EXHIBIT 3-B

MPWMD Analysis of Hospitality Bounce-Back

Economic recovery concerns the resurgence of the hospitality and tourism industry as it relates to existing capacity in hotels, restaurants, and other visitor-serving facilities. The hospitality industry is a $2 billion per year business, providing 22,000 jobs in Monterey County, most on the Peninsula. Occupancy levels for the 1998-2001 period, based on four full service properties in Monterey and one full service property in downtown Carmel, indicated a weighted average occupancy rate of 74.83%. The key months of June through October consistently achieved occupancies from 78% to a high of over 90% during those “best years” for the Peninsula. For the year 2011, occupancy was below 68%. If the economy should once again fuel an increase in occupancy rates, then non-residential water use would increase. The “commercial” sector accounts for 27% of Cal-Am consumption. Hence, project sizing must be able to accommodate an increase in water use based on the in situ number of rooms and seats, but under an improving economic climate. This must be distinguished from water for legal lots of record or general plan build-out.

Water Year	Commercial Water Use (AF)
2011	2,750
2010	2,762
2009	2,789
Average	2,767
2008	2,980
2007	3,028
2006	3,002
Average	3,003
FY 2000	3,207

Excludes Hidden Hills, Bishop, Ryan Ranch.

Summary of Results:

2006-08 Average compared to last 3 year average: +236 AF

2000 compared to last 3 year average: +440 AF

Last 3 year average plus 7%: +194 AF

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