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6.3.E. - Page 1 <br /> RE PO RT <br /> To the Honorable Mayor and City Council <br /> From the Cit Mana er <br /> March 25, 2013 <br /> SUBJECT <br /> Approval of Amendment to the Water Supply Agreement with City and County of San <br /> Francisco <br /> RECOMMENDATION <br /> By motion, adopt a resolution approving amendment number one to the Water Supply <br /> Agreement with the City and County of San Francisco and Wholesale Customers in <br /> Alameda County, San Mateo County and Santa Clara County. <br /> BACKGROUND <br /> In June 2009, Redwood City entered into a Water Supply Agreement (WSA) with the <br /> City and County of San Francisco and Wholesale Customers in Alameda County, San <br /> Mateo County, and Santa Clara County. The WSA sets forth the terms by which the <br /> twenty six Wholesale Customers will purchase water from the San Francisco Regional <br /> Water System (System), which includes the Hetch Hetchy Reservoir (Reservoir). <br /> During the 2012 election cycle, a group named Restore Hetch Hetchy placed an <br /> initiative before San Francisco voters that would have required the City and County of <br /> San Francisco to develop plans to drain the Reservoir and restore Hetch Hetchy Valley. <br /> The initiative was defeated, but the organization announced that it will continue to <br /> pursue these goals. The Wholesale Customers use two-thirds of the water provided by <br /> the System and pay two-thirds of the costs of building, operating and maintaining the <br /> System. However, none of these water customers may vote on San Francisco ballot <br /> measures. As a result, there is uncertainty as to how the parties would address changes <br /> to the System in the event of a future abandonment or decommissioning of <br /> O'Shaughnessy Dam, which forms the Reservoir, or a draining of the Reservoir. <br /> ANALYSIS <br /> In order to provide long-term protection for the Wholesale Customers, the Bay Area <br /> Water Supply and Conservation Agency (BAWSCA) and San Francisco have developed <br /> an administrative solution (the proposed Amendment to the WSA) which addresses <br /> water-supply reliability, water quality and cost-allocation. This Amendment will assure <br /> that the existing condition of the Reservoir is maintained unless the parties agree to a <br /> further amendment to the WSA that meets certain conditions. Notably, the Amendment <br />