MPWMD BOARD MEETING--DEC 14, 2009--ITEM 21--CONSIDER FIRST READING OF ORDINANCE NO. 142 – 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, TO ALLOW AN EXCEPTION TO THE MANDATORY REQUIREMENT FOR IMPLEMENTION OF STAGE 5, 6, OR 7 WHEN A FINAL CEASE AND DESIST ORDER IS ISSUED

ITEM:		PUBLIC HEARINGS

21.	CONSIDER FIRST READING OF ORDINANCE NO. 142 – 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, TO ALLOW AN EXCEPTION TO THE MANDATORY REQUIREMENT FOR IMPLEMENTION OF STAGE 5, 6, OR 7 WHEN A FINAL CEASE AND DESIST ORDER IS ISSUED

Meeting Date:			December 14, 2009	Budgeted:	N/A

From:			Darby Fuerst,	Program/	N/A
			General Manager	Line Item No.:

Prepared By:			Stephanie Pintar	Cost Estimate:	N/A

General Counsel Review: Yes
Committee Recommendation: By a vote of 3-0 on December 7, 2009, the Water Demand Committee recommended the Board adopt the ordinance through the regular process. The District’s Technical Advisory Committee (TAC) and the Policy Advisory Committee (PAC) reviewed and supported the ordinance on November 30, 2009 as a non-urgency ordinance.
CEQA Compliance: The ordinance is exempt under CEQA Section 15269, Emergency Projects

SUMMARY: On November 16, 2009, the MPWMD Board directed staff to present an ordinance to the Board at its December meeting to modify the automatic triggers required by the existing Expanded Water Conservation and Standby Rationing Plan (Regulation XV) (Exhibit 21-A). The modifications to Rules 165 (Stage 5 Water Rationing), 166 (Stage 6 Water Rationing) and 167 (Stage 7 Water Rationing) provide an alternative to rationing when there is evidence that increased conservation, or implementation of a lesser rationing Stage, would be sufficient to achieve regulatory compliance. Stage 5 is the first water rationing stage and automatically takes effect when a final Cease and Desist Order (CDO) is issued that requires reductions of more than 15 percent but less than 35 percent of base year use. The CDO issued against California American Water (Cal-Am) by the State Water Resources Control Board (SWRCB) in October 2009 triggers Stage 5 if the court Stay of the SWRCB Order is lifted.

Automatic regulatory triggers currently also exist in Stages 6 and 7; each automatic trigger requires the District to implement that Stage of water rationing when there is a final CDO that mandates water supply targets associated with that Stage. The proposed ordinance provides a mechanism for the General Manager to implement a lower conservation or rationing stage when credible evidence shows that the community is likely to achieve compliance with regulatory production limits. At this time, evidence supports a position that production during this Water Year shall comply with the CDO during without the need to implement Stage 5 water rationing. This potential is supported by the last year’s production, imposition of new rates that will discourage high use, and a plan to focus on high outdoor water users, rather than all Cal-Am customers. The proposed ordinance allows the General Manager to declare a rationing Stage by memorandum, but the decision can be appealed to the Board.

Draft Ordinance No. 142 has been reviewed by the PAC/TAC and the Water Demand Committee. All three committees unanimously supported the ordinance and recommended that it be considered without urgency. California American Water (CAW) and the Division of Ratepayer Advocates of the Public Utilities Commission also support the ordinance. CAW will modify its Rule 14.1.1 to match the District’s action.

RECOMMENDATION: Staff recommends the Board approve first reading of Ordinance No. 142. Second reading will be scheduled for the January 28, 2010 Board meeting. This ordinance is exempt from CEQA.

IMPACT ON STAFF/RESOURCES: IMPACT ON STAFF/RESOURCES: The cost and impact of rationing on the community is high. Beyond the cost of labor and overhead to run a rationing program, rationing triggers unavoidable economic costs, particularly to local businesses who may not qualify for rationing variances and to Jurisdictions who have planned use of their remaining water allocations. To avoid water rationing (and the corresponding moratorium) at the outset, staff is proposing interim measures that will reduce demand and ideally maintain water demand below regulatory limits.

EXHIBITS

21-A Draft Ordinance No. 142

U:\staff\word\boardpacket\2009\20091214\PubHrg\21\item21.doc

PUBLIC HEARINGS

December 14, 2009

Budgeted:

N/A

General Counsel Review: Yes