ITEM: PUBLIC HEARINGS
16.	CONSIDER FIRST READING OF ORDINANCE NO. 137 -- AMEND REGULATION XV, EXPANDED WATER CONSERVATION AND STANDBY RATIONING PLAN
Meeting Date:		October 20, 2008	Budgeted:	N/A
From:		Darby Fuerst,	Program/	N/A
		General Manager	Line Item No.:
Prepared By:		Stephanie Pintar	Cost Estimate:	N/A
General Counsel Approval: Approved
Committee Recommendation: The Water Demand Committee reviewed the concept ordinance on September 29, 2008, and unanimously recommended approval. The Technical Advisory Committee reviewed the concept ordinance on October 7, 2008 and recommended approval.
CEQA Compliance: Statutory Exemption under Section 15282(w) of the CEQA Guidelines (14 CCR §15282w).

SUMMARY: As part of the Settlement Agreement of the Seaside Groundwater Basin, between MPWMD and California American Water (CAW) (Exhibit 16-A), MPWMD agreed to amend Regulation XV, the Expanded Water Conservation and Standby Rationing Plan, to address regulatory rationing and suspension of water banking, as well as to ensure consistency in noticing requirements and compliance triggers. The District also agreed to amend its definition of the Monterey Peninsula Water Resource System to include the Laguna Seca Subarea, in which the Ryan Ranch, Bishop and Hidden Hills subsystems of CAW operate. This latter action was taken at the September 22, 2008 Board meeting with the adoption of Ordinance No. 135. The remaining agreed-upon actions are addressed in Ordinance No. 137 (Exhibit 16-B).

DISCUSSION: The following is a rule-by-rule overview of the significant changes to Regulation XV (the Expanded Water Conservation and Standby Rationing Plan) affected by Ordinance No. 137. In general, the language of Regulation XV has been cleaned up to remove redundancy and unnecessary language. In some cases, portions of a rule that have been deleted have been relocated to the findings (e.g., Rule 161-A).

Rule 11 – Definitions

1. The definition of CAW’s subsystems as “Satellite Systems” has been deleted in response to requests by representatives of customers in the Bishop and Hidden Hills systems to be defined as separate water distribution systems. In place of “Satellite Systems,” Ordinance No. 137 defines the individual subsystems, namely Bishop, Hidden Hills and Ryan Ranch.

2. The following definitions were clarified: Large Residential Water User, Main California American Water System, and Mobile Water Distribution System.

Rule 160 – General Provisions

1. Adds a statement that Stage 4 includes an additional conservation response to comply with regulatory restrictions.

2. Adds a statement that Stages 5-7 include a regulatory trigger.

3. Eliminates the Unaccounted For Water Use exemption for the CAW subsystems, making the Board’s current standard of 7 percent apply to all CAW systems. Note however, that actual unaccounted for water use is used for purposes of determining the rations. This is necessary to ensure that water rations are based on actual average system-wide water losses.

Rule 161-163, Conservation Stages 1-3

1. Tables XV-1 and XV-2 have been amended to correct a rounding error adopted with Ordinance No. 135.

2. Allows the Emergency Trigger for Stage 3 to apply to any Water Distribution System upon Resolution of the Board.

3. Requires CAW to notify customers 30-day prior to implementation of emergency rates in keeping with California Public Utilities Commission (CPUC) requirements.

Rule 164 – Stage 4

1. Add a new response for exceeding regulatory limits shown in Tables XV-1 and XV-2. In the event of continued noncompliance (i.e., more than 30 days) with regulatory limits during Stage 3, Stage 4 will require CAW to contact its customers and request suspension of all outdoor water use. This response repeats the dual trigger that applies to the Bishop, Hidden Hills and Ryan Ranch systems in Stages 2 and 3.

2. Allows sunset of Stage 4 without Board action when regulatory compliance has been achieved.

3. Allows sunset of Stage 4 with Board action to reduce the conservation Stage to a lower Stage as necessary for good cause.

4. Adds additional water waste enforcement efforts to Stage 4.

Rule 165 -167, Rationing Stages 5-7

1. The most significant addition to Stages 5-7 is a trigger for rationing in response to a final court action forcing production cutbacks in any Water Distribution System that relies on production from the Main California American Water system in any way. For example: Reductions in the production levels of 16-34% would result in Stage 5; reductions of 35-49% would result in Stage 6; and reductions of 50% or more would result in Stage 7. Reduction ranges are carried through Stage 7.

2. Regulatory rationing as a result of final legal orders that restrict production would apply to the Laguna Seca subarea water systems as long as those systems rely on the main system to offset their use, to avoid replenishment fees or to provide emergency water supplies. At this time, the CAW subsystems (i.e., Bishop, Hidden Hills and Ryan Ranch) are limited to 345 acre-feet annually (AFA). During Water Year 2008, the subsystems produced 533 AF. There are options for CAW to eliminate the subsystems’ reliance on the main system, such as purchasing water rights from other users, developing new supply, or paying replenishment fees.

3. Regulatory rationing triggered by a final legal order would continue until the triggering order has been lifted or no longer applies to an affected Water Distribution System.

4. Sunset of Stage 5 could trigger any lesser Stage for good cause.

5. Notification of Non-CAW Water Distribution Systems would occur by published notice rather than by individual letters. During Stage 4, MPWMD would collect necessary information from other Water Distribution Systems in preparation for Stage 5 and above and would put all Water Distribution Systems on notice that rationing was imminent.

6. Unaccounted For Water Use is calculated using the actual average for the preceding 12 months, rather than by using the Board’s Unaccounted For Water Use standard of seven percent. This is necessary to accurately account for water use and to fairly determine water rations. This action was agreed to in the August 11, 2008 Settlement Agreement.

7. Water Distribution Systems with 10 or more connections will have a “ration” for Unaccounted For Water Use. There are 11 systems that meet this standard in the MPWMD.

8. The Stage 5 Moratorium (Rule 165-F) adds language to recognize Water Entitlements issued by the District in keeping with the contractual agreements.

9. A minimum per person ration of 35 gallons per day has been set for each of the three rationing Stages. This standard is listed in the 2008 Drought Urban Guidebook published by the State of California, Department of Water Resources, Office of Water Use Efficiency and Transfers and applies to “inside residential use”. The data are from the Tampa (Florida) Water Department Residential Water Conservation Study: The Impacts of High Efficiency Plumbing Fixture Retrofits in Single-Family Homes, January 8, 2004. In the event that the minimum standard is set in any rationing stage, customers unable to meet the health and safety targets will receive information or a home water audit that helps them to find and repair leaks.

10. Adoption of additional water use restrictions by Board Resolution has been added to each of the three rationing Stages. The language in the ordinance includes a number of suggested conservation measures that the Board may consider.

Rule 168 – Water Banks

1. In compliance with the August 11, 2008 Settlement Agreement, Water Banks are suspended until (a) CAW completes the installation of its new computer system and completes the programming needed to calculate Water Banking credits; or (b) MPWMD completes computer programming needed to calculate Water Banking credits; or (c) December 31, 2010, whichever occurs first.

2. During the suspension of Water Banking, Water Users shall be excused the first time a Water Ration is exceeded in a Ration Year. Second and subsequent offenses are enforced.

Rule 169 – Water Rationing Variance

Mandatory Conditions of Approval have been added to the rationing variance section. These include installation of low water consumption technology and drip irrigation when an irrigation system is installed.

Rule 172 – Landscape Water Audits

1. A requirement that Landscape Water Audits and Budgets be completed when a Dedicated Irrigation Meter is installed has been added to Rule 172.

2. A clear procedure for CAW to review and identify customers that require Landscape Water Audits and Landscape Water Budgets has been added. A response time for customers to contact CAW to arrange for an audit has also been added.

Rule 23-B-2 – Mandatory Conditions for Action on an Application for a Water Permit to Connect to or Modify an Existing Water Distribution System

Requirements adopted in Ordinance No. 135 (August 18, 2008) requiring separate water meters for outdoor irrigation and fire protection are relocated to Rule 23-B-2 from Rule 161-F and Rule 161-G.

Committee Review

Concepts incorporated in Draft Ordinance No. 137 were reviewed by the Water Demand Committee (September 29, 2008) and the Technical Advisory Committee (TAC) on October 7, 2008. Both committees recommended approval of the ordinance to the Board.

BACKGROUND: Since 1999, MPWMD’s Regulation XV, Expanded Water Conservation and Standby Rationing Program, in combination with an extensive public awareness campaign and comprehensive water rate structure for conservation, emergency and rationing rates, has enabled compliance with State Water Resources Control Board (SWRCB) Order No. WR 95-10. The plan also provides the foundation for water rationing in the event of drought or other emergency reductions in water supply.

RECOMMENDATION: The Board should receive comments from the public, discuss the ordinance, and provide direction to staff. Staff recommends the Board approve the first reading of Ordinance No. 137.

Staff will process this ordinance under a Statutory Exemption under Section 15282(w) of the CEQA Guidelines (14 CCR §15282w). This exemption is for adoption of Urban Water Management Plans, of which a water rationing plan is one component.

IMPACT ON STAFF/RESOURCES: Staff has not identified any impacts to staff or resources related to the proposed revisions.

EXHIBITS

16-A Settlement Agreement and Amendment

16-B Draft Ordinance No. 137

U:\staff\word\boardpacket\2008\2008boardpackets\20081020\PubHrgs\16\item16.doc