Attachment E

(Bay Area Water Supply and Conservation Act)

The Act adds Division 31 (commencing with Section 81300) to the Water Code.

The Legislature finds and declares among other things that:

• Many cities, districts and public utilities distribute water in portions of the Bay Area served by the regional system operated by the City and County of San Francisco. Residents in Alameda, San Mateo, and Santa Clara counties who depend on this water and pay for two thirds of the costs for the regional infrastructure.
• The regional water system is vulnerable to catastrophic damage in a severe earthquake, which could result in San Francisco and neighboring communities being without water for up to 60 days. The system is also susceptible to severe water shortages during droughts because of insufficient storage and the absence of arrangements for alternative dry-year supplies.

Creation of a new agency. The Bay Area Water Supply and Conservation Agency enabled by this legislation would permit local governments, responsible for distribution of water in the three counties, to plan for and acquire supplemental water supplies, to encourage water conservation and use of recycled water on a regional basis, and to assist in the financing of essential public works in a coordinated and cost-effective manner.

Agency formation. The governing body of one of the eligible 26 public entities in Alameda, San Mateo, and Santa Clara counties, as identified in the Act, may, by a majority vote of its members, declare its intention to form a new agency with all of the other public entities. Each of the other public entities shall consider whether to form the agency and whether to become a member. Upon adoption of resolutions of the public entities to form and join the agency, the governing body of each public entity shall forward a certified copy of the resolution to the Board of Supervisors of San Mateo County. If the Board of Supervisors determines that at least fifteen of the eligible public entities, representing at least sixty percent of their total water purchases from San Francisco, have adopted such a resolution, the Board shall declare that the agency has been formed.

The eligible 26 public entities. Alameda County Water District, City of Brisbane, City of Burlingame, Coastside County Water District, City of Daly City, City of East Palo Alto, Estero Municipal Improvement District, Guadalupe Valley Municipal Improvement District, City of Hayward, Town of Hillsborough, Los Trancos County Water District, City of Menlo Park, Mid-Peninsula Water District, City of Millbrae, City of Milpitas, City of Mountain View, North Coast County Water District, City of Palo Alto, Purissima Hills Water District, City of Redwood City, City of San Bruno, City of San Jose, City of Santa Clara, Skyline County Water District, City of Sunnyvale, and Westborough Water District.

The agency’s governing board. The agency shall be governed by a board of directors with one member appointed by the governing body of each member public entity. The Board of Supervisors of San Mateo County shall appoint to the agency’s board an officer or employee of California Water Service Company. The Board of Supervisors of Santa Clara County shall appoint an officer or employee of Stanford University. Each director has one vote. Any director may call for the use of weighted voting.

The agency’s powers. The agency may make contracts of any nature and contract with the United States, the state, a public or private entity or a person. In addition, the agency may plan, finance, acquire, construct, maintain, and operate facilities for the collection, transmission, treatment, reclamation, reuse and conservation of water. It may apply for and receive state and federal financial assistance.

Financial matters. The agency may borrow money and issue notes and bonds, including revenue bonds, without the approval of voters. It may use proceeds of bonds for the construction, reconstruction, or improvement of facilities of public works, including facilities of the San Francisco regional water system subject to a mutually satisfactory agreement.

Water management. The agency may support or implement water conservation and water reclamation programs and projects. The agency may acquire water and water rights; develop, store, and transport water; and provide, deliver and sell water on a wholesale basis within its boundaries. The agency does not have the power to provide retail water service. Local water systems and retail water service remain within the purview of individual member agencies.

City of San Francisco membership. The City may apply to become a member of the agency subject to approval of the agency’s board of directors.

Control of Regional System. It is specifically stated that nothing in the Act changes the governance, control, or ownership of the regional water system.