Source: Palo Alto Weekly
Cover story - Friday, July 24, 2009
Gennady Sheyner

The picturesque Pulgas Water Temple towers over a turquoise pool in a leafy grove by the Santa Cruz Mountains. Composed of a stone well surrounded by 10 columns, it stands a chain-link fence away from a crew of construction workers who are replacing rusty pipes and mending deep-set cracks in a water channel that runs past the temple and toward the shimmering Crystal Springs Reservoir.

The stone shrine — built in 1934 next to the southern rim of Crystal Springs — celebrates the beauty, abundance and value of the fresh water Bay Area communities managed to siphon off the snow-topped Sierras in the early years of the 20th century. The water, considered among the cleanest in the world, runs from Yosemite, through the 459-mile Hetch Hetchy system and splashes out of the showers, faucets and sprinkler systems of Palo Alto and more than 20 other Bay Area cities and water agencies.

But while the temple invokes a sense of quiet triumph, the faint sound of an electric saw whirring in the background, beneath a fountain of orange sparks, serves as a reminder that man's tenuous victory over nature comes at a high price. Cities that buy water from Hetch Hetchy not only have to pay a hefty sum to maintain the crumbling infrastructure, but they also have to plan ahead for global warming and population growth — factors that could turn the bountiful resource into a scarce commodity.

The San Francisco Water Department began its renovation of the aging Pulgas channel July 15, but plans to refurbish it have been in the works for several years — part of San Francisco's $4.4 billion effort to renovate the entire Hetch Hetchy system. Last week, workers began replacing corroded pipes, fixing the cracks at the bottom of the stone channel and reinforcing the sides of the channel with steel plates.

The Pulgas work is one of about 85 parts of the Water System Improvement Program, which San Francisco launched in 2002 and targets seismically shaky dams, reservoirs and pipes all along the Hetch Hetchy system.

The overall work plan also includes 14 Peninsula projects, including three near the water temple. The projects, which also include retrofitting the walls of the reservoir and upgrading the dechloramination facility near Crystal Springs, are scheduled to be completed in 2012.

While Palo Alto water customers have little reason to pay attention to the work near the Pulgas Temple, their water bills are a clear indicator of spiking infrastructure costs tied to the cranes and hard hats around the reservoir.

This month, Palo Alto water bills — already among the highest in the mid-Peninsula region — went up by 5 percent. A year from now, they are projected to rise by another 7 percent. Then 8 percent, then 9 percent and then 9 percent again.

A 5 percent increase may be a drop in the bucket for many Palo Alto residents, but the drops are expected to add up. Palo Alto's Utilities Department estimates that the price of water it buys wholesale from San Francisco will triple between what it was in 2006 and what it will be in a decade or so. The average resident's bill — which went from $68 to $72 this month — is expected to double over the same time period, said Jane Ratchye, assistant utilities director.

"If you look at what's happening with the rates, they've already started down this path," Ratchye said.

The major construction projects (and, consequently, the swelling water bills) may help explain why Palo Alto's water-efficiency programs are drawing more interest from residents these days and why native-plant gardens are becoming trendier among local landscapers. But Palo Altans may soon have other long-term incentives to turn down their faucets.

Last month, the City Council endorsed a new water-supply contract with San Francisco — the first such agreement in 25 years. For the past quarter century, the terms between San Francisco and its wholesale customers have been guided by a legal settlement. After San Francisco proposed major rate hikes for its wholesale customers and smaller increases for its own residents in 1974, Palo Alto led a long and bitter lawsuit against its water provider. The settlement was finally hashed out in 1984. It expired last month.

The new contract — considered a huge milestone for the 26 agencies that buy water from San Francisco — allots 184 million gallons of water per day to San Francisco's wholesale customers until 2018 and allows these customers to sell portions of their allocations to other jurisdictions. Water officials say this new provision could potentially serve as a carrot for cash-strapped cities with water to spare.

Among the biggest beneficiaries could be Palo Alto, which city officials acknowledge has been receiving a sweet deal from San Francisco over the past 25 years. Palo Alto's share of water from San Francisco has been 17 million gallons per day. That allotment won't change with the new contract, even though the city uses only about 13.5 million gallons of water.

Mayor Peter Drekmeier, who works as a program director for the Tuolomne River Trust, called Palo Alto's allotment the second-most generous among the 26 agencies that make up the Bay Area Water Supply and Conservation Agency (only Hayward, which is guaranteed an unlimited supply, has a better deal). He noted that Redwood City, which has a larger population than Palo Alto, is entitled to less than 13 million gallons per day.

Drekmeier's group has been among the leading proponents of including a cap-and-trade clause in the new contract. Under this provision, Palo Alto could make money by selling some of its allotment to other communities and use the proceeds to further enhance its water-conservation programs, he said.

At a recent council discussion of the new water contract, Palo Alto Councilman Greg Schmid also expressed enthusiasm about the new provision, which he said could give water-rich communities an inducement to conserve water and give thirstier communities new options for expanding their supply.

"An effective cap-and-trade market could generate real incentives for conservation among some buyers," Schmid said. "It could be tailored to people who really need it and could really benefit everyone in the Bay Area."

But while the cap-and-trade system offers cities a carrot for conservation, another provision in the new contract provides a stick. Under the new agreement, if the wholesale customers collectively use more than 184 million gallons per day, San Francisco would fine those cities that exceed their individual quotas. The San Francisco Public Utilities Commission, which oversees the water system, expects to set these quotas in December 2010.

The clause is intended to address the Bay Area's greatest challenge: population growth. The Bay Area Water Supply and Conservation Agency (BAWSCA) expects the population in its service area to grow by about 16 percent between 2007 and 2030. Water usage over the same span is projected to climb to about 208 million gallons per day — far more than the 184 million gallons San Francisco currently allots to its wholesale customers.

Extended droughts could make the situation worse, as could global warming, which Drekmeier said is expected to reduce the Sierra snowcap by 20 to 50 percent.

"There's going to be a lot more people and less water available," Drekmeier said. "The thing we have to do now is prepare for that uncertain future."

Faced with the grim numbers, BAWSCA is now working on its own long-term plan for water conservation, said Art Jensen, the agency's CEO. Jensen told the Palo Alto council in May that the plan will include water-efficiency measures and capital projects agencies could consider adopting to ensure a stable water supply in the coming years. Among the biggest challenges, he said, is finding ways to improve the system's water-storage capacity.

Palo Alto Councilman Larry Klein, who sits on the BAWSCA board of directors, said the threats of global warming, future droughts and population growth all offer Palo Alto and its Bay Area neighbors major incentives to turn down their collective faucets in the coming years. The prospect of paying a surcharge for using too much water only adds one more.

"Part of the water-supply contract is looking at future demand and planning for increased water conservation," Klein said. "We'll have to redouble our conservation goals."

Ratchye, who is in charge of Palo Alto's water supply, offered a blunter assessment.

"I think the whole system is at a very high risk of water shortages," Ratchye said. "I think we are, even without additional people, always at risk — but it could easily get worse with climate change and more people."

The cost of retrofitting the Hetch Hetchy system may be the primary reason why the average Palo Alto water bill is marching toward triple digits, but it's hardly the only one. Nor does it explain why Palo Alto's residential customers pay more for water than, say, Redwood City customers, who also buy from San Francisco and are also chipping in for the repairs but who, in the last fiscal year, paid an average of $50.72 a month for water, compared to $68.79 in Palo Alto.

According to a survey BAWSCA released earlier this year, Palo Alto's average monthly water bill was the fifth highest among the 27 agencies (Hillsborough, Skyline, Purissima Hills and California Water Service were the only four BAWSCA members ahead of Palo Alto. Since the survey, California Water Service acquired Skyline, placing Palo Alto in fourth).

Utilities staff say one major reason for Palo Alto's high bills is the city's intense maintenance program. A February report notes that over the past several years the city has been pursuing "an aggressive Capital Improvement Program to rehabilitate or replace aging water-distribution infrastructure." The city's capital budget allocates $4.4 million this fiscal year for upgrades on the water-distribution system and $24.3 million over the next five years.

This week, for instance, the Palo Alto council authorized a $5.2 million contract for the installation of 33,515 linear feet of new water main and 51 new fire hydrants. A staff report released last week notes the city needs to replace "existing water mains that begin to show signs of extensive corrosion or become subject to recurring breaks, typically cast iron pipes."

Ratchye said the city has been methodically replacing and upgrading the aging infrastructure of all of its utilities over the past 15 years or so. "I believe we have a capital program that is larger than average," Ratchye said. "We also have an older system, and we're now going through it and replacing it."

At the same time, Palo Alto is preparing its own elaborate earthquake-protection plan: an underground reservoir capable of storing 2.5 million gallons of water. If the Hetch Hetchy system were to crumble in an earthquake, the reservoir under El Camino Park would keep the city afloat for 30 days.

This fall, Palo Alto plans to issue $35 million worth of bonds to pay for the new tank and a series of related emergency-water-supply improvements. The city issued its request for proposal for pre-design of the new reservoir last month and expects to commence construction in fall of 2010.

Palo Altans upset about the skyrocketing water rates should also reserve some blame for themselves. Palo Alto, after all, is proud of its lush canopies, verdant lawns and landscaped gardens — even if they have to pay the price. Trees, after all, aren't just a perk in Palo Alto — they are a part of the city's very identity.

Peter Drekmeier, who is one of the city's leading proponents of using more recycled water, says Palo Altans' landscaping habits are the prime reason they use close to 120 gallons of water per capita per day, roughly twice as much as their neighbors in East Palo Alto.

"Palo Alto takes a lot of pride in being a lush city," Drekmeier said. "It's Tree City, USA. People enjoy their lawns and that takes a lot of water."

The city tries to mitigate this problem by using recycled water to maintain the Palo Alto Municipal Golf Course and Greer Park. Palo Alto also plans to extend the system soon to Mountain View and, some day, to Stanford Research Park — where some of the biggest corporations water their vast green courtyards with potable water.

But Drekmeier and Klein both said the city's high water consumption offers a lot of low-hanging fruit — simple measures residents can adopt to conserve.

One major step would be to populate local gardens with native plants, which require little water, Drekmeier said. One local gardener, Kirsten Essenmacher, said the switch to native-plant gardens is already generating major momentum around town.

Three years ago, Essenmacher started a native-plant garden in her Channing Avenue home. Since then, the ranks of admirers of the new garden have been growing as fast as the plants.

In April, about 450 people came over during the city's annual native-garden tour to check out her path-lined garden and its arrangement of sages, grasses, persimmons, coffee berries, snow berries and other native species. That's more than twice the number who showed up just a few years ago, she said.

One reason for the renewed interest, Essenmacher said, is California's drought — presently in its third year — and the conservation ethos it inspired. The native-plant garden, she said, uses about 70 percent less water than a traditional suburban-style garden filled with wide swaths of grass and non-native staples such as azaleas and rhododendrons.

"More people are wondering how to reduce their water," Essenmacher said. "This large rate increase we've been having in the past three years and the drought made people more aware of all the environmental issues."

Essenmacher said many local gardeners are exploring a "new aesthetic" that represents a departure from the traditional East Coast look. People are also discovering that native-plant gardens don't have to be limited to prickly, cactus-like plants, she said. And the more they learn, the more they replicate.

Palo Alto officials are also seeing signs of hope in the numbers of residents who participate in city programs that offer rebates for water-efficient measures. Joyce Kinnear, who manages the city's utility marketing services, said native-garden tours and news of water shortages have prompted a renewed interest in such offerings as the Water Efficient Landscape Rebate Program, which pays up to $2,000 to residents who replace water-intense landscaping (such as lawn) with drought-tolerant plants.

Based on past experience, the city budgeted for 10 participants to sign on per year. But between last June and April, 142 Palo Alto residents applied for a rebate, according to a staff report.

Palo Alto also partners with the Santa Clara Valley Water District on water audits, rebates for low-pressure toilets and efficient washing machines and distribution of free, low-flow showerheads. And while numbers have been encouraging, Kinnear says there's still much work to be done.

"I think people started hearing about water shortages and have become more concerned, but we'd love and appreciate having more people get involved," Kinnear said.

Joe Teresi, an engineer from the Public Works Department, said the city also offers programs for limiting storm runoff. Some of these have the secondary benefit of conserving water, he said.

One program, for example, offers a $50 rebate for people who install rain barrels to capture water running off from their roofs — water that could then be used to water plants. Another program offers up to $1,000 for residents and $10,000 for companies to install above- or below-ground cisterns, which can capture larger volumes of rain water. Teresi said one customer installed a 50,000 gallon underground tank in her yard last summer and has been using the rainwater to irrigate her yard.

"It's amazing how much water you can collect," Teresi said. "The whole tank was filled up in one year."

But city leaders aren't ready to celebrate victory just yet. Klein observed that while staff may feel good about having a hundred-plus participants getting involved in the landscaping rebate program, the number is miniscule when compared with the size of the city and the pressures ahead.

"When you consider that we have about 25,000 residences and more than 15,000 single-family homes, obviously a hundred participants a year isn't going to do it," Klein said. "We'll have to step things up considerably," he added. "There's a lot more that can be done."