara permanent Wholesale Customers of the Regional Water System with a combined
Individual Supply Guarantee (ISG) of 9 million gallons per day (MGD) allocated equally between
the two cities, as well as how much water in excess of 9 MGD it will supply to San Jose and Santa
Clara; and
WHEREAS, Section 4.06 of the Amended and Restated Water Supply Agreement
provides: "San Francisco will make San Jose and Santa Clara permanent customers only if, and
to the extent that, San Francisco determines that Regional Water System long term water supplies
are available;" and
WHEREAS, according to SFPUC's December 2021 Alternative Water Supply Planning
Quarterly Update (Quarterly Update), "[fjor San Jose and Santa Clara to become permanent
customers of the SFPUC, an additional 9 MGD of new, year-round supplies would be needed to
meet historic demand levels and up to 15.5 MGD would be needed to meet planned demand
through 2045;" and
WHEREAS, according to its December Quarterly Update, SFPUC is planning with the
"intention to be able to make San Jose and Santa Clara permanent customers," but is prioritizing
instream flow obligations to meet existing permanent customer demands, including drought
supplies; and
WHEREAS, SFPUC has budgeted $298.3 million over the next ten years to fund water supply
projects; and
WHEREAS, SFPUC, San Jose, Santa Clara, and BAWSCA are actively working together to
consider water supply projects that may offer potential sources of supply to support San Jose and
Santa Clara as permanent Wholesale Customers; and
WHEREAS, BAWSCA and SFPUC have identified intra-system water transfers as one
potential solution to long term water reliability needs among the Wholesale Customers; and
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WHEREAS, a Minimum Purchase Customer might be more inclined to transfer a portion of its
ISG to another Wholesale Customer under Section 3.04 of the Amended and Restated Water
Supply Agreement if it was able to include a simultaneous transfer of a portion of its Minimum
Purchase requirement and the associated financial obligation; and
WHEREAS, allowing simplified permanent intra-system transfers of portions of Minimum
Purchase Quantity and ISG will facilitate the development of new water supplies by SFPUC that
are necessary to support San Jose and Santa Clara as permanent Wholesale Customers; and
WHEREAS, the Parties have developed a process to allow for the transfer of a Wholesale
Customer's Minimum Purchase Quantity in conjunction with an ISG transfer pursuant to Section
3.04, which ensures that such transfers will not result in new or different risks to the water supply
and financial interests of Wholesale Customers not participating in a transfer; and
WHEREAS, the Parties agree that the total aggregate amount of Minimum Purchase Quantity
that may be transferred by all of the Wholesale Customers subject to Minimum Purchase
requirements as first specified in Attachment E of the Amended and Restated Water Supply
Agreement, over the course of one or multiple transfers, is limited to 6 MGD; and
WHEREAS, if demand for Minimum Purchase Quantity transfers exceeds 6 MGD in the future,
the Parties agree to consider further amending Section 3.04 of the Amended and Restated Water
Supply Agreement to increase the total aggregate cap on the amount of Minimum Purchase
Quantity that may be transferred; and
WHEREAS, a proposed transfer that does not meet the requirements of Section 3.04 of the
Amended and Restated Water Supply Agreement, as amended by this Resolution, may be
presented as an amendment to the Amended and Restated Water Supply Agreement pursuant
to Section 2.03 of the Amended and Restated Water Supply Agreement; and
WHEREAS, the Parties agree to consider a proposal by the City of Mountain View (Mountain
View) and the City of East Palo Alto (East Palo Alto) to amend the Amended and Restated Water
Supply Agreement to allow for the conversion of Mountain View's 2017 sale of 1 MGD of ISG to
East Palo Alto into a transfer of 1 MGD of Mountain View's ISG that includes Minimum Purchase
Quantity to East Palo Alto, over a period of time, and in a manner that protects the other
Wholesale Customers' financial and water supply interests; and
WHEREAS, if such a conversion is approved by the Parties, the 1 MGD of Mountain View's
Minimum Purchase Quantity would be counted towards the total aggregate 6 MGD cap on
Minimum Purchase Quantity transfers; and
WHEREAS, the Parties now desire to adopt an amendment to the Amended and Restated
Water Supply Agreement to permit Wholesale Customers with an ISG to transfer, or accept a
transfer, of both a portion of a Wholesale Customer's ISG and its Minimum Purchase Quantity;
and
WHEREAS, an updated Amended and Restated Water Supply Agreement, reflecting this
amendment, in the form negotiated by BAWSCA (2021 Amended and Restated Water Supply
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Agreement), was presented to and approved by SFPUC on January 26, 2021 pursuant to SFPUC
Resolution No. 21-0009; and
WHEREAS, the amendment considered now is not a "project" for the purposes of CEQA as
it involves an administrative activity that does not result in a direct change to the environment (see
14 CCR Section 15378(b)(5)), and would not result in a direct or reasonably foreseeable indirect
physical change in the environment (see 14 CCR Section 15060(c)(2)); and
WHEREAS, in the event the amendment is considered a "project," it would be subject to the
categorical exemption for operation, repair, and maintenance of existing facilities (see 14 CCR
Section 15301) and the amendment does not implicate substantial changes that involve a new
significant environmental effect (see 14 CCR Section 15162(a)).
NOW, THEREFORE, BE IT RESOLVED that the Council finds as follows:
1. The City of Burlingame approves the modifications included in the attached "Amended and
Restated Water Supply Agreement Between the City and County of San Francisco
Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County"
dated January 2021 (Amended and Restated Water Supply Agreement).
2. The City Manager is authorized and directed to sign the Amended and Restated Water
Supply Agreement, in the form previously approved by the San Francisco Public Utilities
Commission and attached hereto.
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Ricardo Ortiz, Mayor
I, MEAGHAN HASSEL-SHEARER, City Clerk of the City of Burlingame, do hereby certify
that the foregoing Resolution was introduced at a regular meeting of the City Council held on the
21 st day of March, 2022, and was adopted thereafter by the following vote:
AYES:
COUNCILMEMBERS: BEACH, BROWNRIGG, COLSON, O'BRIEN KEIGHRAN, ORTIZ
NOES:
COUNCILMEMBERS: NONE
ABSENT:
COUNCILMEMBERS: NONE
Meaghan Hassel -Shearer, City Clerk