EXHIBIT 2-A

Preliminary Draft

ORDINANCE NO. XXX

AN ORDINANCE OF

THE MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

AMENDING THE REBATE PROGRAM TO

DISALLOW THE REUSE OF WATER SAVINGS

RESULTING FROM THE REBATE PROGRAM

FINDINGS

To Be Developed

NOW THEREFORE be it ordained as follows:

ORDINANCE

Section One: Short Title

This ordinance shall be known as the Rebate Repayment Ordinance of the Monterey Peninsula Water Management District.

Section Two: Statement of Purpose

The Monterey Peninsula Water Management District enacts this ordinance in response to concerns expressed by the California Public Utilities Commission Division of Ratepayer Advocates regarding the use of ratepayer funding for the Rebate program when the water savings could be used to add new water fixtures or to expand existing uses. This ordinance recognizes that replacement or installation of ultra-low consumption water fixtures may be done without the intent to utilize a Water Credit. Therefore, this ordinance requires that if a Water User chooses to utilize a Water Credit that originates from water fixtures that received a Rebate, the Water User must return the previous Rebate to the District, thus enabling Rebate funds to contribute only to long-term water savings. This ordinance also disqualifies from a Rebate any person that utilized a Water Credit for the Qualifying Device on a Water Permit prior to the request for a Rebate.

The Rebate Program is designed to provide an incentive to encourage water saving retrofits. Participation in the Rebate Program is voluntary.

Section Three: Amendment of Rule 141-C, Rebate Eligibility

District Rule 141-C shall be revised as shown in bold italics (bold italics) and strikeout (strikeout).

C. REBATE ELIGIBILITY

1. Rebates shall be issued only for installation of Qualifying Devices on Sites located within the District that are served by Water Distribution Systems regulated by the District.

2. No Rebate shall be issued for installation of Qualifying Devices that are required to be installed and maintained by Regulation XIV of the District or that have applied a Water Use Credit or On-Site Water Credit (Rule 25.5) for the Qualifying Device(s) to a Water Permit. This includes but is not limited to:

a. Properties subject to Rule 142 (Plumbing Fixtures for New Construction), Rule 143 (Retrofit of Existing Commercial Uses) and Rule 144 (Retrofit Upon Change of Ownership or Use) at the time the Rebate application is processed.

b. Properties required to install Ultra-Low Flush Toilets as a condition of a water rationing variance (Rule 92).

3. No Rebate shall be issued for Ultra-Low Flush Toilets when the District’s records indicate that a Water Permit was issued between 1985 and 1987 and a Connection Charge reduction occurred as a result of the Applicant’s agreement to install Ultra-Low Flush Toilets.

4. Rebates shall be available only for the initial installation of Qualifying Devices.

5. Rebates shall be available for a maximum of twenty (20) toilets on a Non-Residential Site.

6. Rebates shall not be issued for more than 3,000 gallons of Cistern storage capacity on a Site.

Section Four: Amendment of Rule 25.5-G

District Rule 25.5-G shall be revised as shown in bold italics (bold italics) and strikeout (strikeout).

G. A valid Water Use Credit may provide the basis for the General Manager to issue a Water Permit for new, modified, or Intensified Water Use on that Site.

1. There shall be no Connection Charge assessed for any Water Use Credit. Connection Charges, however, shall apply to the Capacity for water use which exceeds the Water Use Credit, or for any Expansion of Use following the expiration of the Water Use Credit.

2. Use of a documented Water Use Credit to offset an Expansion of Use shall cause recordation of a Notice and Deed Restriction Regarding Limitation on Use of Water on a Property.

3. No Connection Charge refund shall accrue by reason of a water use reduction or abandonment of Capacity, whether or not reflected by a Water Use Credit.

4. Issuance of a Water Use Credit shall not result in any change to a Jurisdiction’s Allocation or to any Water Entitlement. Use of any Water Use Credit shall similarly not result in a change to a Jurisdiction’s Allocation or any Water Entitlement.

5. Where a Rebate has been previously issued for a Qualifying Device that is utilized as a Water Use Credit, the Applicant shall repay the amount of the Rebate prior to receiving a Water Permit.

Section Five: Publication and Application

The provisions of this ordinance shall cause the amendment and republication of Rule 11 and the addition of Rule 141 to the permanent Rules and Regulations of the Monterey Peninsula Water Management District. This ordinance shall replace all previous District ordinances that pertain to the District’s Rebate Program.

Section Six: Effective Date

This ordinance shall be given effect at 12:01 a.m. on July 1, 2009.

Section Seven: Sunset

This ordinance shall not have a sunset date.

Section Nine: Severability

If any subdivision, 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 or unenforceability 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 of Director _________, and second by Director ________, the foregoing ordinance is adopted upon this _______ day of _____________, 2009, by the following vote:

AYES:

NAYS:

ABSENT:

I, Darby W. Fuerst, 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 ____________, 2009.

Witness my hand and seal of the Board of Directors this ____ day of _________, 2009.

________________________________

Darby W. Fuerst, Secretary to the Board

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