EXHIBIT 16-B

PRELIMINARY DRAFT ORDINANCE NO. 137

AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT AMENDING REGULATION XV, THE EXPANDED WATER CONSERVATION AND STANDBY RATIONING PLAN

FINDINGS

1. The Water Management District is charged under the Monterey Peninsula Water Management District Law with the integrated management of the ground and surface water resources in the Monterey Peninsula area.

2. The Water Management District has general and specific power to cause and implement water conservation activities as set forth in Sections 325 and 328 of the Monterey Peninsula Water Management District Law.

3. This ordinance is enacted to respond to present and threatened water emergencies, as provided by Section 332 of the District Law. Water emergencies addressed by this ordinance are created by legal circumstances which constrain the amount of water that is available to serve water users in the Monterey Peninsula area.

4. This ordinance reflects the Settlement Agreement between MPWMD and California American Water regarding CPUC filing A.07-12-010. The Settlement Agreement was dated August 11, 2008 and amended October 8, 2008. As part of the agreement, MPWMD agreed to amend Regulation XV to include regulatory rationing, amend its definition of the Monterey Peninsula Water Resources System to include the California American Water systems located in the Laguna Seca Subarea (accomplished upon adoption of Ordinance No. 135 on September 22, 2008), suspend Water Banking until it can be successfully implemented by either MPWMD or California American Water, and to modify the rationing plan to use the current 12-month rolling average for Unaccounted For Water when determining Water Rations.

5. 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.

6. This ordinance clarifies the language of Regulation XV to remove redundancy and unnecessary language.

7. This ordinance deletes the definition “Satellite Systems” in response to requests by representatives of customers in the Bishop and Hidden Hills systems to define each system separately. In place of “Satellite Systems,” Ordinance No. 137 defines the individual California American Water subsystems, namely Bishop, Hidden Hills and Ryan Ranch.

8. This ordinance clarifies the following definitions: Large Residential Water User, Main California American Water System, and Mobile Water Distribution System.

9. This ordinance adds a statement that Stage 4 includes an additional conservation response to comply with regulatory restrictions.

10. This ordinance adds a statement that Stages 5-7 include a regulatory trigger.

11. This ordinance 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.

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

13. This ordinance allows the Emergency Trigger for Stage 3 to apply to any Water Distribution System upon Resolution of the Board.

14. This ordinance requires CAW to notify customers 30-days prior to implementation of emergency rates in keeping with California Public Utilities Commission (CPUC) requirements.

15. This ordinance adds 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 requires 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.

16. This ordinance allows the sunset of Stage 4 without Board action when regulatory compliance has been achieved.

17. This ordinance allows the Board to sunset any Stage to a lower rationing or conservation Stage as necessary for good cause.

18. This ordinance adds additional water waste enforcement efforts to Stage 4.

19. This ordinance adds a trigger to rationing Stages 5-7 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.

20. This ordinance adds the regulatory rationing trigger 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. The CAW subsystems (i.e., Bishop, Hidden Hills and Ryan Ranch) are limited to 345 acre-feet annually (AFA) in 2008. 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.

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

22. This ordinance causes notification of Non-CAW Water Distribution Systems 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.

23. This ordinance calculates the Unaccounted For Water Use 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.

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

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

26. 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.

27. 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.

28. 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.

29. 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.

30. 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.

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

32. A clear procedure for CAW to review and identify customers that require Landscape Water Audits and Landscape Water Budgets has been added to Rule 172. A response time for customers to contact CAW to arrange for an audit has also been added.

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

34. Conceptual Ordinance No. 137 was reviewed by the Water Demand Committee (September 29, 2008) and the Technical Advisory Committee (TAC) on October 7, 2008. Both committees supported adoption by the Board.

35. This ordinance is processed 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.

36. The following District Rules shall be amended by this ordinance: Rule 11 (Definitions), Rule 160 (General Provisions), Rule 161 (Stage 1 Water Conservation), Rule 162 (Stage 2 Water Conservation), Rule 163 (Stage 3 Water Conservation), Rule 164 (Stage 4 Water Rationing), Rule 165 (Stage 5 Water Rationing), Rule 166 (Stage 6 Water Rationing), Rule 167 (Stage 7 Water Rationing), Rule 168 (Water Banks), Rule 169 (Water Rationing Variance), Rule 170 (Water Use Survey), Rule 171 (Water Waste and Non-Essential Water Use Enforcement), Rule 172 (Landscape Water Audits), Rule 173 (Regulation of Mobile Water Distribution Systems), Rule 174 (Regulation of Well Owners or Operators and Extractors), Rule 175 (Water Rationing Enforcement), and 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).

37. This ordinance is exempt from the California Environmental Quality Act (CEQA) as a Statutory Exemption pursuant to Section 282(w) of the CEQA guidelines.

NOW THEREFORE be it ordained as follows:

ORDINANCE

Section One: Short Title

This ordinance shall be known as the 2008 Comprehensive Revision to the Expanded Water Conservation and Standby Rationing Plan of the Monterey Peninsula Water Management District.

Section Two: Purpose

This ordinance amends the Expanded Water Conservation and Standby Rationing Plan. This ordinance also establishes a per person minimum water requirement for health and welfare, sets minimum standards for granting Water Ration variances, and makes minor modifications to the Expanded Water Conservation and Standby Rationing Plan to add clarity. Finally, this ordinance expands the conservation program to Stage 4 to comply with currently anticipated regulatory limits and planned reductions within the Seaside Groundwater Basin.

The entire Regulation XV is provided in this ordinance. Proposed new language is shown in bold italics. Proposed deletions are shown in highlighted strikeout.

Section Three: Amendment to Rule 11

Rule 11 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face. Numbering is provided for convenience and should not be transferred to the permanent Rule 11.

1. BISHOP WATER DISTRIBUTION SYSTEM – “Bishop Water Distribution System” or “Bishop” shall mean the California American Water subunit as described in the purchase agreement between Bishop Water Company and California American Water dated September 1, 1996.

2. HIDDEN HILLS SYSTEM – “Hidden Hills System” shall mean the California American Water subunit as described in the purchase agreement between Carmel Valley Mutual Water Company and California American Water recorded July 8, 1994, Document #49389 Reel 3125 Page 696. The Hidden Hills System derives its Source of Supply from the Laguna Seca Subarea of the Seaside Basin.

3. LARGE RESIDENTIAL WATER USER – “Large Residential Water User” shall mean any Residential User consuming an average of 32 units or more each month (23,936 gallons) or at least 384 units (287,232 gallons) in the previous Water Year year prior to establishment of a Landscape Water Budget.

4. MAIN CALIFORNIA AMERICAN WATER SYSTEM – “Main California American Water System” shall mean the California American Water’s Water Distribution System that derives its Source of Supply from the Carmel River System and the Seaside Coastal Groundwater Basin.

5. MOBILE WATER DISTRIBUTION SYSTEM - “Mobile Water Distribution System” means any mobile Potable or Subpotable water supply delivery that originates at a location apart from the Site of use and that is delivered via a truck or other movable container. This definition process, includesing, but is not limited to, trucked water, used for distribution of water from a Source of Supply to a User for utilization upon the User’s property. This definition shall not apply to deliveries of water by commercial companies in volumes less than or equal to 55 gallons per container.

6. RYAN RANCH WATER DISTRIBUTION SYSTEM – “Ryan Ranch Water Distribution System” or “Ryan Ranch” shall mean shall mean the California American Water subunit as described in the purchase agreement between Neuville Co. N.V. (a Delaware Corporation) and California American Water dated April 30, 1990.

7. SATELLITE SYSTEMS -- “Satellite Systems” shall mean California American Water's smaller distribution systems along State Route 68 between Monterey and Salinas that derive their Source of Supply from the Laguna Seca Subarea of the Seaside Basin, excluding Hidden Hills System. These Satellite Systems include the Ryan Ranch and Bishop Units.

Section Four: Amendment to Rule 160

Rule 160 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 160 - GENERAL PROVISIONS

A. All Water Users within the Monterey Peninsula Water Management District shall comply with the District’s Water Waste and Non-Essential Water Use prohibitions and the water conservation requirements of Regulation XIV.

B. Prohibitions against Water Waste and Non-Essential Water Use shall be enforced by the District and its designated agents in accordance with Rule 171 (Water Waste and Non-Essential Water Use Enforcement) and Regulation XI, unless indicated otherwise.

C. Stage 1 Water Conservation shall apply to all Water Users within the Monterey Peninsula Water Management District.

D. Stages 2 and 3 Water Conservation The provisions of this Regulation are intended to maintain California American Water production within the limits set by the State Water Resources Control Board (SWRCB) and by the Seaside Basin Adjudication Decision (Seaside Decision).

E. Stage 1 Water Conservation through Stage 3 7 Water Conservation shall apply to Water Users of any California American Water Distribution System where that system derives its Source of Supply from the Monterey Peninsula Water Resource System (MPWRS) for as long as California American Water is subject to legal or regulatory water production limitations.

F. Stage 4 shall provide an additional response to regulatory compliance that shall be implemented to strengthen the limitations imposed through Stage 3 in the event that regulatory compliance is not achieved by Stage 3 requirements.

FG. Stage 4 Water Rationing through Stage 7 Water Rationing respond to limitations in supply caused by inadequate system inflow and storage, regulatory restrictions, or emergency situations that require water reductions.

GH. Stage 4 Water Rationing through Stage 7 Water Rationing may apply to all any Water Distribution System Water Users and Water Users within the Monterey Peninsula Water Resource System as a response to limited water supply. These Sstages shall also serve as responses to emergency situations where immediate reductions in water use are necessary to ensure public health, safety or welfare. This Regulation authorizes the Board of Directors to determine by Resolution that any Water Distribution System or set of Water Users within the Monterey Peninsula Water Management District shall be subject to Stage 4 Water Rationing through Stage 7 Water Rationing as provided in this Regulation.

I. Stage 5 through Stage 7 shall apply to reductions in water supply caused by a final Cease and Desist Order or other final order of the court, Watermaster, or other regulatory authority.

HJ. As to water derived from the MPWRS, California American Water shall maintain Unaccounted for Water Use in its MPWRS distribution system at or below seven (7) percent. Average losses of more than seven (7) percent during the most recent twelve-month period shall be considered Water Waste. This limitation shall not affect any California American Water system east of, and including, the Ryan Ranch subunit.

IK. California American Water shall amend its Urban Water Management Plan and its Rule 14.1, Water Conservation and Rationing Plan -- Monterey District, to conform to this Regulation. A copy of Rule 14.1 shall be filed with the California Public Utilities Commission (CPUC) and the District within 30 days of the effective date of any amendment to this Regulation.

JL. At least 10 days prior to a first reading by the Board of amendments to Regulation XV, a copy of the proposed changes shall be provided to the CPUC Division of Ratepayer Advocates (DRA).

Section Five: Amendment to Rule 161

Rule 161 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 161 - STAGE 1 WATER CONSERVATION

Stage 1 Water Conservation is defined as the first stage in the District’s Expanded Water

Conservation and Standby Rationing Plan. During Stage 1:

A. Stage 1 takes action to maintain California American Water production from the MPWRS within the limits set by the SWRCB and the Seaside Decision by increasing conservation activities and preparing for further stages of conservation and rationing.

BA. During Stage 1 Water Conservation, The California American Water Distribution System shall maintain its annual Water Year (October 1 through September 30) water production from the Carmel Valley below 11,285 Acre-Feet (20 percent below historical production as determined in 1995). This quantity may be modified by the SWRCB.

CB. During Stage 1 Water Conservation, The California American Water Distribution System shall maintain its annual Water Year (October 1 through September 30) water production from the Seaside Groundwater Basin in complyiance with the mandatory production limits imposed by the Seaside Watermaster.

DC. California American Water shall obtain and maintain Water User survey information for its Water Users in compliance with Rule 170.

ED. California American Water, in coordination with the District, shall conduct Landscape Water Audits and establish Landscape Water Budgets for all Water Users subject to Rule 172. Annually, at the beginning of the Water By November 1^st of each yYear, California American Water shall review its records to verify that all identify Water Users required by Rule 172 to have a Landscape Water Budget have met the requirement. Property owners/account holders customers that have not met this requirement are required to obtain a Landscape Water Audit and Landscape Water Budget shall be notified of this requirement within 30 days.

F. All Mobile Water Distribution Systems that obtain water from within the District or that deliver water within the District shall comply with Rule 173, Regulation of Mobile Water Distribution Systems.

G.. All Non-Residential New Structures receiving a Water Permit after October 1, 2008 that include irrigated areas beyond ten (10) feet of any building shall utilize a separate water meter to measure all exterior water uses.

H.. All New Structures receiving a Water Permit after October 1, 2008 shall have separate water meters for fire suppression systems.

Section Six: Amendment to Rule 162

Rule 162 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 162 - STAGE 2 WATER CONSERVATION

A. Stage 2 Water Conservation is defined as the second stage in the District’s Expanded Water Conservation and Standby Rationing Plan. that takes action to maintain California American Water production from the MPWRS below legal and regulatory constraints. This is accomplished by requiring implementation of Landscape Water Budgets for irrigators of three acres or more, Large Residential Water Users, and Water Users with Dedicated Irrigation Meters.

B. Stage 2 Water Conservation shall be enforced in the Main System when California American Water production from the MPWRS exceeds the year-to-date at month-end targets as displayed in Table XV-1.1.

1. The monthly distribution of water production from MPWRS, as shown in Table XV-1 shall be approved by the Board of Directors as part of the Quarterly Water Supply Strategy and Budget process. The Board shall hold public hearings during the Board’s regular meetings in September, December, March, and June, at which time the Board may modify Table XV-1 by Resolution.

[THIS SPACE INTENTIONALLY LEFT BLANK]

Table XV-1

Regulatory Water Production Targets

for California American Water Main System from Sources

Within the Monterey Peninsula Water Resource System

(All Values in Acre-Feet)

Month	Monthly Target	Year-to-Date at Month-End Target
October	1,377	1,377
November	1,0821	2,458
December	993	3,452
January	961	4,413
February	878	5,291
March	1,012	6,302
April	1,124	7,427
May	1,424	8,850
June	1,522	10,372
July	1,640	12,012
August	1,633	13,645
September	1,489	15,134
TOTAL	15,134	--
Note: Note: Monthly and year-to date at month-end production targets are based on the annual production limit specified for the California American Water (CAW) systems from Carmel River sources in State Water Resources Control Board Order No. WR 95-10 (11,285 acre-feet) and the initial annual production limit specified for the CAW California American Water systems from sources in the Coastal Subareas (3,504 acre-feet) and the Laguna Seca Subarea (345 acre-feet) of the Seaside Groundwater Basin in the Seaside Basin Adjudication Decision. This Main System total (14,789 acre-feet) was distributed monthly based on CAW’s California American Water’s reported monthly average production for its Main System during the 1998 through 2007 period and the Satellite Systems subsystem total (345 acre-feet) was distributed monthly based on CAW’s California American Water’s reported monthly average production for its Satellite Systems the Laguna Seca Subarea during the 2000 through 2007 period. All references to Satellite Systems shall include the Hidden Hills System.

Table XV-2

Regulatory Water Production Targets

for California American Water Satellite Systems from Sources

Within the Laguna Seca Subarea of the Monterey Peninsula Water Resource System

(All Values in Acre-Feet)

Month	Monthly Target	Year-to-Date at Month-End Target
October	34	34
November	23	57
December	19	75
January	16	91
February	154	106
March	19	125
April	24	149
May	33	183
June	38	221
July	43	264
August	42	305
September	40	345
TOTAL	345	--
Notes: Monthly and year-to-date at month-end production targets are based on the annual production limit specified for the California American Water (CAW) subsystems Satellite Systems from sources in the Laguna Seca Subarea (345 acre-feet) of the Seaside Groundwater Basin in the Seaside Basin Adjudication Decision. This value (345 acre-feet) was distributed monthly based on CAW’s reported monthly average production for its subsystems Satellite Systems located in the Laguna Seca Subarea during the 2000 through 2007 period. Total Production shown on this Table shall incorporate increased water supplies as may be recognized by the Seaside Basin Watermaster. All references to Satellite Systems shall include the Hidden Hills System.

C. Stage 2 Water Conservation shall be enforced in the Bishop, Hidden Hills and/or Ryan Ranch subsystems Satellite Systems and in the Hidden Hills System when California American Water production from the MPWRS for its Main, Satellite, and Hidden Hills Systems has exceeded the year-to-date at month-end production in those systems as shown in Table XV-1 and California American Water production from the MPWRS for its subsystems Satellite Systems and Hidden Hills System has exceeded the year-to-date at month-end production as shown in Table XV-2.

The monthly distribution of water production shown in Table XV-2 shall be approved by the Board of Directors as part of the Quarterly Water Supply Strategy and Budget process. The Board may modify Table XV-2 by Resolution following a public hearing held during the Board’s regular meeting in September, December, March, or June.

D. STAGE 1 REQUIREMENTS CONTINUE: Requirements of Rule 161 imposed by implementation of the Expanded Water Conservation and Standby Rationing Plan through (Stage 1 Water Conservation) shall remain in force during Stage 2.

E. IMPLEMENTATION OF LANDSCAPE WATER BUDGETS: All Water Users within each system subject to Stage 2 required to obtain a Landscape Water Budget under District Rule 172 are required to manage outdoor irrigation within the Landscape Water Budget assigned to the property.

F. ENFORCEMENT OF LANDSCAPE WATER BUDGET WATER WASTE: Water use in excess of the established Landscape Water Budget shall be considered Water Waste.

G. SUNSET OF STAGE 2 WATER CONSERVATION: Without further action of the Board of Directors, the provisions of Stage 2 Water Conservation shall be rescinded sunset for that water system(s) and water use restrictions shall revert to Stage 1 Water Conservation upon that Water Distribution System’s compliance with the year-to-date at month-end production goal for two (2) consecutive months in the subsequent Water Year.

H. NOTICE: California American Water shall provide an annual reminder notice to MPWRS Users with Landscape Water Budgets to report modifications in Landscaping which could alter an existing budget.

I. MONTHLY CONSUMPTION REPORTS: During any Stage 2, 3, 4, 5, 6, or 7, California American Water shall provide the District with monthly consumption reports in a format approved by the District. Reports shall be provided within fifteen (15) days of the close of the preceding month.

Section Seven: Amendment to Rule 163

Rule 163 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 163 - STAGE 3 WATER CONSERVATION

A. STAGE 3 DEFINITION: Stage 3 Water Conservation is defined as the third stage in the District’s Expanded Water Conservation and Standby Rationing Plan. that takes action to maintain California American Water use in the MPWRS below legal and regulatory constraints. It provides a procedure to enable emergency temporary increases in the upper block volume rates and requires increased action by California American Water to reduce Unaccounted For Water Use and monthly reporting of actions taken. Stage 3 Water Conservation may also be triggered upon Resolution of the Board of Directors when there is a need for an immediate water use reduction in response to an unexpected water production increase.

B. UNACCOUNTED FOR WATER USE: Upon implementation of Stage 3 Water Conservation, California American Water shall immediately submit a plan to the General Manager to reduce Unaccounted For Water Uses in its MPWRS Water Distribution Systems to seven (7) percent or less, measurered by the most recent twelve-month rolling average, and shall immediately act on such plan. California American Water shall provide a progress report on Unaccounted For Water Use to the Board of Directors monthly until during Stage 3 is sunset.

BC. REGULATORY TRIGGER MAIN SYSTEM: Stage 3 Water Conservation shall be enforced in its Main California American Water System when any of the following criteria has been met: 1) California American Water’s year-to-date production from the MPWRS exceeds the year-to-date production target shown in Table XV-1 by 5 percent or more at the end of the first quarter of the Water Year, or 2) California American Water’s year-to-date production from the MPWRS shown in Table XV-1 exceeds the year-to-date production target by 4 percent or more at the end of January, or the year-to-date target by 2.5 percent or more at the end of February, or the year-to-date target by 1 percent or more at the end of March, or 3) California American Water’s year-to-date production from the MPWRS shown in Table XV-1 on a year-to-date basis exceeds the year-to-date targets for a consecutive seven-day period during the months of April, May or June; or 4) the California American Water’s production from the MPWRS shown in Table XV-1 on a year-to-date basis exceeds the year-to-date target on any single day during July, August, or September; or 5) a Resolution has been adopted by the Board in accord with Section D below.

CD. REGULATORY TRIGGER – SATELLITE SYSTEMS & HIDDEN HILLS SYSTEM BISHOP, HIDDEN HILLS AND RYAN RANCH -- Stage 3 Water Conservation shall be enforced in California American Water’s Satellite Systems and the Hidden Hills System the subsystems when any of the criteria in Section B has been met and when any of the following criteria has been met: 1) California American Water’s year-to-date production from the MPWRS for the Satellite Systems and the Hidden Hills System Bishop, Hidden Hills and Ryan Ranch exceeds the year-to-date production target in Table XV-2 by 5 percent or more at the end of the first quarter of the Water Year, or 2) California American Water’s year-to-date production from the MPWRS for the Satellite Systems and the Hidden Hills System Bishop, Hidden Hills and Ryan Ranch exceeds the year-to-date production target shown in Table XV-2 by 4 percent or more at the end of January, or the year-to-date production target by 2.5 percent or more at the end of February, or the year-to-date production target by 1 percent or more at the end of March, or 3) California American Water’s year-to-date production from the MPWRS for the Satellite Systems and the Hidden Hills System Bishop, Hidden Hills and Ryan Ranch exceeds the year-to-date production target shown in Table XV-2 for a consecutive seven-day period during the months of April, May or June; or 4) ) California American Water’s year-to-date production from the MPWRS for the Satellite Systems and the Hidden Hills System Bishop, Hidden Hills and Ryan Ranch exceeds the year-to-date production target shown in Table XV-2 on any single day during July, August, or September; or 5) a Resolution has been adopted by the Board in accord with Section DE below.

DE. EMERGENCY TRIGGER: Stage 3 Water Conservation shall be implemented for any Water Distribution System upon Resolution of the Board of Directors when there is need for an immediate water use reduction is needed requirement.

EF. EMERGENCY RATE NOTICE: At least 30 days prior to implementation, California American Water shall notify its Water Users that Emergency Rates approved by the CPUC will be imposed upon the effective date of Stage 3 Water Conservation.

FG. STAGE 1 AND STAGE 2 REQUIREMENTS CONTINUE: Requirements imposed by implementation of the Expanded Water Conservation and Standby Rationing Plan through Rules 161 and 162 (Stage 1 and Stage 2) Water Conservation shall remain in force. Requirements may be modified or superseded by actions taken in future stages of the Expanded Water Conservation and Standby Rationing Plan.

GH. SUNSET OF STAGE 3 WATER CONSERVATION: Without further action by the Board of Directors, the provisions of Stage 3 Water Conservation shall be rescinded and Water Users shall revert to Stage 1 Water Conservation upon that Water Distribution System’s compliance with the applicable year-to-date at month-end production goal for two (2) consecutive months in the subsequent Water Year.

Regulatory compliance during a period of Stage 4 Water Rationing shall not cause a sunset of this provision.

HI. CONSERVATION NOTICE: California American Water shall provide notice of Stage 3 mandatory water conservation requirements with each bill.

IJ. CALIFORNIA AMERICAN WATER EMERGENCY RATES: California American Water shall implement the CPUC-approved Emergency Rate schedule to respond to Stage 3 water reduction requirements. California American Water shall file an Advice Letter with the CPUC to implement Emergency Rates after it has first met and conferred with the District at least five (5) days in advance of that filing. The General Manager may waive this time period for good cause.

Section Eight: Amendment to Rule 164

Rule 164 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 164 - STAGE 4 WATER CONSERVATION/RATIONING

A. STAGE 4 DEFINITION: Stage 4 Water Conservation/Rationing is defined as the fourth stage in the District’s Expanded Water Conservation and Standby Rationing Plan that responds to a drought situation or other threatened or existing emergency water supply shortage with a 15 percent reduction goal from system production limits for non-California American Water Users. Each Water Distribution System that is subject to Stage 4 shall also implement Stage 3 requirements.

Fifteen percent Water use reductions in the California American Water systems are achieved through Stage 3 Water Conservation. In the event that California American Water is not currently at Stage 3, California American Water shall implement Stage 3 Water Conservation for all affected systems upon declaration of Stage 4 Water Conservation/Rationing.

B. TRIGGER

1. Water Supply Limitation Physical Shortage Trigger

Stage 4 Water Conservation/Rationing shall become effective take effect for any Water Distribution System that relies on water supply from the Carmel River or the Coastal Seaside Basin of the Monterey Peninsula Water Resource System, on June 1 or such earlier date as may be set by the Board following the District’s May Board meeting if total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS on May 1 is less than 27,807 Acre-Feet and greater than 21,802 Acre-Feet. If total usable storage is equal to or greater than 27,807 Acre-Feet on May 1, no water rationing shall be imposed.

2. Regulatory Trigger Main System

Stage 4 shall be enforced in the Main California American Water System when Stage 3 has been in effect for at least thirty (30) days and the Main California American Water System’s year-to-date production from the MPWRS shown in Table XV-1 on a year-to-date basis exceeds the year-to-date targets for a consecutive seven-day period during the months of April, May or June; or California American Water’s production from the MPWRS shown in Table XV-1 on a year-to-date basis exceeds the year-to-date target on any single day during July, August, or September.

3. Regulatory Trigger Bishop, Hidden Hills and Ryan Ranch Systems

Stage 4 shall be enforced in the California American Water subsystems when any of the criteria in Section 3 has been met and when any of the following criteria has been met: 1) California American Water’s year-to-date production from the MPWRS for Bishop, Hidden Hills and Ryan Ranch exceeds the year-to-date production target in Table XV-2 by 5 percent or more at the end of the first quarter of the Water Year, or 2) California American Water’s year-to-date production from the MPWRS for Bishop, Hidden Hills and Ryan Ranch exceeds the year-to-date production target shown in Table XV-2 by 4 percent or more at the end of January, or the year-to-date production target by 2.5 percent or more at the end of February, or the year-to-date production target by 1 percent or more at the end of March, or 3) California American Water’s year-to-date production from the MPWRS for Bishop, Hidden Hills and Ryan Ranch exceeds the year-to-date production target shown in Table XV-2 for a consecutive seven-day period during the months of April, May or June; or 4) ) California American Water’s year-to-date production from the MPWRS for Bishop, Hidden Hills and Ryan Ranch exceeds the year-to-date production target shown in Table XV-2 on any single day during July, August, or September.

23. Emergency Trigger

Stage 4 Water Rationing shall be implemented for any Water Distribution System upon adoption of a Resolution of the Board of Directors. In that Resolution, the Board shall find when there is need for an immediate need to reduce system-wide production by fifteen percent (15%). water use reduction requirement in response to an unexpected water supply shortage.

C. Requirements previously imposed by implementation of the Expanded Water Conservation and Standby Rationing Plan shall remain in force. Requirements may be modified or superseded by actions taken in this or future stages of the Expanded Water Conservation and Standby Rationing Plan.

DC. SUNSET OF STAGE 4 WATER RATIONING

1. Water Supply Availability

Stage 4 Water Rationing shall continue to have force and effect until rescinded by Resolution of the Board of Directors. In that Resolution the Board shall find upon a determination that the total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS is greater than 27,807 Acre-Feet. This determination will normally be made at the Board’s May meeting. However, a determination to rescind Stage 4 Water Rationing may be made as early as the following January Board meeting can be made if the total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS is equal to or greater than 27,807 Acre-Feet on January 1.

2. In the event total usable storage is greater than 27,807 Acre-Feet, the General Manager shall review California American Water’s year-to-date production. Upon compliance with the monthly year-to-date goals specified in Table XV-1 of Rule 162 and, unless otherwise specified in the Resolution rescinding Stage 4 Water Rationing, Water Users shall revert to Stage 1 Water Conservation. If California American Water’s year-to-date production exceeds the year-to-date goal specified in Table XV-1 of Rule 162, California American Water Users shall revert to either Stage 2 or Stage 3 Water Conservation. If Satellite Systems and the Hidden Hills System year-to-date production in the California American Water subsystems exceeds the year-to-date target specified in Table XV-2 of Rule 162, Satellite Systems and the Hidden Hills System Bishop, Hidden Hills and Ryan Ranch Water Users shall revert to either Stage 2 or Stage 3 Water Conservation.

3. Regulatory Compliance

Upon order of the General Manager, and wWithout further action by the Board of Directors, the provisions of Stage 4 shall be rescinded and Water Users shall revert to a lower Stage of Water Conservation upon compliance with the applicable year-to-date at month-end production goal for two consecutive months in the subsequent Water Year.

34. Emergency

Upon correction of a water supply limitation caused by an emergency, Stage 4 Water Rationing shall sunset without action by the Board.

4. Restoration of Lesser Stage

The Resolution causing the sunset of Stage 4 may also trigger any lesser Stage as may be warranted for good cause by circumstances affecting a particular Water Distribution System, private Well, or Water User.

ED. NOTICE RELATED TO WATER SUPPLY AVAILABILITY

1. Upon direction of the General Manager, MPWMD shall notify all non-California American Water Distribution System Operators affected by Stage 4 Water Rationing that reductions in water use are necessary and that stricter water rationing use restrictions are is imminent. Water Distribution System Operators shall ensure that notices provided or required by the District shall be distributed to their Water Users. A copy of each notice shall be filed with the District as well as a current mailing list for all Water Users in that Ssystem. The District shall preserve the confidentiality of any mailing list provided pursuant to this Regulation.

2. Upon direction of the General Manager, tThe District shall notify publish a notice to inform all Water Users of private Wells (Single-Parcel Connection Systems) within the MPWRS that reductions in water use are necessary and that stricter water use restrictions are imminent. Notice shall be via first class mail and shall explain the requirements for Stage 4 Water Rationing and shall provide and/or request additional information from the private Well Owner as the General Manager deemsed necessary for the efficient operation of the rationing program.

3. California American Water shall provide notice to its customers that water rationing is imminent. California American Water shall further provide its customers with a survey form to indicate any change in the number of residents or the type of Non-Residential use. Surveys shall be returned to California American Water within 30 days.

E. NOTICE RELATED TO REGULATORY COMPLIANCE

1. Immediately upon implementation of Stage 4, California American Water shall notify all of its customers by telephone, by mail or by any media means reasonably available to suspend all outdoor water use and irrigation to avoid water rationing. California American Water shall periodically send reminder notices of these limits.

2. California American Water and MPWMD staff shall be observant of wasteful water use and shall respond by educating the violator. Repeat offenses of Water Waste and Non-Essential Water Use shall be enforced as provided in Regulation 10.

Section Nine: Amendment to Rule 165

Rule 165 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 165 - STAGE 5 WATER RATIONING

A. Stage 5 Water Rationing is defined as the fifth stage in the District’s Expanded Water Conservation and Standby Rationing Plan. that responds to a drought situation, or other threatened or existing emergency water supply shortage, or Cease and Desist Order with a 20 16-34 percent reduction goal from system production limits. Reductions are achieved by water use cutbacks by User Category and by per-capita Water Rations and a moratorium on Water Permits that Intensify Water Use.

B. TRIGGER

1. Water Supply Limitation Physical Shortage Trigger

Stage 5 Water Rationing shall become effective take effect for any Water Distribution System that relies on water supply from the Carmel River or the Coastal Seaside Basin of the Monterey Peninsula Water Resource System, on June 1 or such earlier date as may be set by the Board following the District’s May Board meeting if total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS on May 1 is less than 21,802 Acre-Feet and greater than 15,615 Acre-Feet. If total usable storage is equal to or greater than 27,807 Acre-Feet on May 1, no water rationing shall be imposed.

The General Manager may delay implementation of Stage 5 Water Rationing to ensure adequate operation of the program. Delays authorized by the General Manager shall not exceed ninety (90) days.

2. Cease and Desist Order or Other Order Limiting Production

Stage 5 shall be implemented upon execution of a final Cease and Desist Order by the State Water Resources Control Board or the Seaside Basin Watermaster Board, or other final court order that reduces available supplies:

a. By 16-34 percent over pre-1995 production (16,806 AFA) in any Water Distribution System that relies on supply from the California American Water Main System, or

b. By 16-34 percent in any other Water Distribution System that does not rely on production or production offsets (to avoid replenishment fees) from the California American Water Main System.

The General Manager may delay implementation of this Stage to ensure adequate operation of the program. Delays authorized by the General Manager shall not exceed ninety (90) days.

23. Emergency Trigger

Stage 5 Water Rationing shall also be implemented for any Water Distribution System, private Well, or Water User upon adoption of a Resolution of the Board of Directors. In that Resolution, the Board shall find when there is need for an immediate need to reduce system-wide production by twenty percent (20%). water use reduction requirement in response to an unexpected water supply shortage.

The General Manager may delay implementation of Stage 5 Water Rationing to ensure adequate operation of the program. Delays authorized by the General Manager shall not exceed 90 days.

C. SUNSET OF STAGE 5 WATER RATIONING

1. Water Supply Availability

Stage 5 Water Rationing shall continue to have force and effect until rescinded by Resolution of the Board of Directors. upon a determination In that Resolution, the Board shall find that the total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS is greater than 21,802 Acre-Feet. This determination will normally be made at the Board’s May meeting. However, a determination to rescind Stage 5 Water Rationing may be made as early as the following January Board meeting can be made if the total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS is equal to or greater than 27,807 Acre-Feet on January 1.

2. In the event total usable storage is greater than 27,807 Acre-Feet, the General Manager shall review California American Water’s year-to-date production. Upon compliance with the monthly year-to-date goals specified in Table XV-1 of Rule 162 and, unless otherwise specified in the Resolution rescinding Stage 5 Water Rationing, Water Users shall revert to Stage 1 Water Conservation. If California American Water’s year-to-date production exceeds the year-to-date goal specified in Rule 162 and Rule 163 Table XV-1 of Rule 162, California American Water Users shall revert to Stage 2 or Stage 3 Water Conservation.

3. Where Stage 5 has been triggered by a Cease and Desist Order or other order limiting production, Stage 5 shall continue until a Resolution of the Board of Directors is adopted that finds that the triggering order has been lifted or no longer applies to that Water Distribution System.

34. Emergency

Upon correction of a water supply limitation caused by an emergency, Stage 5 Water Rationing shall be rescinded by Resolution of the Board of Directors.

5. Restoration of Lesser Stage

The Resolution causing the sunset of Stage 5 may also trigger any lesser Stage as may be warranted for good cause by circumstances affecting a particular Water Distribution System, private Well, or Water User.

D. AFFECTED WATER USERS

Stage 5 Water Rationing shall apply to all The Board of Directors may, by variance, exempt a Water Distribution Systems, private Wells, or Water Users within the MPWRS unless specifically exempt by action of the Board of Directors or unless proof is provided to demonstrate from Stage 5 restrictions upon proof of a superior, unimpaired water right to exempt the Water Distribution System, private Well, or Water User from the Stage 5 rationing restrictions. Evidence of riparian water rights may be established by a Declaration under penalty of perjury, unless it is refuted by other proof. As necessary to ensure adequate water supplies, the Board of Directors may act within its discretion to authorize activation of Stage 5 Water Rationing within one or more Water Distribution Systems, private Wells, or Water Users in the District.

E. CONSERVATION REQUIREMENTS CONTINUE

Requirements imposed by implementation of Stage 1 the Expanded Water Conservation and Standby Rationing Plan through Stage 4 Water Conservation shall remain in force during Stage 5. Requirements may be modified or superseded by actions taken in this or future stages of the Expanded Water Conservation and Standby Rationing Plan.

F. MORATORIUM

Immediately following Upon declaration of Stage 5 Water Rationing, the District shall cease accepting Water Permit applications associated with Intensification of Use for any affected Water Distribution System, private Well, or Water User in the District. All pending Water Permits not issued within 120 days of declaration shall be suspended. This provision shall not suspend the issuance of Water Permits that utilize public or private Water Use Credits or where issuance of a Permit is required by prior agreement or Water Entitlement issued by the District.

G. REDUCTION GOAL

Stage 5 Water Rationing shall achieves water use reductions of 20 16-34 percent of the California American Water and non-California American Water system production limits in each User Category as follows: Residential single-family and multi-family, Commercial/Industrial, Public Authority, Golf Course, “Other,” Non-Revenue Metered Uses, and Reclaimed Water Users.

H. NOTICE

1. California American Water shall provide written notice of mandatory water rationing to every residence and to every Non-Residential business or Water User within the California American Water system via first-class mail at least thirty (30) days before the first day of rationing Stage 5 water use restrictions are imposed.

Further, At all times during Stage 5, California American Water shall send monthly reminders of water rationing in the water bill along with information showing the User’s Water Ration, the quantity of the Water Ration consumed, and the quantity of water available in the User’s Water Bank (when Water Banking is available). Finally, California American Water shall update survey information upon request.

2. All other Water Distribution System Operators affected by subject to Stage 5 Water Rationing restrictions shall provide written notice of mandatory water rationing to every residence and to every Non-Residential business or Water User within the Water Distribution System via first-class mail at least thirty (30) days before the first day of rationing Stage 5 water use restrictions are imposed.

Further, At all times during Stage 5, each Water Distribution System Operator shall send monthly reminders of water rationing along with information showing the Water Ration and the quantity of the Water Ration consumed by the Water User. Finally, the Water Distribution System Operator shall provide each Responsible Party with a survey form at least once each calendar year during Stage 5. Water Distribution System Operators shall ensure that notices provided or required by the District shall be distributed to the system Water Users.

3. Upon direction of the General Manager, tThe District shall notify publish a notice to inform all Water Users of private Wells (Single-Parcel Connection Systems) within the MPWRS at least thirty (30) days before the first day of Stage 5. Water Rationing. Notice shall be via first class mail and shall explain the requirements for Stage 5 Water Rationing and shall provide and/or request additional information from the private Well Owner as deemed necessary for the efficient operation of the program.

4. California American Water Rationing Rates.

California American Water shall implement the CPUC-approved rationing rate schedule. California American Water shall file an Advice Letter with the CPUC to implement rationing rates after it has first met and conferred with the District at least five (5) days in advance of that filing. The General Manager may waive this time period for good cause.

5. California American Water and all other Water Distribution System Operators and the District shall notify Water Users of the Sunset of Stage 5 Water Rationing. Notice shall be via first class mail. The District shall publish a notice to inform all Private Well Owners that Stage 5 has sunset.

I. RATIONS BY CATEGORY

Water Rations shall be determined by User Category. Each Water User within the Monterey Peninsula Water Resource System shall be classified in one of the following groups: Residential single-family and multi-family, Commercial/Industrial, Public Authority, Golf Course, “Other,” Non-Revenue Metered Use, and Reclaimed Water Users.

J. REDUCED CALIFORNIA AMERICAN WATER ANNUAL PRODUCTION DURING STAGE 5 WATER RATIONING

The California American Water annual production limit shall be reduced by 20 16-34 percent during Stage 5 Water Rationing. The resulting production limit shall be further reduced by the average Unaccounted For Water Use percentage of the Water Distribution System for the 12 months preceding Stage 5, and by a water rationing contingency determined by the Board. Seven (7) percent of the remainder shall be the maximum California American Water Unaccounted For Water Use ration. The remaining water shall be the California American Water annual production limit for all User Categories.

K. NON-CALIFORNIA AMERICAN WATER ANNUAL PRODUCTION LIMITS DURING STAGE 5 WATER RATIONING

Available production for other Water Distribution Systems other than the Main California American Water System subject to Stage 5 Water Rationing shall be determined using the same methodology as for California American Water without including a deduction for Unaccounted For Water Uses . Systems with less than ten (10) connections shall not include a deduction for Unaccounted For Water Use. The non-California American Water annual production limit for the Monterey Peninsula Water Resource System shall be used as the maximum production limit.

L. ESTABLISHING THE RATIONS

Rations for each User Category shall be determined by the General Manager by dividing the reduced available production by the percentage of use for each Water Distribution System subject to water rationing. Priority rations shall be given to Residential water needs to ensure health, safety and welfare. Residential Water Rations shall under no circumstance be less than 35 gallons per person per day. The percentage of use for each User Category shall be determined by the most recent unrationed Water Year (October 1 through September 30) data. provided by California American Water for Water Users of the Main California American Water System California American Water that derive water from the MPWRS, and by data provided by the District from its annual Well reporting program for non-California American Water Distribution Systems.

1. Residential Water Users

Each Residential Water User either served by a water meter reported as “single-family residential” by the Water Distribution System or served by a private Well shall have an equal portion of the water available to the single-family Residential category based upon the number of residents reported on the survey form.

2. Multi-Family Residential Water Users

Each multi-family Residential Water User either served by a water meter reported as “multi-family residential” by the Water Distribution System or served by a private Well shall have an equal portion of the water available to the multi-family Residential category based upon the number of residents reported on the survey form with the following exception:

a. Multi-Family Residential Sites with common laundry facilities on a separate water meter shall receive a one-unit Water Ration for each Dwelling Unit that has access to the facility. Each Dwelling Unit located on the Multi-Family Residential Site that has access to the common laundry facility shall have the Dwelling Unit ration reduced by one unit of water.

3. Commercial/Industrial Water Users

Each commercial/industrial Water User either served by a water meter reported as “commercial” or “industrial” by the Water Distribution System shall have a Water Ration determined by applying the current commercial Water Use Factors.

a. Mixed Use Water Users. Mixed Use Water Users shall be classified as Commercial Uses for the purposes of this program.

4. Public Authority

Public Authority Uses shall be rationed by Jurisdiction. Each Public Authority Water User may combine multiple accounts or Connections when the accounts are located within one Jurisdiction.

5. Golf Courses

Golf Courses supplied water exclusively by the California American Water or non-California American Water Distribution Systems or Wells may be rationed individually or, upon request to the General Manager, as a group.

6. Other

Water Users utilizing portable water meters or hydrant meters shall be required to employ Best Management Practices. California American Water shall be required to report monthly to the District the location and Responsible Party for all portable water meters and the amount of use from those meters. As deemed necessary to achieve the imposed reduction in use, the District may condition use of temporary Connections.

7. Non-Revenue Metered Users

Non-Revenue Metered Uses shall be rationed as a group with the following exception:

a. Irrigation required by the Mitigation Program adopted when the Water Allocation Program Environmental Impact Report was adopted in 1990, and as required by SWRCB Order No. WR 95-10, shall not be subject to reductions in use. Required irrigation of the Riparian Corridor shall be identified and reported separately from other Non-Revenue Metered Uses.

8. Non-California American Water Wells

Regulations for rationing non-California American Water Wells located within the MPWRS that are not supplying water to a distribution system shall be considered by the Board prior to implementation of Stage 5 Water Rationing.

98. Recycled Water Users

Recycled Water Irrigation Areas receiving water from the CAWD/PBCSD Wastewater Reclamation Project shall be subject to Stages 5 Water Rationing and higher for Potable water used during an Interruption or emergency, in accordance with contractual Agreements between the District and the respective Owners of the Recycled Water Irrigation Areas.

a. Before Project Expansion Is Completed. Under the agreements operative before the Project Expansion is Completed (as the capitalized terms are defined in Rule 23.5), the Owners of the Recycled Water Irrigation Areas shall have the respective irrigation requirements thereof satisfied to the same degree as any non-Project Golf Course or open space which derive their Source of Supply from the California American Water system. The irrigation requirements of the Recycled Water Irrigation Areas will be determined based on the most-recent non-rationed four-year average irrigation water demand, including both Recycled Water and Potable water, for each Recycled Water Irrigation Area. The use of Recycled Water, when available in sufficient quantities to satisfy the irrigation requirements of the Recycled Water Irrigation Areas, shall not be restricted by this requirement.

Each Recycled Water Irrigation Area shall be entitled to receive the average irrigation requirement determined above, reduced by the percentage reduction required by the current stage of rationing. If the quantity of Recycled Water that is available is less than the quantity of water that the Recycled Water Irrigation Area is entitled to, Potable water shall be provided to make up the difference and satisfy the irrigation requirements of the Recycled Water Irrigation Area to the same degree that the irrigation requirements of non- Project Golf Course and open space Users are being satisfied.

The District shall ensure that the water provided during water rationing is of adequate quality. If the quality does not satisfy the contractual agreement operative before the Project Expansion is deemed Completed (as the capitalized terms are defined in Rule 23.5), Potable water shall be provided in sufficient quantities to improve the quality of the Recycled Water.

This Subsection L-9-a shall cease to be operative once the Project Expansion is deemed to be Completed (as the capitalized terms are defined in Rule 23.5), and shall thereafter be of no force or effect.

b. When Project Expansion Is Completed. Under the agreements operative once the Project Expansion is deemed Completed (as the capitalized terms are defined in Rule 23.5), the Owners of the Recycled Water Irrigation Areas shall have the respective irrigation requirements thereof satisfied to the same degree as any non-Project Golf Course or open space which derives its Source of Supply from the California American Water system. The irrigation requirements of the Recycled Water Irrigation Areas will be determined based on the most-recent non-rationed four-year average irrigation water demand, including both Recycled Water and Potable water, for each respective Recycled Water Irrigation Area.

Each Recycled Water Irrigation Area shall be entitled to receive the average irrigation requirement determined above, reduced by the percentage reduction required by the current stage of rationing. If the quantity of Recycled Water that is available is less than the quantity of water that the Recycled Water Irrigation Area is entitled to, Potable water shall be provided to make up the difference and satisfy the irrigation requirements of the Recycled Water Irrigation Areas to the same degree that the irrigation requirements of non-Project Golf Course and open space Users are being satisfied.

The preceding sentence shall not apply to the extent that the irrigation requirements of any Recycled Water Irrigation Area are met with water legally available to Buyer from any source other than the Carmel River System or the Seaside Groundwater Basin, including percolating Groundwater underlying Buyer’s Property, to make up any such difference.

When Recycled Water (as defined in Rule 23.5) is available in sufficient quantities to satisfy the irrigation requirements of the Recycled Water Irrigation Areas, such irrigation shall not be subject to Stages 5 Water Rationing and higher, and neither Potable water nor any water described in the preceding sentence (whether or not it is Potable) shall be used for irrigation of the Recycled Water Irrigation Areas except to the extent allowed in the circumstances described in the next two sentences.

If there is an Interruption in Recycled Water deliveries to any Recycled Water Irrigation Area (as the capitalized terms are defined in Rule 23.5), the temporary use of Potable water for irrigating each such Recycled Water Irrigation Area is authorized in the manner described in Rule 23.5, Subsection F.

If MPWMD has adopted an ordinance in response to any emergency caused by drought, or other threatened or existing water shortage pursuant to section 332 of the Monterey Peninsula Water Management Law, said ordinance shall prevail over contrary provisions of this Rule. Notwithstanding the preceding sentence, Potable water shall be made available for irrigating tees and greens of the Recycled Water Irrigation Areas in sufficient quantities to maintain them in good health and condition during an Interruption, without any limitation on the duration.

The District shall have no obligation to furnish Potable water for irrigation of the Recycled Water Irrigation Areas except in the circumstances set forth above in this Subsection L-9-b.

If (1) an emergency or major disaster is declared by the President of the United States, or (2) a “state of war emergency,” “state of emergency,” or “local emergency,” as those terms are respectively defined in Government Code section 8558, has been duly proclaimed pursuant to the California Emergency Services Act, with respect to all or any portion of the territory of MPWMD, the provisions of this Subsection L-9-b shall yield as necessary to respond to the conditions giving rise to the declaration or proclamation.

This Subsection L-9-b shall be of no force or effect until the Project Expansion is deemed Completed (as the capitalized terms are defined in Rule 23.5), and shall thereafter be operative and of full force and effect.

M. By Resolution, tThe Board shall reconsider adopting restrictions on Non-Residential outdoor water use that may include any or all of the following and any other conservation method deemed feasible: Limit outdoor watering and irrigation to one day per week, or one day every other week;, or prohibit outdoor watering and irrigation with water from the affected water resource system(s); prohibit irrigation of turf and/or non-turf areas with water from the affected water resource system(s); discontinue irrigation of public landscaped areas; reduce Golf Course irrigation from the affected Water Distribution System(s) to a percentage of the amount required to water tees, greens and landing areas only; prohibit the use of water to wash any motor vehicle, motorbike, boat, trailer, airplane or other vehicle; use of water from hydrants for construction purposes or any other purposes other than fire fighting. The use of Recycled Water, when available, shall not be restricted by this requirement.

Section Ten: Amendment to Rule 166

Rule 166 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 166 - STAGE 6 WATER RATIONING

A. Stage 6 Water Rationing is defined as the sixth stage in the District’s Expanded Water Conservation and Standby Rationing Plan. that responds to a drought situation, or other threatened or existing emergency water supply shortage with a 35-49 percent reduction goal from system production limits. Reductions are achieved by water use cutbacks by User Category and by per-capita Water Rations and a moratorium on Water Permits that utilize Water Credits.

B. TRIGGER

1. Water Supply Limitation Physical Shortage Trigger

Stage 6 Water Rationing shall become effective take effect for any Water Distribution System that relies on water supply from the Carmel River or the Coastal Seaside Basin of the Monterey Peninsula Water Resource System, on June 1 or such earlier date as may be set by the Board following the District’s May Board meeting if total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS on May 1 is less than 15,615 Acre-Feet and greater than 9,610 Acre-Feet. If total usable storage is equal to or greater than 27,807 Acre-Feet on May 1, no water rationing shall be imposed.

The General Manager may delay implementation of Stage 6 Water Rationing to ensure adequate operation of the program. Delays authorized by the General Manager shall not exceed 90 days.

2. Cease and Desist Order or Other Court Order Limiting Production

Stage 6 shall be implemented upon execution of a final Cease and Desist Order by the State Water Resources Control Board or the Seaside Basin Watermaster Board, or other final court order on the California American Water System that reduces available supplies:

c. By 35-49 percent over pre-1995 production (16,806 AFA) in any Water Distribution System that relies on supply from the California American Water Main System, or

d. By 35-49 percent in any independently operated Water Distribution System that does not rely on production or production numbers from the California American Water Main System.

The General Manager may delay implementation of Stage 6 to ensure adequate operation of the program. Delays authorized by the General Manager shall not exceed 90 days.

23. Emergency Trigger

Stage 6 Water Rationing shall be implemented for any Water Distribution System, private Well, or Water User upon adoption of a Resolution of the Board of Directors. In that Resolution, the Board shall find when there is need for an immediate need to reduce system-wide production by thirty-five percent (35%). water use reduction requirement in response to an unexpected water supply shortage.

The General Manager may delay implementation of Stage 6 Water Rationing to ensure adequate operation of the program. Delays authorized by the General Manager shall not exceed 90 days.

C. SUNSET OF STAGE 6 WATER RATIONING

Stage 6 Water Rationing shall continue to have force and effect until rescinded by Resolution of the Board of Directors. upon a determination In that Resolution, the Board shall find that the total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS is greater than 15,615 Acre-Feet. This determination will normally be made at the Board’s May meeting. However, a determination to rescind Stage 6 Water Rationing may be made as early as the following January Board meeting can be made if the total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS is equal to or greater than 27,807 Acre-Feet on January 1.

2. In the event total usable storage is greater than 27,807 Acre-Feet, the General Manager shall review California American Water’s year-to-date production. Upon compliance with the monthly year-to-date goals specified in Table XV-1 of Rule 162 and, unless otherwise specified in the Resolution rescinding Stage 6 Water Rationing, Water Users shall revert to Stage 1 Water Conservation. If California American Water’s year-to-date production exceeds the year-to-date goal specified in Rule 162 and Rule 163 Table XV-1 of Rule 162, California American Water Users shall revert to Stage 2 or Stage 3 Water Conservation.

3. Where Stage 6 has been triggered by a Cease and Desist Order or other order limiting production, Stage 6 shall continue until a Resolution of the Board of Directors is adopted that finds that the triggering order has been lifted or no longer applies to that Water Distribution System.

4. Emergency

Upon correction of a water supply limitation caused by an emergency, Stage 6 Water Rationing shall be rescinded by Resolution of the Board of Directors.

5. Restoration of Lesser Stage

The Resolution causing the sunset of Stage 5 may also trigger any lesser Stage as may be warranted for good cause by circumstances affecting a particular Water Distribution System, private Well, or Water User.

D. AFFECTED WATER USERS

Stage 6 Water Rationing shall apply to all The Board of Directors may, by variance, exempt a Water Distribution Systems, private Wells, or Water Users within the MPWRS unless specifically exempt by action of the Board of Directors or unless proof is provided to demonstrate from Stage 6 restrictions upon proof of a superior, unimpaired water right to exempt the Water Distribution System, private Well, or Water User from the Stage 5 rationing restrictions. Evidence of riparian water rights may be established by a Declaration under penalty of perjury, unless it is refuted by other proof. As necessary to ensure adequate water supplies, the Board of Directors may act within its discretion to authorize activation of Stage 6 Water Rationing within one or more Water Distribution Systems, private Wells, or Water Users in the District.

E. Requirements imposed by implementation of the Expanded Water Conservation and Standby Rationing Plan through Stage 5 Water Rationing shall remain in force. Requirements may be modified or superseded by actions taken in this or future stages of the Expanded Water Conservation and Standby Rationing Plan.

F. Immediately following Upon declaration of Stage 6 Water Rationing, the District shall suspend acceptance of all Water Permit applications that utilize a public or private Water Use Credit for any affected system, private Well, or Water User. All pending Water Permits not issued within 120 days of declaration shall be suspended. This provision shall not suspend the issuance of Water Permits where issuance of a Permit is required by prior agreement or Water Entitlement issued by the District.

G. REDUCTION GOAL

Stage 6 Water Rationing achieves water use reductions of 35 35-49 percent of the California American Water and non-California American Water system production limits in each User Category as follows: Residential single-family and multi-family, Commercial/Industrial, Public Authority, Golf Course, “Other,” Non-Revenue Metered Uses, and Reclaimed Water Users.

H. NOTICE

1. California American Water shall provide written notice of mandatory water rationing to every residence and to every Non-Residential business or Water User within the California American Water system via first-class mail at least thirty (30) days before the first day of rationing Stage 6 water use restrictions are imposed.

Further, During Stage 6, California American Water shall send monthly reminders of water rationing in the water bill along with information showing the User’s Water Ration, the quantity of the Water Ration consumed, and the quantity of water available in the User’s Water Bank (when Water Banking is available). Finally, California American Water shall update survey information upon request.

2. All other Water Distribution System Operators affected by subject to Stage 6 Water Rationing restrictions shall provide written notice of mandatory water rationing to every residence and to every Non-Residential business or Water User within the Water Distribution System via first-class mail at least thirty (30) days before the first day of rationing Stage 6 water use restrictions are imposed.

Further, During Stage 6, the Water Distribution System Operator shall send monthly reminders of water rationing along with information showing the Water Ration and the quantity of the Water Ration consumed by the Water User. Finally, the Water Distribution System Operator shall provide each Responsible Party with a survey form at least once each calendar year during Stage 6. Water Distribution System Operators shall ensure that notices provided or required by the District shall be distributed to the system Water Users.

3. Upon direction of the General Manager, tThe District shall notify publish a notice to inform all Water Users of private Wells (Single-Parcel Connection Systems) within the MPWRS at least thirty (30) days before the first day of Stage 6 Water Rationing. Notice shall be via first class mail and shall explain the requirements for Stage 6 Water Rationing and shall provide and/or request additional information from the private Well Owner as deemed necessary for the efficient operation of the program.

4. California American Water Rationing Rates.

California American Water shall implement the CPUC-approved rationing rate schedule. California American Water shall file an Advice Letter with the CPUC to implement rationing rates after it has first met and conferred with the District at least five (5) days in advance of that filing. The General Manager may waive this time period for good cause.

5. California American Water and all other Water Distribution System Operators and the District shall notify Water Users of the Sunset of Stage 6 Water Rationing. Notice shall be via first class mail. The District shall publish a notice to inform all Private Well Owners that Stage 6 has sunset.

I. RATIONS BY CATEGORY

Water Rations shall be determined by User Category. Each Water User within the Monterey Peninsula Water Resource System shall be classified in one of the following groups: Residential single-family and multi-family, Commercial/Industrial, Public Authority, Golf Course, “Other,” Non-Revenue Metered Use, and Reclaimed Water Users.

J. REDUCED CALIFORNIA AMERICAN WATER ANNUAL PRODUCTION DURING STAGE 6 WATER RATIONING

The California American Water annual production limit shall be reduced by 35-49 percent during Stage 6 Water Rationing. The resulting production limit shall be further reduced by the average Unaccounted For Water Use percentage of the Water Distribution System for the 12 months preceding water rationing, and by a water rationing contingency determined by the Board. Seven (7) percent of the remainder shall be the maximum California American Water Unaccounted For Water Use ration. The remaining water shall be the California American Water annual production limit for all User Categories.

K. NON-CALIFORNIA AMERICAN WATER ANNUAL PRODUCTION LIMITS DURING STAGE 6 WATER RATIONING

Available production for other Water Distribution Systems subject to Stage 6 Water Rationing shall be determined using the same methodology as for California American Water without including a deduction for Unaccounted For Water Uses . Systems with less than ten (10) connections shall not include a deduction for Unaccounted For Water Use. The non-California American Water annual production limit for the Monterey Peninsula Water Resource System shall be used as the maximum production limit.

L. ESTABLISHING THE RATIONS

Rations for each User Category shall be determined by the General Manager by dividing the reduced available production by the percentage of use for each Water Distribution System subject to water rationing. Priority rations shall be given to Residential water needs to ensure health, safety and welfare. Residential Water Rations shall under no circumstance be less than 35 gallons per person per day. The percentage of use for each User Category shall be determined by the most recent unrationed Water Year (October 1 through September 30) data. provided by California American Water for Water Users of the Main California American Water System California American Water that derive water from the MPWRS, and by data provided by the District from its annual Well reporting program for non-California American Water Distribution Systems.

All Water Users shall be rationed by User Category as outlined in Rule 165 (Stage 5 Water Rationing).

L. By Resolution, tThe Board shall reconsider adopting restrictions on Non-Residential outdoor water use that may include any or all of the following and any other conservation method deemed feasible: Limit outdoor watering and irrigation to one day per week, or one day every other week;, or prohibit outdoor watering and irrigation with water from the affected water resource system(s); prohibit irrigation of turf and/or non-turf areas with water from the affected water resource system(s); discontinue irrigation of public landscaped areas; reduce Golf Course irrigation from the affected Water Distribution System(s) to a percentage of the amount required to water tees, greens and landing areas only; prohibit the use of water to wash any motor vehicle, motorbike, boat, trailer, airplane or other vehicle; use of water from hydrants for construction purposes or any other purposes other than fire fighting. The use of Recycled Water, when available, shall not be restricted by this requirement.

N. Elimination or mModification of Commercial/Industrial Vvariances for Best Management Practices.

The General Manager shall be authorized to require a percentage reduction of all Commercial/Industrial Water Users granted a variance for complying with BMPs for the type of use. The amount of the percentage reduction shall be determined by the General Manager following review of the success of Commercial/Industrial rationing during Stage 5 Water Rationing prior to Stage 6 Water Rationing.

O. All Water Users shall cease operation and maintenance of all ornamental water uses (fountains, ponds, etc.) that use water from the affected water supply system(s). Ornamental water uses supplied with water from other sources shall clearly display information about the source of water on or immediately adjacent to the use;.

P. PROHIBITION ON USE OF WATER FOR DUST CONTROL

The use of water from the Monterey Peninsula Water Resource System shall be prohibited for dust control purposes, except by prior approval of the General Manager. Decisions of the General Manager shall be final.

Section Eleven: Amendment to Rule 167

Rule 167 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 167 - STAGE 7 WATER RATIONING

A. Stage 7 Water Rationing is defined as the seventh stage in the District’s Expanded Water Conservation and Standby Rationing Plan that responds to a drought situation, or other threatened or existing emergency water supply shortage, or Cease and Desist Order with a 50 percent or greater reduction goal from system production limits. Reductions are achieved by water use cutbacks by User Category and by per-capita Water Rations and a moratorium on Water Permits that utilize Water Credits.

B. TRIGGER

1. Water Supply Limitation Physical Shortage Trigger

Stage 7 Water Rationing shall become effective take effect for any Water Distribution System that relies on water supply from the Carmel River or the Coastal Seaside Basin of the Monterey Peninsula Water Resource System, on June 1 or such earlier date as may be set by the Board following the District’s May Board meeting if total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS on May 1 is less than 9,610 Acre-Feet. If total usable storage is equal to or greater than 27,807 Acre-Feet on May 1, no water rationing shall be imposed.

The General Manager may delay implementation of Stage 7 to ensure adequate operation of the program. Delays authorized by the General Manager shall not exceed ninety (90) days.

2. Cease and Desist Order or Other Court Order Limiting Production

Stage 7 shall be implemented upon execution of a final Cease and Desist Order by the State Water Resources Control Board or the Seaside Basin Watermaster Board, or other final court order on the California American Water System that reduces available supplies:

e. By 50 percent or more over pre-1995 production (16,806 AFA) in any Water Distribution System that relies on supply from the California American Water Main System, or

f. By 50 percent or more in any independently operated Water Distribution System that does not rely on production or production offsets from the California American Water Main System.

The General Manager may delay implementation of Stage 7 to ensure adequate operation of the program. Delays authorized by the General Manager shall not exceed ninety (90) days.

23. Emergency Trigger

Stage 7 Water Rationing shall be implemented for any Water Distribution System, private Well, or Water User upon adoption of a Resolution of the Board of Directors. In that Resolution, the Board shall find when there is need for an immediate need to reduce system-wide production by fifty percent (50%). water use reduction requirement in response to an unexpected water supply shortage.

C. SUNSET OF STAGE 7 WATER RATIONING

Stage 7 Water Rationing shall continue to have force and effect until rescinded by Resolution of the Board of Directors. upon a determination In that Resolution, the Board shall find that the total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS is greater than 9,610 Acre-Feet. This determination will normally be made at the Board’s May meeting. However, a determination to rescind Stage 7 Water Rationing may be made as early as the following January Board meeting can be made if the total usable storage in the Carmel River System and the Coastal Seaside Basin portions of the MPWRS is equal to or greater than 27,807 Acre-Feet on January 1.

2. In the event total usable storage is greater than 27,807 Acre-Feet, the General Manager shall review California American Water’s year-to-date production. Upon compliance with the monthly year-to-date goals specified in Table XV-1 of Rule 162 and, unless otherwise specified in the Resolution rescinding Stage 7 Water Rationing, Water Users shall revert to Stage 1 Water Conservation. If California American Water’s year-to-date production exceeds the year-to-date goal specified in Rule 162 and Rule 163 Table XV-1 of Rule 162, California American Water Users shall revert to Stage 2 or Stage 3 Water Conservation.

3. Where Stage 7 has been triggered by a Cease and Desist Order or other order limiting production, Stage 7 shall continue until a Resolution of the Board of Directors is adopted that finds that the triggering order has been lifted or no longer applies to that Water Distribution System.

4. Emergency

Upon correction of a water supply limitation caused by an emergency, Stage 7 Water Rationing shall be rescinded by Resolution of the Board of Directors.

5. Restoration of Lesser Stage

The Resolution causing the sunset of Stage 5 may also trigger any lesser Stage as may be warranted for good cause by circumstances affecting a particular Water Distribution System, private Well, or Water User.

D. AFFECTED WATER USERS

Stage 7 Water Rationing shall apply to all The Board of Directors may, by variance, exempt a Water Distribution Systems, private Wells, or Water Users within the MPWRS unless specifically exempt by action of the Board of Directors or unless proof is provided to demonstrate from Stage 7 restrictions upon proof of a superior, unimpaired water right to exempt the Water Distribution System, private Well, or Water User from the Stage 7 rationing restrictions. Evidence of riparian water rights may be established by a Declaration under penalty of perjury, unless it is refuted by other proof. As necessary to ensure adequate water supplies, the Board of Directors may act within its discretion to authorize activation of Stage 7 Water Rationing within one or more Water Distribution Systems, private Wells, or Water Users in the District.

E. Requirements imposed by implementation of the Expanded Water Conservation and Standby Rationing Plan through Stage 6 Water Rationing shall remain in force. Requirements may be modified or superseded by actions taken in this stage of the Expanded Water Conservation and Standby Rationing Plan.

F. REDUCTION GOAL

Stage 7 Water Rationing achieves water use reductions of at least 50 percent of the California American Water and non-California American Water system production limits in each User Category as follows: Residential single-family and multi-family, Commercial/Industrial, Public Authority, Golf Course, “Other,” Non-Revenue Metered Uses, and Reclaimed Water Users.

G. NOTICE

1. California American Water shall provide written notice of mandatory water rationing to every residence and to every Non-Residential business or Water User within the California American Water system via first-class mail at least thirty (30) days before the first day of rationing Stage 7 water use restrictions are imposed.

Further, During Stage 7, California American Water shall send monthly reminders of water rationing in the water bill along with information showing the User’s Water Ration, the quantity of the Water Ration consumed, and the quantity of water available in the User’s Water Bank (when Water Banking is available). Finally, California American Water shall update survey information upon request.

2. All other Water Distribution System Operators affected by subject to Stage 7 Water Rationing restrictions shall provide written notice of mandatory water rationing to every residence and to every Non-Residential business or Water User within the Water Distribution System via first-class mail at least thirty (30) days before the first day of rationing Stage 7 water use restrictions are imposed.

Further, During Stage 7, the Water Distribution System Operator shall send monthly reminders of water rationing along with information showing the Water Ration and the quantity of the Water Ration consumed by the Water User. Finally, the Water Distribution System Operator shall provide each Responsible Party with a survey form at least once each calendar year during Stage 7. Water Distribution System Operators shall ensure that notices provided or required by the District shall be distributed to the system Water Users.

3. Upon direction of the General Manager, tThe District shall notify publish a notice to inform all Water Users of private Wells (Single-Parcel Connection Systems) within the MPWRS at least thirty (30) days before the first day of Stage 7 Water Rationing. Notice shall be via first class mail and shall explain the requirements for Stage 7 Water Rationing and shall provide and/or request additional information from the private Well Owner as deemed necessary for the efficient operation of the program.

4. California American Water Rationing Rates. California American Water shall implement the CPUC-approved rationing rate schedule. California American Water shall file an Advice Letter with the CPUC to implement rationing rates after it has first met and conferred with the District at least five (5) days in advance of that filing. The General Manager may waive this time period for good cause.

5. California American Water and all other Water Distribution System Operators and the District shall notify Water Users of the Sunset of Stage 7 Water Rationing. Notice shall be via first class mail. The District shall publish a notice to inform all Private Well Owners that Stage 7 has sunset.

H. RATIONS BY CATEGORY

Rations for each User Category shall be determined by the General Manager by dividing the reduced available production by the percentage of use and by taking into consideration Residential water needs to ensure health, safety and welfare. Residential Water Rations shall be given highest priority and shall under no circumstance be less than 35 gallons per person per day. The percentage of use for each User Category shall be determined by the most recent unrationed Water Year (October 1 through September 30) data provided by California American Water for Water Users of California American Water that derive water from the MPWRS, and by data provided by the District from its annual Well reporting program for non-California American Water Distribution Systems.

All Water Users shall be rationed by User Category as outlined in Rule 165 (Stage 5).

Water Rations shall be determined by User Category. Residential Water Rations shall be given highest priority and shall under no circumstance be less than 35 gallons per person per day. Each Water User within the Monterey Peninsula Water Resource System shall be classified in one of the following groups: Residential single-family and multi-family, Commercial/Industrial, Public Authority, Golf Course, “Other,” Non-Revenue Metered Use, and Reclaimed Water Users.

I. REDUCED CALIFORNIA AMERICAN WATER ANNUAL PRODUCTION DURING STAGE 7 WATER RATIONING

The California American Water annual production limit shall be reduced by at least 50 percent during Stage 7 Water Rationing. The resulting production limit shall be further reduced by the average Unaccounted For Water Use percentage of the California American Water Water Distribution System for the 12 months preceding water rationing, and by a water rationing contingency determined by the Board. Seven (7) percent of the remainder shall be the maximum California American Water Unaccounted For Water Use ration. The remaining water shall be the California American Water annual production limit for all User Categories.

J. NON-CALIFORNIA AMERICAN WATER ANNUAL PRODUCTION LIMITS DURING STAGE 7 WATER RATIONING

Available production for other Water Distribution Systems subject to Stage 7 Water Rationing shall be determined using the same methodology as for California American Water without including a deduction for Unaccounted For Water Uses. The non-California American Water annual production limit for the Monterey Peninsula Water Resource System shall be used as the maximum production limit.

K. ESTABLISHING THE RATIONS

Rations for each User Category shall be determined by the General Manager by dividing the reduced available production by the percentage of use for each Water Distribution System subject to water rationing. Priority rations shall be given to Residential water needs to ensure health, safety and welfare. Residential Water Rations shall under no circumstance be less than 35 gallons per person per day. The percentage of use for each User Category shall be determined by the most recent unrationed Water Year (October 1 through September 30) data. provided by California American Water for Water Users of the Main California American Water System California American Water that derive water from the MPWRS, and by data provided by the District from its annual Well reporting program for non-California American Water Distribution Systems.

All Water Users shall be rationed by User Category as outlined in Rule 165 (Stage 5 Water Rationing).

L. By Resolution, tThe Board shall reconsider adopting restrictions on Non-Residential outdoor water use that may include any or all of the following and any other conservation method deemed feasible: Limit outdoor watering and irrigation to one day per week, or one day every other week;, or prohibit outdoor watering and irrigation with water from the affected water resource system(s); prohibit irrigation of turf and/or non-turf areas with water from the affected water resource system(s); discontinue irrigation of public landscaped areas; reduce Golf Course irrigation from the affected Water Distribution System(s) to a percentage of the amount required to water tees, greens and landing areas only; prohibit the use of water to wash any motor vehicle, motorbike, boat, trailer, airplane or other vehicle; use of water from hydrants for construction purposes or any other purposes other than fire fighting. The use of Recycled Water, when available, shall not be restricted by this requirement.

M. ELIMINATION OR MODIFICATION OF COMMERCIAL/INDUSTRIAL VARIANCES FOR BEST MANAGEMENT PRACTICES

The General Manager shall be authorized to require a percentage reduction of all commercial/industrial Water Users granted a variance for complying with BMPs for the type of use. The amount of the percentage reduction shall be determined by the General Manager following review of the success of Commercial/Industrial rationing during Stage 6 Water Rationing prior to Stage 7 Water Rationing.

N. PROHIBITION ON THE USE OF PORTABLE WATER METERS AND HYDRANT METERS

Water Users utilizing portable water meters or hydrant meters shall be required to cease use of water from the affected water supply system(s). Each Water User shall be notified by the Water Distribution System Operator of this requirement. Portable water meters shall be returned to the water company at least 30 days before the implementation of Stage 7 Water Rationing.

Section Twelve: Amendment to Rule 168

Rule 168 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 168 - WATER BANKS

Water Banks in the California American Water Water Distribution Systems shall be suspended until (a) California American Water 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 event occurs first.

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 shall be enforced.

A. Water Banks shall be available to each Water User during Stages 5 through 7 Water Rationing. A Water Bank shall allow each Water User to accrue the unused portion of a monthly Water Ration for use in the current Rationing Year.

B. Water Banks shall be reset to zero on the first day of each Rationing Year. Ten (10) percent of the remaining Water Bank shall be credited to the following year’s Water Bank for three months to allow the establishment of a new bank.

B. The Water Bank shall be reduced on the first day of the fourth month of the Rationing Year by the amount of banked water carried over. Water Banks may shall not carry a negative balance.

Section Thirteen: Amendment to Rule 169

Rule 169 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 169 - WATER RATIONING VARIANCE

A. The General Manager shall assign additional water beyond the Water Ration established in Stage 5 Water Rationing through Stage 7 Water Rationing in the following circumstances upon submittal of the appropriate variance request form and fees.

B. The following variances shall be considered and provide cause to allow for additional water during Stages 5 through 7 Water Rationing.

1. Medical and/or sanitation needs certified by a doctor;

2. Hospital and/or health care facilities that have achieved all Best Management Practices for those uses;

3. Drinking water for large livestock;

4. Commercial/Industrial Users that can demonstrate compliance with all BMPs appropriate for the type of use and where there is minimal exterior water use on the water meter or water supply serving the use;

5. Leaks, when an invoice is provided by a licensed plumber or contractor;

6. Commercial laundromats with signs advising full loads only;

7. Business in a home on a case-by-case basis;

8. Riparian irrigation when required as a condition of a riverbank restoration Permit issued by the District or as a condition of a riverbank erosion protection Permit issued by the District.

9. Emergency, extreme, or unusual situations on a case-by-case basis;

C. NO VARIANCE

The following categories of water use shall not qualify for special consideration or provide cause for additional water under the provisions of this Regulation:

1. Visitors other than those occupying Short-Term Residential Housing as defined in Rule 11 (Definitions) when the property owner has submitted a completed survey form with the applicable information about the occupancy of the Site;

2. Irrigation, other than variances allowed by Rule 169-B-8 of this Regulation.

3. Filling spas, ponds, fountains, etc.;

4. Long-term leaks that are not repaired after reasonable notice.

D. MANDATORY CONDITIONS OF APPROVAL

1. Prior to approving any Residential variance pursuant to Rule 169-B, the Site must be in compliance with all applicable District Rules and Regulations and the following water conservation standards shall be achieved in all structures on the Site. Verification by District inspection may be conducted prior to granting a variance.

a. Toilets shall be designed to flush with a maximum of 1.28 gallons-per-flush (e.g. High Efficiency Toilet);

b. Showerheads, Rain Bars, or Body Spray Nozzles shall not emit more than 2.2 gallons per minute of water in the aggregate;

c. Faucets shall not emit more than 1.5 gallons of water per minute;

d. Drip Irrigation shall be installed for watering non-turf plantings when an Irrigation System is installed. This requirement may be waived when outdoor watering is prohibited;

2. Prior to approving any Non-Residential variance pursuant to Rule 169-B, the Site must be in compliance with all applicable District Rules and Regulations and the following water conservation standards shall be achieved in all structures on the Site. Verification by District inspection may be conducted prior to granting a variance.

a. Toilets shall be designed to flush with a maximum of 1.28 gallons-per-flush (e.g. High Efficiency Toilet);

b. Showerheads, Rain Bars, or Body Spray Nozzles shall not be installed if the fixture is designed to emit more than 2.2 gallons per minute of water in the aggregate;

c. Faucets shall not emit more than 1.5 gallons of water per minute;

d. Drip irrigation shall be installed for watering all non-turf plantings when an irrigation system is installed;

e. Automatic sensor faucets or self-closing faucets shall be installed where there are more than two washbasins in a room;

f. Site must comply with all BMPs appropriate for the type of use.

Section Fourteen: Amendment to Rule 176

Rule 170 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 170 - WATER USE SURVEY

A. STAGE 1 WATER CONSERVATION SURVEY

1. California American Water shall maintain a confidential survey of all Water Users of the California American Water system that derive their Source of Supply from the MPWRS. The survey shall request information to determine the number of Permanent Residents in each Dwelling Unit and the lot size of each Residential Site with permitted water service; the types of uses and amount of water use on Non-Residential Sites; and the number of Users and types of use(s) served by each water meter. Only information deemed appropriate for the effective operation of this program will be requested.

2. Survey forms shall be completed by the Responsible Party and returned to California American Water within 30 days of mailing. The District shall have access to this data during Stages 1 through 3 Water Conservation and shall be provided with a summary of the results of the survey by census tract annually. California American Water shall maintain survey information by census tract and shall provide access to individual water use records in compliance with District Rule 42.

B. STAGE 4 WATER RATIONING SURVEY

1. The General Manager shall conduct a survey of MPWRS Water Users not supplied by California American Water prior to the effective date of Stage 5 Water Rationing. The survey shall request information to determine the number of Permanent Residents in each Dwelling Unit and the lot size of each Residential Site with permitted water use; the types of uses and amount of water use on Non-Residential Sites; and the number of Users and types of use(s) served by each water meter or Connection. Only information deemed appropriate for the effective operation of this program will be requested.

2. The District shall mail the survey form to MPWRS Water Users not supplied water by California American Water. Survey forms shall be completed by the Responsible Party and returned to the District within 30 days of mailing. The District shall preserve the confidentiality of this survey data.

3. Failure to complete and submit a survey shall result in a minimal Water Ration. For Residential Water Users the minimal ration shall be a ration for one (1) person. For Non-Residential Water Users the minimal ration shall be two (2) units per month.

C. ADMINISTRATION OF SURVEY DATA

1. California American Water Users

California American Water shall maintain survey data for all MPWRS Water Users supplied water by California American Water and shall provide the District with access to all data in compliance with District Rule 42. California American Water shall provide the District with an annual summary of survey information, or more frequently as required by the General Manager. California American Water and MPWMD shall preserve the confidentiality of survey data.

2. Non-California American Water Users

During Stage 5 Water Rationing through Stage 7 Water Rationing, the District shall maintain survey data for all MPWRS Water Users not supplied water by California American Water.

3. A full or partial survey may be conducted as deemed necessary by the District to maintain accurate data.

4. District staff shall maintain the confidentiality of all customer survey data.

D. REPORTING

1. Responsibility of Water User

a. Each Responsible Party shall be responsible for accurately reporting the number of Permanent Residents in the Dwelling Unit(s) or other information deemed appropriate for the effective operation of the program as requested on the survey form.

b. Upon activation of a water meter, each Responsible Party shall complete a survey form.

i. California American Water Users. The completed survey form shall be submitted to California American Water by customers of that Water Ddistribution Ssystem.

ii. Non-California American Water Users. The completed survey form shall be submitted to the District or its agent by all other distribution systems Users required to complete a survey form during Stage 4 Water Rationing through Stage 7 Water Rationing.

c. All Responsible Parties shall submit revised survey forms whenever there is a change in the number of Permanent Residents in a Residential Dwelling Unit or whenever there is a change in a water User Category in Non-Residential uses. Revised survey forms should be submitted to the appropriate party as indicated in Rule 170-D-1-b.

d. Property owners of Short-Term Residential Housing rentals shall provide information about the average number of annual occupants and the average rate of occupancy to the appropriate party as indicated in Rule 170-D-1-b.

2. Intentional Misrepresentation

Any Water User intentionally over-reporting the number of Permanent Residents in a Dwelling Unit or other information pertinent to establishing a Water Ration during Stages 5, 6 and 7 Water Rationing may be charged with a misdemeanor punishable as an infraction as provided by Section 256 of the Monterey Peninsula Water Management District Law, Statutes of 1981, Chapter 986. Violations carry a maximum penalty of up to $250 for each offense. Each separate day or portion thereof during which any violation occurs or continues without a good-faith effort by the responsible Water User to correct the violation, may be deemed to constitute a separate offense, and upon conviction thereof, may be separately punishable.

Alternatively, the District may pursue any remedy set forth in Regulation XI, Enforcement, to address the intentional over-reporting of the number of Permanent Residents in a Dwelling Unit or other information pertinent to establishing a Water Ration during Stages 5, 6 and 7 Water Rationing.

3. Additional Enforcement for Misreporting

In addition to any charge for misrepresenting information as provided in Rule 170-D-2, any or all of the following may be further imposed by the General Manager or his agent where the violation occurs and continues without a good-faith effort by the responsible Water User to correct the violation. Decisions pursuant to this rule are appealable pursuant to Regulation XI.

a. Intentional misrepresentation may be considered a violation of the Water Waste provisions and shall subject the Water User to a Water Waste fine; and/or

b. Intentional misrepresentation may cause the loss of any Water Bank accrued and shall cause the Responsible Party to be ineligible to accrue a Water Bank for a period of sixty (60) months; and/or

c. Intentional misrepresentation may cause the assignment of a reduced Water Ration that may be as low as a ration for one person for a period of twelve (12) months.

Alternatively, the District may pursue any remedy set forth in Regulation XI, Enforcement, to address the intentional over-reporting of the number of Permanent Residents in a Dwelling Unit or other information pertinent to establishing a Water Ration during Stages 5, 6 and 7 Water Rationing.

4. Audit

The District may periodically audit the survey data for accuracy. Upon question, the District may request additional evidence of residency to demonstrate the number of Permanent Residents at that Site as defined in Rule 11 (Definitions).

Section Fifteen: Amendment to Rule 171

Ordinance No. 137 does not propose changes to Rule 171.

RULE 171 - WATER WASTE AND NON-ESSENTIAL WATER USE ENFORCEMENT

A. Each occurrence of Water Waste or Non-Essential Water Use, as those terms are defined by Rule No. 11 (Definitions), which continues after the Water User has had reasonable notice to cease and desist that type of water use shall constitute a Flagrant Violation.

B. Repeated occurrences of Water Waste or Non-Essential Water Use, which continue or occur after the Water User has had a reasonable notice to cease and desist that type of water use, or which continues or occurs after the Water User has had a reasonable opportunity to cure any defect causing that type of water use, shall provide cause for the placement of a Flow Restrictor with a maximum flow rate of 6 ccf/month within the water line or water meter.

C. Water Waste, Non-Essential Water Use, and Flagrant Violation fine enforcement shall be governed by Regulation XI unless otherwise indicated.

Section Sixteen: Amendment to Rule 172

Rule 172 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 172 - LANDSCAPE WATER AUDITS

A. Landscape Water Audits shall be conducted under the supervision of an individual who has been certified by the Irrigation Association to conduct audits and establish Landscape Water Budgets. Each audit shall be signed by that Person, who shall attest that the audit was performed under his/her direction.

B. Landscape Water Audits and Landscape Water Budgets shall be offered by the District and/or California American Water or their agent free of charge to all Water Users of California American Water with Dedicated Irrigation Meters, large irrigated areas over three acres, and Large Residential Water Users. Landscape Water Audits and Landscape Water Budgets shall be required for new Dedicated Irrigation Meters at the time the meter is installed.

California American Water shall review its residential customer consumption records at the completion of every Water Year to identify all Residential customers that consumed an average of 32 units per month during the past Water Year. Using this information, California American Water shall identify the customers that require a Landscape Water Audit and Landscape Water Budget and that do not have a Water Budget on file at MPWMD and CAW. Water use records shall be reviewed annually by California American Water to identify new Water Users required to establish a Landscape Water Budget by this Rule. Newly identified customers shall be notified by California American Water that they are required to obtain a Landscape Water Audit and Landscape Water Budget. California American Water shall provide the District with copies of all completed Landscape Water Audits and Landscape Water Budgets. Once notified of the requirement to obtain a Landscape Water Audit and Landscape Water Budget, a customer must arrange to complete the audit process within 60 days. Existing customers subject to this Rule shall be given annual notice by California American Water to report any changes to the landscaping or irrigation systems. Significant changes shall necessitate a follow-up audit.

1. California American Water Users shall be required to obtain Landscape Water Audits and establish Landscape Water Budgets if the property:

a. Has a Dedicated Irrigation Meter; or

b. Is an irrigated area of greater than three acres; or

c. Is a Large Residential Water User.

2. All Landscape Water Budgets must be prepared by an individual certified by the Irrigation Association.

3. All Water Users required to complete a Landscape Water Audit and establish a Landscape Water Budget shall have the option of obtaining a Landscape Water Audit and Landscape Water Budget from a Landscape Irrigation Auditor of their choice at their own expense if the auditor is certified by the Irrigation Association.

4. Landscape Water Audits not conducted by the District and/or California American Water shall be reported on a Landscape Water Budget Application. Landscape Water Budget Applications shall be submitted to California American Water. California American Water shall forward a copy of all completed Landscape Water Audits and Budgets to the District within ten (10) days of receipt by California American Water. Landscape Water Audits not performed by the District or California American Water are subject to review and acceptance by the District. Landscape Water Audits and Landscape Water Budgets rejected by the District may be appealed to the Board of Directors pursuant to Rule 70 (Appeals).

5. Audit

a. An On-Site Landscape Irrigation Audit shall be completed or overseen by a Certified Landscape Irrigation Auditor (CLIA) and shall include evaluation and documentation of the following:

(1) Visual and physical evaluation of Irrigation System.

(2) Description of the type(s) of Irrigation System contained on the property.

(3) Location of problems with Irrigation System which may be contributing to excessive water use.

(4) Condition and performance of the following:

Points of connection

Backflow devices(s)

Valves

Piping (to include mains and laterals)

Control system

Sprinklers/emitters

System coverage

(5) Landscaped areas irrigated by each valve/zone/running station.

(6) Plant materials, plant hydrozone compatibility, soil type, Irrigation System operating pressure, irrigation water requirements, and efficiency for each zone.

(7) Site map, photographs and or a detailed zone description summary including: Zone location, zone efficiency, sprinkler type and zone comments.

b. Upon completion of an On-Site audit, the Irrigation System data shall be analyzed and compiled into a usable, written report that shall include at least the following:

(1) Calculation and determination of Site Landscape Water Budget using the Irrigation Association Water Requirement (WR) calculation, as follows:

WR = ETo x KL x A

DU x Ewm x Cu

Where:

WR = Water Requirement^[1]

ETo = Reference Evapotranspiration (inches per year)^[2]

KL = Landscape Coefficient

A = Area (square feet)

Cu = Conversion Factor (convert to CCF = 1,200)

Ewm = Management Efficiency^[3]

DU = Distribution Uniformity

(2) The budget shall include calculations for each of the following hydrozones assuming they are present in the landscape.

• Cool season turf (.8)

• Warm season turf (.6)

• All other vegetation (.5)

(3) Monthly irrigation schedule.

(4) Condition and functionality of existing Irrigation System.

(5) Recommendations for improvements to Landscape material and Irrigation System (to include “Smart” irrigation technology and information about Rebates available).

(6) Estimate of water and money savings potential, including cost estimates for recommended improvements.

(7) Site map and or a detailed zone description summary which identifies relevant Irrigation System details, including valves/zones, and sprinkler/emitter types for each zone.

The following minimum criteria will be used to establish the hydrozone distribution uniformity:

Type of Zone	Minimum Distribution Uniformity (DU)
Fixed Spray	50%
Rotor	60%
Stream Rotor	60%
Impact	60%
Micro Spray	80%
Drip - Standard	80%
Drip - Pressure Compensating	80%
Bubbler - Standard	80%
Bubbler - Pressure Compensating	80%

The following Landscape Coefficients (species factors) shall be used:

Type of Vegetation	Coefficient
Cool Season Turf	0.80
Warm Season Turf	0.60
All Other Landscape Vegetation	0.50

6. California American Water shall provide monthly status notices to each Water User required to follow a mandatory Landscape Water Budget during Stage 2 through Stage 4.

C. MODIFICATIONS TO AUDITED LANDSCAPES

Following significant modification to an existing audited landscape, a new Landscape Water Audit shall be conducted to establish an appropriate Landscape Water Budget. It shall be the responsibility of the property owner to ensure that a Landscape Water Audit is conducted within 60 days of any such change and to submit a new Landscape Water Budget Application to California American Water.

D. REPORTING AND ANALYSIS

California American Water shall preserve water use records and budgets for all Water Users subject to this Rule. Updated Landscape Water Budgets shall supersede previous data. Monthly during Stages 2 and above, California American Water shall notify the District of Users who have exceeded their Landscape Water Budget. Quarterly, a report shall be compiled by California American Water and provided to the District showing the account information and comparing the Landscape Water Budget with actual consumption.

E. LANDSCAPE IRRIGATION RESTRICTIONS IN THE CALIFORNIA AMERICAN WATER SYSTEM THAT DERIVES ITS SOURCE OF SUPPLY FROM THE MPWRS

Unless watering is by drip irrigation, through a hand-held hose with a Positive Action Shut-Off Nozzle, or performed by a professional gardener or landscaper, the following schedule shall apply:

1. Odd Numbered Properties shall water after 5 p.m. or before 9 a.m. on Saturdays and Wednesdays only. This schedule shall also apply to properties located on the South or West side of the street in cities where no street address is available.

2. Even Numbered Properties shall water after 5 p.m. or before 9 a.m. on Sundays and Thursdays only. This schedule shall also apply to properties located on the North or East side of the street in cities where no street address is available.

Section Seventeen: Rule 173

Ordinance No. 137 does not propose changes to Rule 173.

RULE 173 - REGULATION OF MOBILE WATER DISTRIBUTION SYSTEMS

A. No Person, Extractor, Owner or Operator shall operate a Mobile Water Distribution System without first securing a written Permit from the District. In accordance with Monterey County Code (e.g., Title 15.20), no applications will be accepted or permitted for bulk hauled water for permanent Potable use. Applications for establishment of a Mobile Water Distribution System shall be made pursuant to Rule 22 (Action On Application For Permit To Create/Establish A Water Distribution System) and shall be investigated, considered, determined, and acted upon on the same terms and conditions as provided for the approval, conditional approval or denial of a creation establishment Permit as stated in that rule. The application shall identify each Source of Supply and the location of each use. For any Sub-potable Mobile Water Distribution System within the California American Water Service Area, a condition of approval shall require that California American Water be notified so that a back-flow protection device can be installed pursuant to Monterey County Code.

B. In the event prior authorization is not obtained by reason of an emergency or health related situation, authorization for the Mobile Water Distribution System Permit shall be sought from the District by submittal of a complete application compliant with Rule 21, within five working days following commencement of the emergency or health related event.

C. Delivery and/or receipt of water from an unpermitted Mobile Water Distribution System shall be deemed Water Waste, and shall be subject to fine, restriction, and cease and desist order as set forth in Rule 171 and Regulation XI.

Section Eighteen: Rule 174

Ordinance No. 137 does not propose changes to Rule 174.

RULE 174 - REGULATION OF WELL OWNERS OR OPERATORS AND EXTRACTORS

During a Water Supply Emergency, each Owner or Operator or Extractor of a private water Well, Water Distribution System, or other Water-Gathering Facility shall comply with the provisions of this Regulation, as they relate to such Well, Water Distribution System or other Water-Gathering Facility unless specifically exempt by action of the Board of Directors.

Section Nineteen: Amendment to Rule 175

Rule 175 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

RULE 175 - WATER RATIONING ENFORCEMENT

A. ENFORCEMENT DURING STAGES 5 THROUGH 7 WATER RATIONING

For this Rule, the administrative fines for Stages 5 through 7 water rationing set forth in the tables below and referenced in this Rule shall control and be amended from time to time by Resolution duly adopted by the MPWMD Board of Directors.

Violation levels shall be based upon violation history for the preceding 12 months and the rationing condition stage.

STAGE 5

Meter Size	1st Offense	2nd Offense	3rd Offense	4th Offense
1” and Less	Courtesy Notice	$20	$40	$40
>1” to 2”	Courtesy Notice	$40	$80	$80
>2”	Courtesy Notice	$80	$160	$160

STAGE 6

Meter Size	1st Offense	2nd Offense	3rd Offense	4th Offense
1” and Less	Courtesy Notice	$25	$50	$50
>1” to 2”	Courtesy Notice	$50	$100	$100
>2”	Courtesy Notice	$100	$200	$200

STAGE 7

Meter Size	1st Offense	2nd Offense	3rd Offense	4th Offense
1” and Less	Courtesy Notice	$50	$100	$100
>1” to 2”	Courtesy Notice	$100	$200	$200
>2”	Courtesy Notice	$200	$400	$400

1. Courtesy Notice

For the first instance of excess water use beyond the Water Ration in Stages 5 through 7 Water Rationing, a Water User shall be given written notice by the water system Operator of the excess use and shall be notified that such violation constitutes Water Waste and a Water Waste fine shall be collected in the event the Water User again exceeds that User’s Water Ration during any future billing cycle under Stages 5 through 7 Water Rationing. If the Water User complies with all water rationing and Water Waste and Non-Essential Water Use requirements during the next month following the first instance of excess use, the excess use fine shall be deferred.

If the Water User again exceeds that User’s Water Ration during any following month, the Water Waste fine shall be imposed.

2. Second Offense

Upon the second occurrence of excess water use (including any prior excess water use during any prior stage) within a 12-month period, a Water User shall be charged with Water Waste and assessed a fine, plus the previously deferred fine by the District or its agent. For example, if a 1” or smaller meter had a second offense within a 12-month period during Stage 5, a fine of $20 plus the previously deferred fine of the same amount would be assessed. If the second offense occurred in Stage 6 and the first offense in Stage 5, the 2nd offense fine would be $25 and the previously deferred fine would be $20.

3. Third Offense

A third occurrence of excess water use (including any prior excess water use during any prior stage) within a 12-month period shall result in fines listed for a third offense. A third occurrence of excess water use shall provide cause for the installation of a Flow Restrictor in the water meter or water supply providing water to the property where the over-use occurred. Restrictors shall remain in place until conditions are reduced to Stage 2 Water Conservation or a less restrictive stage. All costs for the installation and removal of a Flow Restrictor shall be charged to the property owner customer of the Site subjected to this action.

4. Fourth Offense

A fourth occurrence of water use in excess of the Water Ration shall result in fines listed for a third offense and shall result in the installation of a Flow Restrictor with a maximum flow rate of 6 ccf/month by the system Operator in the water meter or water supply providing water to the property where the over-use occurred. Restrictors shall remain in place until conditions are reduced to Stage 3 Water Conservation or to a less restrictive stage. All costs for the installation and removal of a Flow Restrictor shall be charged to the customer property owner of the Site subjected to this action.

B. FLOW RESTRICTOR EXEMPTION

Exemptions to the installation of a Flow Restrictor as a means to enforce the Water Ration shall occur when there are provable risks to the health, safety and/or welfare of the Water User. An exemption shall be made for water meters serving three or more Multi-Family Dwelling units by substituting an excess water use charge equivalent to the appropriate meter size, rationing stage, and 4th offense amount times the number of Dwelling Units located on the meter during each month in which a violation of the Water Ration occurs. The Responsible Party shall be liable for payment of all excess water use charges.

C. All notices and assessments of Water Waste and/or excess water use charges made by a Water Distribution System Operator shall be reported to the District.

Section Twenty: Amendment of Rule 23-B-2

Rule 23-B-2 shall be amended to reflect the relocation of metering provisions adopted in Ordinance No. 134 (August 18, 2008) as Rule 161-F and 161-G. Rule 23-B-2 shall be amended as shown below, with added language as shown in bold italic type face, and deleted language shown in strikeout type face.

3. Construction of a New Structure Meter Requirements.

In addition to the “Mandatory Conditions of Approval for Construction Affecting the Interior or Exterior of an Existing Structure”, a

a. All new water use permitted by the District shall install a separate water meter to each User.

b. All Non-Residential New Structures receiving a Water Permit after October 1, 2008 that include irrigated areas beyond ten (10) feet of any building shall utilize a separate water meter to measure all exterior water uses.

c. All New Structures receiving a Water Permit after October 1, 2008 shall have separate water meters for fire suppression systems.

Section Twenty-One: Publication and Application

The provisions of this ordinance shall cause the republication and amendment of the permanent Rules and Regulations of the Monterey Peninsula Water Management District.

Section Twenty-Two: Effective Date and Sunset

This ordinance shall take effect at 12:01 a.m. on the 30th day after it has been enacted on second reading.

This Ordinance shall not have a sunset date.

Section Twenty-Three: Severability

If any subdivision, paragraph, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or enforcement of the remaining portions of this ordinance, or of any other provisions of the Monterey Peninsula Water Management District Rules and Regulations. It is the District's express intent that each remaining portion would have been adopted irrespective of the fact that one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared invalid or unenforceable.

On motion by Director __________, and second by Director ____________, the foregoing ordinance is adopted upon this ______ day of ________________, 2008, by the following vote:

AYES:

NAYS:

ABSENT:

I, ____________________, Secretary to the Board of Directors of the Monterey Peninsula Water Management District, hereby certify the foregoing is a full, true and correct copy of an ordinance duly adopted on the ________ day of _____________ 2008.

Witness my hand and seal of the Board of Directors this ________ day of ____________ 2008.

Darby Fuerst, Secretary to the Board

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^[1] Water Requirement calculations, for the purpose of establishing the Landscape Water Budget, shall not include a variable for Effective Rainfall. Property owners/irrigators will need to adjust their actual watering schedules based on actual rainfall, as this will help them stay within their Landscape Water Budgets. One of the top recommendations given to all audited properties must be the installation of a Rain Shut-Off Switch.

^[2] Historic ETo data for specific properties shall be provided to consultant(s), by MPWMD, as requested.

^[3] Due to the unique and critical water supply situation in the Monterey Peninsula Water Resource System, a higher standard of Management Efficiency (Ewm) will be required, especially for properties identified as needing Landscape Water Audits and Budgets. Therefore, Ewm shall not be less than 0.90 for the purpose of establishing a Landscape Water Budget.