DATE: December 2, 2025
TO: Mayor and City Council
FROM: Director of Public Works
SUBJECT
Title
Adopt Resolutions Authorizing the City Manager to Execute Amendments to the Water Supply Agreement Between the City and County of San Francisco and Wholesale Customers Relating Primarily to: 1) Reducing the Requirement for Purchase of Minimum Water Supply Quantity for the Alameda County Water District, City of Milpitas, City of Mountain View, and City of Sunnyvale; and 2) Updating Tier 2 Water Shortage Allocation Plan
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RECOMMENDATION
Recommendation
That the City Council considers and adopts the following two resolutions and authorizes the City Manager to execute the amended and restated Water Supply Agreement:
1. Amending the 2021 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 as of (Attachment II); and
2. Updating the Tier 2 Water Shortage Allocation Plan. (Attachment III).
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SUMMARY
Hayward receives its potable water supply from the San Francisco Public Utilities Commission (SFPUC) under the terms of a 1962 individual water sales agreement, as well as the 2009 Water Supply Agreement (WSA) between San Francisco and the wholesale water customers (Wholesale Customers) which includes the City of Hayward. From time to time, most recently in 2021, the WSA is amended to reflect evolving water supply and management needs.
This report provides an overview of two proposed wholesale customer water supply agreement actions:
1. An amendment to the Amended and Restated Water Supply Agreement between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County (WSA). This amendment addresses three key areas:
a. Minimum Purchase Quantity Requirements: Modifies the Minimum Purchase Quantity for the Alameda County Water District, City of Milpitas, City of Mountain View and City of Sunnyvale (Minimum Purchase Agencies).
b. Tier 1 Shortage Allocation Plan (Tier 1 Plan): This Plan allocates water between San Francisco retail customers and the Wholesale Customers during a declared water shortage emergency by the SFPUC. The amendment establishes a “Tier 1 Family Plan”, a change that ensures that during a drought, financial penalties for exceeding water allocations will only be applied to a Wholesale Customer if the entire group of twenty-six Wholesale Customer agencies exceeds its total water allocation from the SFPUC.
c. General Updates: Minor corrections and clarifications within the WSA.
2. An updated Tier 2 Water Shortage Allocation Plan (Tier 2 Plan): The Tier 2 Plan provides the method for allocating water from the SFPUC’s Regional Water System (RWS) among the Wholesale Customers during drought shortages.
ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution, Amendment to Water Supply Agreement
Attachment III Resolution, Drought Response Implementation Plan