The Mountain View City Council signed a $5 million deal Tuesday night to sell off water rights to East Palo Alto to help end the city's yearlong moratorium on development.
Under the deal, Mountain View agreed to transfer 1 million gallons per day to East Palo Alto, which would single-handedly boost the northern city's water supply by more than 50 percent. In exchange, Mountain View will receive a one-time lump payment of $5 million.
The agreement was approved by the City Council in a 6-1 vote with Councilman John McAlister opposing.
The deal is a lifesaver for East Palo Alto, which effectively ran out of water last June and had to call an emergency moratorium on a range of new construction. That action brought a sudden halt to a series of expansive developments already in the city's pipeline, including a 1.4-million-square-foot office campus at 2020 Bay Road that would be the city's largest-ever project. The water shortage also stalled a 120-unit affordable-housing project at 965 Weeks St. and also the launching of The Primary School, a Mark Zuckerberg and Priscilla Chan-funded private school.
Many of those big-ticket developers agreed to pitch in money to help facilitate the water transfer agreement, according to an East Palo Alto staff report. In exchange, those projects will reportedly receive priority on any new water connections that become available.
On Tuesday night, a line of East Palo Alto officials came out to Mountain View to urge their Peninsula neighbors to approve the deal. Skipping his own city's council meeting that evening, East Palo Alto Mayor Larry Moody described the water as a game-changer for the future of his city.
"This comes from a heartfelt desire for residents of East Palo Alto to change our narrative," he said. "We can become a community that's pursuing our hopes and dreams; we can become a community like Mountain View."
By most accounts, the trade is a win-win for both cities. The region's major water provider, the San Francisco Public Utilities Commission (SFPUC), has allocated a meager 1.9 million gallons per day to East Palo Alto, giving it the lowest per-capita amount on the Peninsula.
Conversely, Mountain View has the problem of too much water. Under its SFPUC contract, the city must purchase at least 8.93 million gallons per day even if that full amount is never consumed. Mountain View officials reported that around 2011 and 2012, they ended up wasting $440,000 from water that wasn't needed. More recently, the SFPUC lifted those contract rules during the statewide drought years.
Mountain View elected leaders were reassured by Public Works staff that the city should have plenty of water for its long-term growth over the coming decades. But city leaders still exhibited some caution toward what would be an irreversible sale of their water rights. Councilwoman Pat Showalter, who just retired as a water utility engineer, pointed out it wasn't a decision to be made lightly.
The uncertainty was too much for Councilman McAlister, who said he couldn't approve the deal while unsure if it would disadvantage Mountain View. Other council members were happy to approve it.
In addition to the water from Mountain View, East Palo Alto officials are also hoping to sign a deal with the city of Palo Alto for an extra 500,000 gallons per day.
Any transferring of water rights will still need to be given final approvals by the SFPUC.