Initially, the Spring Valley Water Company supplied water for the development of the park. But the water they supplied was expensive; $1,050 per month for enough water to irrigate only 75 acres, and so the city pursued alternative sources of fresh water. Wells were drilled along the San Francisco's coast as early as 1873, indicating that there was fresh water which could be tapped very near the ocean. A proposal was made to build a windmill right on the dunes and to use the prevailing westernly winds to pump water from beneath the dunes and into the park.
A lot of skepticism surrounded the decision to built a windmill along San Francisco's coastline. People doubted that an extensive source of fresh water could be found so close to the ocean. There were also concerns that the proposed windmill would not provide enough force to successfully pump water. Despite the doubts, construction of the windmill was ordered in 1902. Commisioners Speckle, Lloyd, and Aaron were appointed by Schmitz (John McLaren, superintendent of the Golden Gate Park) to oversee the construction of the windmill, at a cost not to exceed $14,000. Fulton Engineering Company won the bid to supply the necessry ironwork, at a price of $3100 and the Pope & Talbot Lumber Co. donated Oregon Pine spars. Construction of the Dutch Windmill was completed prior to June 30th, 1902, at a total cost of $16,000.
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