The millions of gallons of water that have been pumped out of Palo Alto sites this year and sent toward the city's storm drains have historically been viewed as a byproduct of basement construction, rather than a valuable resource going to waste.

But with the drought now in its fourth year and residents increasingly raising flags about groundwater pumping, or "dewatering," the city is taking a fresh look at the practice and preparing to institute new construction requirements, as well as pursue new studies in an attempt to plumb the mysteries of this hidden water source.

In its first discussion of a topic that has rattled the residents of Old Palo Alto, Crescent Park, Community Center and other neighborhoods where the practice of dewatering occurs, the City Council's Policy and Services Committee tentatively endorsed on Tuesday a list of short-term reforms proposed by staff to address the issue and added a list of other, more ambitious, initiatives relating to basement construction and dewatering.

These include requiring contractors to analyze and mitigate the impacts of dewatering; exploring new fees to capture the value of the discharged water; finding new uses for the water being pumped out; and pursuing a long-term study focusing on best practices for groundwater.

Dewatering has become a bigger issue this year in Palo Alto, with more residents buying up properties, tearing down houses and building bigger ones, often with large basements. Whereas a decade ago, the city issued between five and 10 dewatering permits per year, this year the number was 14. In 13 of these cases, the homeowner was building a second story in addition to the new basement, according to Public Works staff.

Signifying the rising level of concern, close to 50 residents attended the hearing for what was mostly a technical discussion about the complex topic. More than a dozen, including those affiliated with the new group Save Palo Alto's Groundwater, addressed the council to request a moratorium on dewatering permits and more studies about the impact of basement construction on the city's water supply, nearby homes and trees. Many argued that allowing the water from construction sites to flow freely into the storm drains (and, ultimately, into the Bay) sends the wrong message about the value of the water.

"It is important to remember that this groundwater serves as an emergency water system for Palo Alto," said Rita Vrhel, a member of the citizens group. "Even though it's not potable at this time, it could be treated and in a period of continued drought, it could be a significant resource to us all."

Former Mayor Peter Drekmeier told the committee that under the present system, the water being pumped from basements is "seen as a problem versus a resource."

Keith Bennett, a resident of Old Palo Alto who spearheaded the formation of Save Palo Alto's Groundwater, also argued that water should not be treated as a mere byproduct of construction.

"Whether potable or not potable, this water is clearly usable for irrigation," Bennett said. "It should be managed as a valuable resource."

Skip Shapiro drew applause from the audience after suggesting that the committee consider zoning laws that would simply restrict basement construction in areas where groundwater needs to be pumped.

"If (someone is) building basements in residential areas where dewatering is required, perhaps that's not an appropriate place to add basements," Shapiro said.

The council had commissioned studies on the topic in the past, though Public Works staff acknowledged Tuesday that the numbers in these reports aren't particularly reliable. The Santa Clara County Water District doesn't have all the desired data either, said Phil Bobel, assistant director of Public Works.

The water district "would be the first to admit that our northern county groundwater situation is not well studied enough to answer the kinds of questions you'd like answered," Bobel told the committee.

Committee Chair Pat Burt, who also sits on a water district committee charged with looking at the subject, noted that the water district has recently allocated $3 million in funding for water-conservation efforts, money that could be spent on further exploring groundwater and possible uses for it.

Burt also suggested that the city consider zoning changes related to basement construction, though this would be a longer-term initiative that is unlikely to be completed by next spring, when dewatering projects could resume (the city's existing policy prohibits dewatering between October and April).

In the short term, Public Works staff will confer with hydrogeological experts and other stakeholders, refine the city's proposed reforms and return to the committee early next year to discuss any potential rule changes.

Among the most significant changes, Bobel said, would be requiring a contractor to do a study on the localized "microimpacts" of dewatering, including impacts of water pumping on nearby houses and trees.

"This would be a major new feature," Bobel said. "The contractor would have to engage a third-party expert to evaluate the impacts and effects on neighboring properties and to avoid those impacts."

Staff also proposed firming up the city's rules on filling stations at dewatering stations, which would allow residents, landscapers and others to fill up trucks and buckets with the pumped-out groundwater. While these stations are already required, they would now be required to have adequate water pressure to accommodate multiple concurrent users.

Another proposal that will be further explored in the coming months is one requiring contractors to provide water hauling services once per week to deliver the water to area parks or other areas where it can be used.

The committee generally endorsed most of these recommendations, though members also proposed a host of new initiatives for staff to pursue in the longer time frame, possibly in collaboration with neighboring cities and the county's water agency.

Councilman Cory Wolbach said his biggest concern is water security, making sure Palo Alto's aquifers continue to be adequately supplied. He supported going ahead with the long-term study, which would explore the water levels in both the deep and shallow aquifers (the deep aquifer, which is much larger than the shallow one, includes the city's emergency-water supply), estimate the amount of water that flows between the two aquifers and how it fits into the bigger picture of the area's water ecosystem.

"We don't want a knee-jerk reaction. We want to be data-driven," Wolbach said. "Before we decide what to do, let's think about what goals we're trying to achieve. What are the problems we are trying to solve?"

Committee members also suggested that whatever rules the city adopts should be flexible to account for dry and wet years. Councilman Tom DuBois suggested that there be some "context sensitivity in terms of what we require."

"If we're in year three of the drought, maybe requirements are different then after a couple of rainy seasons," he said.