City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: June 15, 2026
Report #:2605-6415
TITLE
Approve Submittal of the 2026 Annual Water Shortage Assessment Report; CEQA status:
exempt.
RECOMMENDATION
Utilities Advisory Commission (UAC) and staff recommend City Council approve submittal of the 2026 Annual Water Shortage Assessment Report
EXECUTIVE SUMMARY
Beginning in 2022, every urban water supplier in California must conduct an Annual Water Supply and Demand Assessment as required by California Water Code Section 10632 (a). Each urban water supplier must also submit an Annual Water Shortage Assessment Report to the Department of Water Resources (DWR) on or before July 1, as required by California Water Code Section 10632.1. The City’s Annual Water Shortage Assessment Report (Attachment A, Tables 1-5) show that there is no water shortage anticipated for Fiscal Year 2027.
On April 14, 2026, the San Francisco Public Utilities Commission (SFPUC), Palo Alto’s water supplier, provided Palo Alto with the Water Supply Availability Update for the current year.
Although precipitation at Hetch Hetchy has been near median, snowpack in the upper watersheds is only 25% of the April 1 median. Even with these historic conditions, the entire water system is expected to be filled by the end of May 2026. SFPUC’s Water Bank is full and will continue to support deliveries throughout the year, while reservoir storage as of April 13, 2026 remained well above typical levels for the time of year. The City of Palo Alto encourages continued water conservation efforts and the City’s website contains more information about available water conservation programs.1
BACKGROUND
1 Water Conservation Programs https://www.paloalto.gov/Departments/Utilities/Ways-to-Save
To prepare the 2026 Annual Water Shortage Assessment Report, staff followed the procedures outlined in its Water Shortage Contingency Plan, contained in Section 7 of the City’s 2020 Urban Water Management Plan (UWMP). Palo Alto’s 2026 Annual Water Shortage Assessment Report uses the DWR-developed Optional Annual Assessment Tool format. This format includes the five tables shown in Attachment A. Staff will submit the standard tables to DWR by July 1, 2026. “Table 1: Annual Assessment Information” (Table 1) provides required overview information. The remaining tables project water supply and demand for FY 2027 under dry conditions, as required, and find that there is no projected water shortage.
Upon Council adoption, staff will submit the 2026 Annual Water Shortage Assessment Report to the Department of Water Resources. After Palo Alto and other urban water suppliers report to DWR on the 2026 Annual Water Shortage Assessment Reports, DWR will prepare a summary report on its review of the Annual Water Supply and Demand Assessment results and provide it to the State Water Resources Control Board (State Board) by September 30, 2026. The DWR report will include water shortage information at the supplier level, as well as regional and statewide analysis of water conditions as required by California Water Code Section 10644 (c)(1)(B).
ANALYSIS
Potable Water
Palo Alto receives 100% of its potable water supply from the SFPUC Regional Water System and staff used the SFPUC's April 14, 2026 Water Supply Availability Update to determine water supply.
• “Table 2: Water Demands” (Table 2) provides a demand projection for each month of FY 2027;
• “Table 3: Water Supplies” (Table 3) notes that there is sufficient supply to meet Palo Alto’s demand and projects supply equal to the demand projection since there is no projected water shortage in FY 2027;
• “Table 4(P): Potable Water Shortage Assessment” (Table 4(P)) compares projected FY 2026 demand with supply and illustrates that there is no shortage projected for FY 2027; • “Table 5: Planned Water Shortage Response Actions” (Table 5) shows no triggered water shortage actions.
Palo Alto’s eight permanent water use regulations remain in effect (see Palo Alto Municipal Code Section 12.32.010).
Non-Potable Water
For non-potable recycled water, Table 2 provides the demand projection and Table 3 notes that there is sufficient supply to meet Palo Alto’s non-potable recycled water demand in FY 2026.
For that reason, the supply is set to equal demand and there is no shortage of non-potable water projected in Table 4(NP), “Non Potable Water Shortage Assessment”.
FISCAL/RESOURCE IMPACT
There is no fiscal impact from Council approving submittal of the 2026 Annual Water Shortage Assessment Report.
STAKEHOLDER ENGAGEMENT
Interested parties are encouraged to comment or provide feedback on the proposed 2026 Annual Water Shortage Assessment Report at the Council meeting where the report will be considered for approval, or to submit written comments prior to those meetings.
On May 6, 20263, staff presented the 2026 Annual Water Shortage Assessment Report to the UAC. One commissioner asked how early runoff of snowpack affects SFPUC’s water rights. Staff was not prepared to give a detailed response but stated that it was an anomalous year given most of the snowmelt occurred in March. Two commissioners encouraged more discussion about the City’s non-potable water supply and use, particularly with respect to the associated costs to the wastewater system, and asked to revisit consideration for expansion of recycled water within the City. Another commissioner asked about the projected demand figures, and staff clarified that the projected demand used for this analysis refers to the demand study projections for the 2020 Urban Water Management Plan (UWMP). Staff also noted that the 2025 UWMP update has revised the process for the Annual Water Shortage Assessment so that best available data can be used for future assessments. The UAC approved staff’s proposal, which passed on a 6-0 vote.
ENVIRONMENTAL REVIEW
Adoption of the 2026 Annual Water Shortage Assessment Report is exempt from California Environmental Quality Act (CEQA) review pursuant to Water Code Section 10652.
ATTACHMENTS
Attachment A: 2026 Water Supply and Demand Assessment Tables APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Adriana Artola, Senior Resource Planner
3 Staff Report 2601-5794: https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=863f198e- 1594-4f3c-937f-f8849a2b671e