Agenda packet — Brisbane City Council, July 15, 2025

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CITY of BRISBANE
Tuesday, July 15th, 2025 at 2:00PM ● Hybrid Meeting
Brisbane City Hall 25 Park Place, Brisbane, CA
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Infrastructure, Franchise, Utilities
Subcommittee Agenda
1 - 2 -
SUBCOMMITTEE MEMBERS:

Mayor Lentz, Councilmember O’Connell

ROLL CALL
A. Consider any request of a City Councilmember to attend the meeting remotely under the “Emergency Circumstances” of AB 2449

PRESENTATIONS AND DISCUSSION ITEMS
B. Bay Area Water Supply & Conservation Agency (BAWSCA) Presentation of Recommended Water Supply Agreement Amendments and Updated Tier 2 Drought Response Implementation Plan

PUBLIC COMMENT

ADJOURNMENT
2 File Attachments for Item:

B. Bay Area Water Supply & Conservation Agency (BAWSCA) Presentation of Recommended Water Supply Agreement Amendments and Updated Tier 2 Drought Response Implementation Plan
3 Proposed Water Supply Agreement
(WSA) Contract Amendment
Regarding the Minimum Purchase
Quantity (MPQ)
December 2024
What is the Minimum Purchase Requirement?
As early as the 1960s, four agencies with access to sources of supply not available to either San Francisco or the other Wholesale Customers were required to purchase a “minimum annual quantity of water” from the San Francisco Regional Water System (RWS).

The Minimum Purchase requirement guarantees an ongoing
financial stake in the RWS and provides year-to-year financial stability for the RWS.

To encourage water conservation during droughts, MPQs are waived.

Proposed Amendment
The proposed amendment has three
components:

1. MPQ Reset
 MPQ reset at 80% of average SFPUC use
from previous four non-drought years.
 Review every 10 years.

2. MPQ Family Plan
 Imputed sales will only be applied if the
Minimum Purchase Agencies collectively
use less than the sum of MPQ.

3. Drought Rebound
 One-year drought rebound MPQ set at the
mid-point between drought use and MPQ.
10 MGD
8 MGD 9 MGD
0 2
4 6
8 10
12 MPQ Drought
SFPUC Use
1-Yr Drought
Rebound MPQ
MGD
Example 1-Yr Drought Rebound
Policy Considerations Driving the Minimum
Purchase Amendment
 Acknowledge MPQ agencies' efforts toward permanent
conservation and recycled water, while protecting the RWS from supply shifting based on cost.
 Reflect a realistic demand recovery period after droughts.  Ensure cost impacts are shared between SF Retail and
Wholesale Customers.
 Establish a process to prevent the current issues from recurring.

Why is the Minimum Purchase Amendment
Needed?
The Minimum Purchase Quantities (MPQs) are no longer
achieving their intended purpose given today’s conditions.  Droughts, investments in water use efficiency, and
development of local supplies have reduced demand on the RWS.
 The RWS is currently subject to severe drought and the SFPUC is investigating alternatives.
 MPQ agencies are well situated to develop local, drought resilient supplies, which improves reliability of the RWS for all users.
 Current MPQs disincentivize investments in local supplies. 0 2
4 6
8 10
ACWD Milpitas Mountain
View
Sunnyvale

7.65 5.34

8.93 8.93

6.68 4.37

6.05 7.41
MGD
Current and Proposed MPQs
4 Current MPQ Proposed MPQ
B.

How does the Minimum Purchase Agencies’
SFPUC use today compare to MPQs set in the
1980s?
Long-term investments in recycled water and water
use efficiency have lowered demand on the RWS.

Reductions in water use in response to SFPUC and
state mandates for wise water use during droughts
often persist for several years after restrictions are
lifted. While MPQs are waived during droughts, they
are reinstated immediately afterward, even though
demand may take several years to rebound to predrought levels.

During the four non-drought years between the 2015-
17 and the 2021-23 drought, the Minimum Purchase
Agencies’ collectively RWS purchases were at or
below the total MPQ in all but one year.

More specifically, Mountain View’s total water use from all potable supplies was below its MPQ in eight of the
last 11 years (i.e., Mountain View doesn’t have the
demand in its service area to use the minimum amount
of water it’s required to purchase from the RWS).

What are the key Protections for the
Wholesale Customer Provided by the
Proposed Amendment?
Maintains purpose of the Minimum Purchase
requirement:
 Ensures that Minimum Purchase Agencies don’t
shift purchases away from the RWS.

Improves the reliability of the RWS for all users:
 Allows Minimum Purchase Agencies to develop
local supplies, reducing demand on the RWS.
 Extends duration that the 184 MGD Supply
Assurance will meet Wholesale Customer
demand.
 Cost shared proportionately between San
Francisco and Wholesale Customers.

Enhances future stability of the WSA:
 Aligns intent of different sections of the WSA
regarding development of local supplies while
maintaining financial stability of the RWS.

What are the impacts to the WSA?
Cost Analysis
Given proportional allocation of costs based on
purchases from the RWS, future analysis is imprecise
(i.e., unit cost of water is based on variables that are hard to predict, such as total purchases).

Based on historical analysis, the cost increase of the
amendment, in non-drought years, may be between
$0.007 to $0.040 per ccf (0.13% to 0.72%). There is
no impact in drought years.

Benefits Analysis
Removes barrier for MPQ agencies to develop
drought-resistant local supplies, which improves
reliability of the RWS and benefits all RWS users.

Ensures agencies are not charged for unused water.

Why is this Minimum Purchase amendment
moving forward with the Tier 2 Plan?
The updated Tier 2 Plan imposes higher drought
cutbacks on Minimum Purchase Agencies, further
reducing RWS use below their MPQs and increasing
the risk of paying for unused water once the drought
restrictions are lifted. The proposed WSA
amendment addresses this issue and other longstanding concerns raised by the Minimum Purchase Agencies.
0 5
10 15
20 25
30 35
MGD
Collective MPQ vs. SFPUC Use
SFPUC Use Drought Year Current MPQ
0 2
4 6
8 10
12 MGD
Mountain View Total Water Use
SFPUC SCVWD Wells
Recycled MPQ
5 B.

Droughts on the San Francisco Regional Water
System (RWS) are governed by two plans:

The Tier 1 Plan allocates RWS water between San Francisco retail customers and the Wholesale Customers collectively.

The Tier 2 Plan is the method for allocating the Wholesale Customers’ share of RWS supply among the 26 Wholesale
Customers.

Tier 1 and 2 Plan Implementation
Following declaration of a water shortage emergency by the San Francisco Public Utilities Commission (SFPUC), the SFPUC calculates the Tier 1 allocations. Then BAWSCA calculates each Wholesale Customer’s individual allocation by applying the methodology in the Tier 2 Plan.

For the duration of the water shortage emergency, the SFPUC provides monthly reports to Wholesale Customers and
BAWSCA, tracking actual water usage against drought
allocations and detailing any transfers of shortage allocations or banked water among agencies.

The Tier 1 and Tier 2 Plans were implemented for the first time ever during the 2021-23 drought.

Tier 1 and Tier 2
Drought Allocation
Plans
December 2024
SF Retail
Share
Wholesale
Customer
Share
Application and Adoption of the
Tier 1 and Tier 2 Plans
The Tier 1 and Tier 2 Plans only apply during
system-wide water shortages caused by
drought of 20% or less.

The Tier 1 Plan is contained in the Water
Supply Agreement between San Francisco
and the Wholesale Customers (WSA).

Changes to the Tier 1 Plan require an
amendment to the WSA.

The existing Tier 2 Plan was adopted in
2011 and set to expire in 2018. Since 2018,
the BAWSCA Board has annually extended
the existing Tier 2 Plan while the Wholesale
Customers developed a revised Tier 2 Plan.

The Tier 2 Plan must be unanimously
adopted by the 26 Wholesale
Customers. Under the WSA, San
Francisco must provide allocations of
water unanimously agreed to by all
Wholesale Customers or adopted by the
BAWSCA Board. (WSA Section 3.11.C) If a
Tier 2 Plan is not adopted by the BAWSCA
Board, San Francisco may make a final
allocation decision.

Tier 1 Plan Tier 2 Plan
21335941.6
6 B.

Tier 1 Shortage Allocation Plan Update
The Tier 1 Shortage Allocation Plan (Tier 1 Plan)
allocates RWS supplies between San Francisco
retail customers and the Wholesale Customers
collectively and outlines the administrative
process for drought allocations, including
timelines, transfers of shortage allocations, and
excess use charges.

San Francisco and the Wholesale Customers
agreed to amend the Tier 1 Plan to include a new
Tier 1 Excess Use Charge Family Plan (described
below).

Updated Tier 2 Drought Response and Implementation Plan In early 2022, BAWSCA and Wholesale Customers began negotiating a Tier 2 Drought Response Implementation Plan (Tier 2 Plan) update. Lead negotiators appointed by each agency established four policy principles (listed below). Through mid-2024, the lead negotiators assessed various methods for allocating RWS drought supplies to align with these policy principles until they agreed on a final methodology.

Policy Principles
#1: Provide sufficient water for the basic health
and safety needs of customers.
#2: Minimize economic and other adverse
impacts of water shortages on customers and
the BAWSCA region.
#3: Provide predictability of drought allocations
through consistent and predetermined rules for
calculation, while allowing for flexibility to
respond to unforeseen circumstances.
#4: Recognize benefits of, and avoid
disincentives for, water use efficiency and
development of alternative water supply
projects.

Tier 2 Plan Term
The Tier 2 Plan term is coordinated with the term
of the WSA to avoid simultaneous renegotiation
of these related agreements.

Negotiated Tier 2 Plan Allocation Formula
Allocations are determined using multiple
factors:
- Minimum and Maximum Cutbacks:

Establishes the upper and lower bounds of
each Wholesale Customer’s final allocation.
- Residential Per Capita Basis: Allocates
water on a residential per capita basis, based
on the portion of each agency’s potable
water demand met by the RWS.
- Non-Residential Base Use: Allocates water
based on each agency’s estimated nonresidential indoor (base) use. - Seasonal Purchases: Allocates water based
on estimated seasonal use from the RWS.
- Base Purchases/Individual Supply
Guarantee (ISG) Weighted Share:

Remaining water is allocated based on a
weighted share of 2/3 of RWS purchases and
1/3 of ISG.

Tier 1 Excess Use Charge Family Plan
Excess use charges are only applied when the collective Wholesale Customer usage exceeds the Tier 1 allocation. If this occurs, excess use charges will be proportionally applied to agencies that exceeded their individual Tier 2 allocations. 21335941.6
7 B.

The picture can't be displayed.
“A multicounty agency authorized to plan for and
acquire supplemental water supplies, encourage
water conservation and use of recycled water on
a regional basis.”
[BAWSCA Act, AB2058 (Papan-2002)]
BAWSCA Service Area
Updated Tier 2 Plan and WSA
Amendments Adoption
BAWSCA | Brisbane Mtg
July 15, 2025
8 B.