ITEM:		ACTION ITEMS
19.	CONSIDER ADOPTION OF CONTINGENCY PLAN TO IMPLEMENT STAGES 4 THROUGH 7 OF THE EXPANDED CONSERVATION AND STANDBY RATIONING PLAN IN CASE OF DROUGHT
Meeting Date:			December 10, 2007	Budgeted:	No
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Pintar	Cost Estimate:	$301,524 start up costs, $1,660,000 annually
General Counsel Review: Yes
Committee Recommendation: The Water Demand Committee reviewed the draft Contingency Implementation Plan at its September 11 and October 4 2007 meetings. Committee recommendations are included in the staff report. The draft Plan also was agendized for the November 6 and December 4 Technical Advisory Committee meetings, which were cancelled due to lack of a quorum.
CEQA Compliance: N/A

SUMMARY: The draft Contingency Implementation Plan for Stages 4-7 (Exhibit 19-A) has been prepared to ensure that the Monterey Peninsula will be ready to respond to drought or other water supply emergencies that require implementation of water rationing. Actions proposed by this document are based on previous rationing experiences, information from State-sponsored drought workshops, California Urban Water Conservation Council (CUWCC) resources, staff knowledge, and collaboration and planning with California American Water (CAW).

The draft Contingency Implementation Plan for Stages 4-7 was prepared as one of the Strategic Plan objectives under the Board’s three-year goal: Enhance and Protect the Water Resources of the Carmel River and the Seaside Ground Water Basin for the Benefit of the Environment and the Community. The specific strategic objective was to “Present to the Water Demand Committee a draft contingency plan to implement Stages 4-7 of the Expanded Conservation and Standby Rationing Plan in case of drought.” This objective was achieved and the prepared contingency plan is now being presented to the Board.

The year 2007 was deemed a “Critically Dry Year.” Rainfall and runoff were far below normal levels. Without at least normal rainfall this coming winter, California American Water (CAW) may request, and District staff could recommend, early implementation of Stage 4 of Regulation XV via the emergency trigger. An emergency trigger is discussed in District Regulation XV, Rule 165-A-2. The emergency trigger could cause implementation of water rationing before the May Board meeting. May is the month when the Board is required by District rule to review all water resource information and determine if water rationing is required. Implementation of Stage 4 would require data to be collected by other water users (e.g. Seaside Municipal and small water distribution systems) in preparation for Stage 5 rationing throughout the District’s Carmel River and Seaside Basin resource systems.

The potential that water rationing could be implemented in the next six months requires advance planning to gain public confidence that did not occur with the District’s previous rationing program in the early 1990’s. The draft Contingency Implementation Plan requires pre-rationing actions in several areas, such as computer programming and acquisition, personnel organization and recruitment, budgeting, enforcement, etc. The District’s regulations are designed to reduce water use to levels that will extend existing supply (by 15%, 20%, 35% and 50%), to the extent possible, until rainfall provides the necessary relief.

The draft Contingency Implementation Plan for Stages 4-7 includes an overview of the Stages (found in District Regulation XV) along with a discussion of the per capita rationing plan. The document identifies actions that need to be taken prior to rationing, including:

· Adopt revisions to Regulation XV

· Adopt a revised enforcement ordinance

· Provide the Seaside Watermaster with Regulation XV and Contingency Implementation Plan

· Obtain access agreements with Water Distribution System Operators, including a process for obtaining customer consumption and other data necessary to enforce a rationing program

· Begin Public Outreach Plan for rationing program

· Complete computer programming necessary to implement and enforce water rationing

· Design website specific to the rationing program

· Identify and obtain permitting compliance of mobile water distribution systems operators

· Update water conservation regulations to reflect modern water conservation standards

The draft Contingency Implementation Plan for Stages 4-7 also identifies actions that must take place immediately upon the Board’s adoption of a resolution to move to Stage 4 or above. Action items include:

· Notify Seaside Watermaster of action

· Recruit and hire rationing office staff

· Secure office space for staff

· Purchase/lease office equipment and furniture

· Set up data management systems and telephone systems

· Seek reimbursement from CAW for expenses related to MPWMD emergency rationing costs (A.05-02-012, Special Requests 6 and 9)

Staffing structure and costs are included in the draft Contingency Implementation Plan for Stages 4-7. Rationing office organization characteristics and staffing levels are based on information found in the Final Report Phase III Rationing (1992) and in the Final Report of the Rationing Review Committee (1990). Both documents are available at the District offices or on the website in the staff report on this item presented to the Water Demand Committee on September 11, 2007. Staffing levels for water rationing will probably fluctuate depending on the final data management features and coordination with CAW. The Contingency Implementation Plan considers that the District would perform all functions associated with the rationing program. As part of this consideration, additional support staff has been added over the past rationing period (1989-1991) to accommodate CAW’s more recent monthly billing cycle. Preliminary staffing cost estimates for ongoing water rationing with a workforce of 19 is $1,322,800.

The draft Contingency Implementation Plan outlines a public education and outreach plan. The proposed plan would be conducted in coordination with CAW. Most expenses for public outreach are anticipated to be funded by CAW. The District’s proposal includes $50,000 for outreach efforts directly undertaken by the District.

The existing water waste enforcement process is outlined in the draft Contingency Implementation Plan. This procedure is expected to be augmented by Board action in January 2008 when the draft Ordinance No. 131, adding an administrative citation process is considered. CAW is also in the process of seeking CPUC approval to collect water waste fees and flow restrictor costs on its water bills.

Data management needs for District implementation of water rationing are addressed in the draft Contingency Implementation Plan. The specifics of the data management program are being discussed with CAW and will be reported to the Board at a future date. Staff is collaborating with CAW to make sure all customer contacts synchronized to achieve the highest customer service standards for the rationing program. District data management costs (including programming and computer equipment) are anticipated to be approximately $206,024,000 for start up (one time cost) and approximately $35,000 as an ongoing annual cost.

Funding for implementation of Stages 4-7 is expected to be mostly borne by the ratepayers on the CAW bill. Start up costs (expected to be around $300,000) could initially be obtained from the District’s Conservation Fund Reserve (approximately $340,000 in July 2007) and replaced when CAW funding becomes available. Special Request 9 (SR9), approved as part of the last CAW General Rate Case, is specific to MPWMD emergency rationing costs. This memorandum account was also approved in the previous GRC (D.03-02-020, OP 5) and does not state an annual limit. SR9 allows the District to recoup its costs for expenses related to rationing.

DISCUSSION: The Water Demand Committee spent several months in 2007 reviewing the draft Contingency Implementation Plan for Stages 4-7 of the Expanded Water Conservation and Standby Rationing Plan (see background for details). A number of questions were addressed by the committee in preparation for Board discussion and consideration. Based on the input from the Water Demand Committee and direction of the Board, staff will prepare a draft ordinance to amend and refine the Plan.

The following policy questions related to the draft Contingency Implementation Plan have been discussed by the Water Demand Committee (WDC). Committee recommendations are in bold.

Board policy questions related to personnel

1. Organizational Structure. The Water Demand Manager leads the rationing program through a newly-created Rationing Program Administrator position (temporary full-time) and subordinate staff positions.

WDC agrees with the organizational structure proposed.

2. Benefits. Rationing program staff should have benefits, including vacation/sick/holiday time and insurance.

WDC recommends the rationing staff be full-time, temporary employees that receive benefits. The job classifications would be outlined in an MOU negotiated with the employees’ union and subject to the District’s reduction in force policy.

3. Rationing Office Location. Several options have been discussed and are still being considered in terms of selecting the alternative that will result in the best customer service. There is a desire to have the Water Demand Division in the same building/space as the rationing program versus having two distinct due to the necessity to share files. Two separate locations will require either a massive electronic filing effort prior to rationing or will require rationing staff to be located within the Water Demand Division to process files. The latter options are less desirable than the first, as a massive electronic filing effort would take time and IT resources, and having a dedicated filing person in the Water Demand Division is inefficient.

WDC preferred to have rationing and Water Demand Division staff work together in the current District office. WDC suggested that existing District field staff assigned work space in the MPWMD office could move to another location such as the Carmel Valley field office or other temporary offices, to make room for temporary rationing personnel. The conference room could be used as office space and Board/committee/staff meetings could be conducted at the Monterey Regional Water Pollution Control Agency or at other locations. The garage area could also be refashioned into office space.

Staff reviewed the existing office layout to identify how the current space could be utilized to house rationing staff. As part of this effort, staff did not consider using the existing conference room, as this space is used for staff, Board and committee meetings, and for meetings with other agencies, permit applicants and others. The loss of a meeting space would impact staff’s ability to comply with the District’s mission. The existing building could accommodate the proposed rationing staff, but there would be an impact on existing staffing and services, as well as costs to renovate the spaces for this purpose that have not been considered. Alterations to the existing District building would result in the following spaces for rationing personnel:

1. Convert the existing first floor garage to office space for eight employees.

2. Relocate the office specialists to the second floor, relocate the copy and supply rooms, remove a wall between the supply room and the copy room, and remove a wall between the reception area and the copy room. This would create office space for six employees on the first floor. Reception duties for the District would then fall entirely on the Water Demand Division.

3. Rearrange three workstations on the second floor in the Planning and Engineering Division area. The employees that use these workstations (generally field staff) would have to work at the field office full time. This would create office space for three employees on the second floor.

4. Relocate fisheries staff and the hydrographer to a temporarily-leased field office. This would free up office space for four employees on the second floor.

Staff recommends that the Water Demand Division temporarily be relocated to another office space in the Ryan Ranch area for the duration of the rationing program. This would ensure that there is continuity in the implementation of the rationing program and integration of the files for both programs.

Current planning with CAW

District staff has been meeting with CAW on a regular basis since April 2007 to refine plans for implementation of the Expanded Water Conservation and Standby Rationing Plan. During the late summer when it was apparent that the community would stay within the Carmel River and Seaside production limits, the District and CAW began planning for the possible implementation of Stages 4-7.

CAW’s collaboration is a critical component to a successful rationing program. CAW has three dedicated conservation staff positions in its Monterey office. CAW’s customer service function is located in Alton, Illinois, and CAW’s billing system is outsourced from New Jersey. Coordination with CAW is essential to avoiding disconnects between the District’s rationing program and CAW’s customer service and billing. In this regard, District staff has been working with CAW staff to identify potential modifications to CAW’s customer database that would facilitate the data requirements of Stages 4-7. Discussions are currently underway and staff will report back to the Board on this subject.

CAW will be filing the conservation component of its rate case as a separate filing in December 2007. District staff has worked closely with CAW on this filing to assure that the needs of the District (i.e. rationing program and conservation program funding) are included and are at a level commensurate to the planned efforts. Part of CAW’s filing will include alignment of their conservation rules with the District’s Expanded Conservation and Standby Rationing Plan, including the District’s rationing program.

RECOMMENDATION: The Board should accept the Draft Contingency Implementation Plan and provide direction to staff. A comprehensive report on the Expanded Water Conservation and Standby Rationing Plan, including proposed refinements and policy issues for the Board and adding the inland Seaside Basin areas to the plan, will be presented to the Board at a future meeting. Staff anticipates Board consideration of updates in February or March 2007.

BACKGROUND: The California Central Coast, and particularly the Monterey Peninsula, has just completed a Critically-Dry Water Year and is heading into the new water year with a National Weather Service prediction of another dry winter. Dry conditions have led to extremely low water levels in both of the reservoirs serving the Monterey Peninsula. Inflow into the Las Padres reservoir is at a record low. The Monterey Peninsula is dependent on groundwater supplies replenished by surface water and is restricted by both a state-ordered reduction (SWRCB Order No. 95-10) and a legally ordered reduction (California American Water v. City of Seaside, et al, Case No. M66343). The latter court case resulted in a decision which determined the initial Operating Safe Yield for the Seaside Basin is 5,600 Acre-Feet (Coastal Subarea is 4,611 Acre-Feet and 989 Acre-Feet for the Laguna Seca Subarea). Water availability from the Seaside Basin will be further reduced under the court decision beginning in January 2009. Statewide drought contingency planning is underway.

The District has a contemporary, flexible and innovative plan to address water shortages: The Expanded Water Conservation and Standby Rationing Plan was adopted in 1999 as Regulation XV of the District’s Rules and Regulations. The plan responds to increasing degrees of water supply restrictions. The early stages of the program assist the community in conserving water so that mandatory rationing may be avoided. To date, the Peninsula water users have been in Stages 1-3 at various times since the Plan’s adoption.

Stages 4-7 of the Expanded Water Supply and Standby Rationing Plan respond to drought or to other emergency reductions in water supply. Stage 4 provides the entry point for non-CAW water distribution systems to join the efforts undertaken by CAW customers in the lower stages (Stages 1-3). During Stage 4, District staff contact and obtain information from all effected water distribution system operators in preparation for Stage 5 (20% rationing). In Stage 5, all systems must reduce water use by 15 percent. CAW and Seaside Basin customers must reduce 15 percent from the Operating Safe Yield. CAW customers have the benefit of using the limited and restricted waters from the Carmel River to augment their needs.

EXHIBIT

19-A Draft Contingency Implementation Plan

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