ITEM:		PUBLIC HEARINGS
14.	CONSIDER FIRST READING OF ORDINANCE NO. 146, AN ORDINANCE SUSPENDING THE EXPIRATION DATE FOR WATER CREDITS FOR THE DURATION OF ANY MORATORIUM LIMITING THEIR USE
Meeting Date:			November 15, 2010	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: The Water Demand Committee recommended an ordinance be developed to suspend credit expiration during a CPUC approved moratorium (September 30, 2010). The Policy Advisory Committee (PAC) and Technical Advisory Committee (TAC) supported the concept ordinance (October 25, 2010).
CEQA Compliance: Categorical Exemption Section 15301, Existing Facilities

SUMMARY: Water Use Credits are documented when (1) there is a Permanent Abandonment of Use, or (2) following the installation of Ultra-Low Water Use Technology not required by the District, or (3) when there is a temporary removal of a use, such as a Change of Use. The credit process allows the reuse of the reduced increment of water on the same Site. Credits may be transferred to other Sites pursuant to Rule 28. Water Use Credits resulting from a Permanent Abandonment of Use (i.e., demolition or permanent removal of plumbing or fixtures, or replacement of fixtures with state-of-the-art equipment or high efficiency appliance credits) allow the reuse of the reduced increment of water on a Site for up to ten years.

On May 24, 2010, California American Water Cal-Am filed an Application for an Order Authorizing and Imposing a Moratorium on Certain New or Expanded Water Service Connections in its Monterey District (A1005020) with the California Public Utilities Commission (CPUC). In August 2010, staff met with representatives of the parties involved in Cal-Am’s request for a moratorium to comply with the State Water Resources Control Board (SWRCB) Cease and Desist Order 2009-0060 (CDO). The California Public Utilities Commission (CPUC) is presently considering Cal-Am’s moratorium request and a decision is anticipated in early 2011. Information obtained in August 2010indicates there is considerable uncertainty about what projects would be impacted by a moratorium.

On October 18, 2010, District staff recommended the Board consider the potential effects of a CPUC-ordered moratorium on properties that have a Water Use Credit or an On-Site Water Credit. Draft Ordinance No. 146 (Exhibit 14-A) responds to the Board’s direction to prepare an ordinance that amends the District’s Rules to suspend a credit’s expiration date if the credit is subject to a CPUC-ordered moratorium. Presently, the District’s Expanded Water Conservation and Standby Rationing Plan suspends credit expirations in Stages 6 and 7 (Water Rationing), but the plan does not consider a moratorium by the CPUC that impacts credits in earlier stages.

The proposed ordinance also makes several minor revisions to Rule 11 (Definitions), Rule 20-C-6 (Exemptions For Water Distribution System Permit) and Rule 143-A (Water Efficiency Standards for Existing Non-Residential Uses). Amendments include:

· Amendments to the definitions for Mixed Use and Water-Gathering Facility.

· Clarification to Rule 25.5-C to specify that the review of the status of a Water Use Credit prior to extension may include additional criteria than those listed (i.e., ‘no Water Permit or other use or transfer of the Water Use Credit has occurred”). This is done by replacing the abbreviation for id est (i.e. or “that is”) with exempli gratia (e.g. or “for example”) to allow newly adopted requirements to be considered at the time that an extension is requested.

· Revision of Rule 20-C-4 to facilitate installation of rainwater harvesting Cisterns.

· Amendment to Rule 143-A by deleting a reference to possibly more restrictive requirements by another agency or Jurisdiction to allow the addition of more restrictive requirements by MPWMD to apply.

DISCUSSION: The moratorium requested by Cal-Am may impact properties with Water Use Credits and Water Credits. Staff attempted to assess the extent of this possible impact, and was able to identify approximately 8.44 acre-feet per year (AFY) of Water Use Credits and Water Credits, including credit available to Quail Lodge (1.07 AFY), Presidio of Monterey (1.34 AFY) and Naval Postgraduate School (2.68 AFY). A full quantification of potential Water Credits available is not possible without an intensive effort that would involve reviewing every property file in the District’s database for current unused credits. However, an amendment to Rule 25.5-C proposed in Ordinance No. 146 will allow the District to consider current and future amendments that add efficiency requirements that may affect a credit prior to renewal.

The Water Demand Committee discussed this item on September 30, 2010, and recommended that the Board direct staff to prepare an ordinance to suspend the expiration dates of Water Credits that are impacted by a CPUC-approved moratorium. The District’s PAC and TAC recommended approval of a concept ordinance. The ordinance is specific only to Water Credits that are impacted by a CPUC-approved moratorium.

RECOMMENDATION: After receiving public comment, the Board should consider approval of first reading of Ordinance No. 146. The ordinance, if approved on second reading in December 2010, would be effective on January 14, 2011.

IMPACT ON STAFF/RESOURCES: N/A

EXHIBITS

14-A Draft Ordinance No. 146

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