The council was to vote on the item as part of its consent calendar, which doesn't require discussion, but staff recommended the council vote to discuss it as an agenda item before making a decision and the item was added to the regular agenda. When it came up, it caused an almost immediate heated discussion with Councilman Greg Tanaka, who questioned the free transfer.

The inequity wasn't lost on council members and city staff. They noted that while East Palo Alto receives just 2 million gallons of water per day, Palo Alto receives 17 million. But Palo Alto only uses 10 million gallons per day, City Manager James Keene noted.

The council voted 7-1, with Councilman Greg Tanaka dissenting and Councilman Greg Scharff absent, to give a half-million gallons per day of water to enable East Palo Alto to resume its development. East Palo Alto had to put a moratorium on new hookups last year after it ran out of additional water supplies. At least four major projects have been on hold , including low-income housing, two commercial developments and a school. East Palo Alto has the smallest share of water allocations from the San Francisco Public Utilities Commission, which supplies water to local cities from the Hetch Hetchy Reservoir, because the city was not incorporated when San Mateo County made the deal with the SFPUC to divide the shares.

Keene said that Mountain View has a different allocation structure. It gets its water from the Santa Clara Valley Water District and SFPUC. Because it has a guaranteed minimal purchase from SFPUC, it must pay for allocations it isn't using. The costs for unused water could reach $8.5 million in the next four to five years, he noted. The one-time, $5 million payment by East Palo Alto is designed to help offset the costs Mountain View must pay.

But Tanaka noted the city of Mountain View has an agreement to transfer 1 million gallons per day of its water shares to East Palo Alto for $5 million. He questioned why Palo Alto should not also be paid $2.5 million for its half-million gallons per day shares.

Keene said the value is negligible, since Palo Alto doesn't have to pay for the water shares that it doesn't use. The city is unlikely to ever need all of its water shares, he added.

Councilwoman Karen Holman, a co-author of the Dec. 5, 2016, colleagues' memo to look into transferring the shares, also questioned the process staff failed to engage in that would have afforded scrutiny and education for the council and the public prior to the vote.

Councilwoman Lydia Kou said East Palo Alto and Palo Alto share many concerns, such as traffic, housing and airplane noise. The cities want to work cooperatively to synchronize traffic signals on University Avenue to decrease congestion, reduce aircraft noise and provide affordable and low-income housing. Helping East Palo Alto with its water is the first in what could be a constructive collaboration on the other mutual issues of concern.

Carol Lamont, a Palo Alto resident who worked as East Palo Alto's rent control stabilization program administrator, noted that Palo Alto took East Palo Alto land when the area was still San Mateo County property. Palo Alto reconfigured San Francisquito Creek, which moved the border, and that land is now Palo Alto's municipal golf course and airport.

Former Palo Alto Councilman Pat Burt, who was one of the authors of the colleagues' memo when he was on the council, took Tanaka to task for wanting to charge East Palo Alto for water that costs the city nothing. Tanaka, he said, is "asking less affluent East Palo Alto to subsidize our rates. East Palo Alto is our most intimate neighbor that houses our service workers and some of our city employees."

"How can we be giving away our water while utilities bills are raised by hundreds of dollars a year?" he said. But Keene noted the actual rate increase is 3 to 4 percent.

Not having such procedures and processes followed "interferes with my ability to do my job, I think, in a reasonable and responsible manner. I hope that these kinds of situations going forward don't proliferate," she said. Pulling the water issue from the consent calendar and having it as an agenda item where the council and the public did have a chance for discussion was the proper thing to do, she said.

But Holman said that staff never brought the water transfer to the Finance Committee, council never held a study session and they never discussed or considered what details were in the East Palo Alto water conservation documents.

Holman had co-authored the colleagues' memo with Burt, Filseth and Councilman Tom DuBois. While she supported the share transfers, she was disturbed that staff had not followed the council's directives, which would have led to a more public process and greater scrutiny by the council. The memo had requested that the council direct staff to schedule a council study session to discuss the sale or transfer of the water rights to help East Palo Alto. The council voted 8-0 to refer the matter to the Finance Committee for discussion.

But Tanaka remained firm. "Options are worth something. Water rights are worth something. ... For us to consciously give way $2.5 million in water rights is improper," he said.

Without the water shares from Palo Alto, it is likely East Palo Alto will have to do much groundwater pumping, something that Palo Alto does not want, council members noted.

East Palo Alto Mayor Ruben Abrica noted the city has no water reserves, no emergency supply and no tanks. The city "inherited many structural inequalities and insufficiencies" when it was incorporated and lacked the "power to negotiate" its water allocations because San Mateo County made the deal with the SFPUC, he said.

Palo Alto grants water to East Palo Alto

Transfer of a small portion of its water shares will help East Palo Alto development