TECHNICAL ADVISORY COMMITTEE
ITEM:		DISCUSSION ITEM
2.	Discuss Conceptual Ordinance No. 124 – Clarifying Rules Related to Water Permits and Credits
Meeting Date:			February 7, 2006
From:			David A. Berger,
			General Manager
Prepared by:			Stephanie Pintar

SUMMARY: Attached as Exhibit 2-A is a preliminary draft ordinance to amend, revise, and update District Rules and Regulations related to water permits and water credits. These changes are supported by the District Board’s Water Demand Committee, and were developed by the Water Demand Division staff to facilitate completion of a Policies and Procedures Manual. Before the manual can be completed, a number of policy interpretations, procedures, and practices must be incorporated into the rules and regulations to allow consistency in application. In addition, stand-alone policies adopted by the Board have been added to the Rules and Regulations. Currently, there are two staff members who have institutional knowledge of these policy interpretations, procedures, and practices. Staff’s institutional knowledge will be captured in the revised rules. Clarification and inclusion of these Board policies, policy interpretations, procedures, and practices in the rules will also facilitate the accuracy of the Water Demand Division database project.

The goal of the draft ordinance is to bring all permit and credit related rules current with adopted policies and administrative practices. This is accomplished by adding new language and deleting old language to clarify the rules and by creating language to support staff’s interpretation of the process. This also serves to fill in the gaps where practices are not supported by language in the existing rules, but where administrative memorandums, Board-approved policies not incorporated in the rules, past practice and other directives have supported staff’s actions and policy interpretations. The following rules have been modified by this ordinance:

· Rule 11, Definitions

· Rule 20, Permits Required

· Rule 21, Applications

· Rule 23, Action on Application for Permit to Expand or Extend a Water Distribution System

· Rule 24, Water Permit Process

· Rule 24.5, Connections for Affordable Housing

· Rule 25, Cancellation of Permits

· Rule 25.5, Water Use Credits

· Rule 26, Rehearing

· Rule 28, Transfer

· Rule 30, Determination of Water Allocations

In reviewing proposed language contained in the draft ordinance, the Water Demand Committee focused on reorganizing and rewriting the rules to make them more “user friendly.” With this in mind, Rule 20 was revamped to address under what circumstances a water permit is required. Rule 21 now deals exclusively with the application, and Rule 23 outlines the process for reviewing an application and issuing a water permit. Rule 24 explains how water use capacity is calculated and how to determine the appropriate connection charges. Rule 24.5 has been considerably simplified to address connection charge reductions for affordable housing. Rule 25 has been clarified to state a definitive water permit expiration date. Rule 25.5 has been revised to simplify the Water Use Credit process by eliminating two application timelines and now includes the existing administrative process for documenting the credit. This rule also speaks to other administrative practices and policies related to water credits. Finally, Rule 30 has been modified to delete obsolete language regarding water credits.

DISCUSSION:

1. In addition to the revisions summarized above, the following key administrative practices and policies have been added to the rules:

· Definitions have been added for terms used during the permit and credit process. (Rule 11)

· Mandatory Conditions of Approval for water permits have been added, including the requirement for a final inspection by the District and a reasonable response time to correct any violations. (Rule 23)

· A notification process has been added for incomplete permit applications and for violation notices. (Rule 23)

· Indemnification of the District is added as a standard condition for approval. (Rule 23 and Rule 28)

· The conditions for Sleepy Hollow subdivision have been added to the Rules. These conditions have been mandatory since 1986 when an emergency connection to the Cal-Am system was authorized by the Board, but the conditions have not been listed in the Rules. (Rule 23)

· Rule titles have been changed to more accurately reflect the actions directed by the rule. (Rules 20-B, 21-B, 23, 23-C, 24, 25, 25.5, 28)

· Redundancy between permit rules has been eliminated.

· CEQA review must be conducted by the jurisdiction prior to District action on a water permit application. (Rule 23)

· The process for determining water use capacity for residential and nonresidential uses has been listed out. (Rule 24)

· The calculation of exterior water use has been clarified, including the addition of the Maximum Applied Water Allowance (MAWA) calculation. (Rule 24-A and 24-B)

· Table 2: Non-residential Water Use Factors may be modified by Resolution of the Board. (Rule 24-B)

· A table has been added to reflect the annual change in the connection charge. (Rule 24-C)

· The rule relating to special circumstances has been clarified and split into subparagraphs that address various applications of the rule. (Rule 24-D)

· Standard Conditions of Approval for Special Circumstances with Substantial Uncertainty have been added. (Rule 24-D)

· A significant portion of the Connection Charge Refunds section was deleted, as the existing text is outdated. (Rule 24-F)

· Connection charge fund accounting language was edited to reduce redundancy. (Rule 24-G)

· The Connection Charge Hearing section was deleted, since the issues addressed there have been included in the section on special circumstances. (Rule 24-D)

· References to the District Reserve Allocation (which was repealed upon adoption of Ordinance No. 73 in February 1995) have been deleted.

· The “process” of calculating and issuing a Water Use Credit has been broken down into specific steps. Those steps are then simplified, following the existing practices. (Rule 25.5)

· Specific conditions have been added to water permits that propose to use a Water Use Credit, including a new condition that the former use must have been lawful in terms of having had a water permit, having not required a water permit, or having been grandfathered under the current rules (e.g. having existed as of March 1, 1985). (Rule 25.5)

· Specific examples of evidence that can be submitted to determine the preexistence of landscaping on a vacant lot are cited. (Rule 25.5)

· A new table, Table 4: Ultra-Low Consumption Appliance Credits, has been added. This new table lists the various appliances and their corresponding credits that have been approved by the Board. (Rule 25.5)

· Information to obtain a Water Use Credit for permanent disconnection from a water distribution system is added. (Rule 25.5)

· Abandoned water use capacity must have resulted either from removal of a lawful water use (i.e. a use that received a water permit or can be proven to have existed both prior to and after March 1, 1985). (Rule 25.5)

· The existing reference to the “15 percent conservation based on the criteria used for the Water Allocation EIR” has been removed, as the meaning of this is ambiguous. The Water Allocation Program EIR does not have clear criteria for calculating the reduction referenced in this rule. (Rule 25.5)

· Rule 26 has been revised to allow the General Manager to determine the appropriateness of a rehearing. (Rule 26)

· The 15 percent conservation requirement from Rule 25.5 has been added to Rule 28- Transfer, in keeping with current practice. (Rule 28)

· Text from Rule 24-B-2, Governmental Open Space, has been relocated to the water credit transfer rule. (Rule 28)

· The condition requiring disclosure of the amount paid for a water credit transfer is added to the transfer rule. (Rule 28)

2. The following policy changes were raised by staff and proposed by the Water Demand Committee. The Board will consider these proposed policy changes during the ordinance review process.

· A new commercial category (Modified Commercial Uses) has been added to Table 2: Nonresidential Water Factors, for properties that have been granted a “credit” for installing ultra-low consumption technology. It is conceivable that credits established by retrofitting would be used to increase the square-footage, seating, or other factors that normally would result in intensification in use. It is also conceivable that the water credit would be transferred to another non-residential use. Either of these scenarios would result in a change in the capacity of the building to accommodate a change in use within the existing grouped uses. (Rule 24)

· Credit for removing landscaping will only be available for landscaping that was permitted by the District and resulted in a specific debit to an allocation. The ability to obtain exterior credit when it can be documented that irrigation and landscaping has been in place and maintained since 1985 remains. This is consistent with existing Rule 24-C-1-b. (Rule 25.5)

· A reduced water use factor has been added for properties that are restricted to native vegetation by the jurisdiction. (Rule 24)

· The section on “calculation of unfactored connection charges” has been deleted. Similarly, the language referring to a connection charge surcharge has been deleted. These fees have not been collected since at least 1987 and possibly never were collected and the logistics of collecting these fees was not established.

· A two-year water permit expiration date is proposed for Rule 25 if a building permit has not been issued. (Rule 25)

· The two existing Water Use Credit application processes have been combined into one process, making documentation of water credits easy to explain and understand. The current two methods for calculating water credits have not been consistently followed over the years. The historic practice has been to grant credits for past abandonment when an applicant can produce documentation from the jurisdiction (i.e. a demolition permit or other city inspection). This was determined to be an incorrect application of the rule, and staff has stopped this practice. However, there is a compelling argument that there has been no notification of the need to establish a water credit before the permanent removal of water fixtures or uses, and indeed, most applications are submitted during the removal process and are processed after completion. The burden of proof to establish both the date of abandonment and the former capacity remain, and specific examples of evidence are added. The former requirement to apply for a credit within 18 months of abandonment is deleted, and the credit tracks from the date the abandonment occurred. (Rule 25.5)

· Credit for dual-flush ultra-low consumption toilets is shown on Table 3, and a fixture unit value for these toilets has been added to Table 1. (Rule 24 and Rule 25.5)

· Table 2: Nonresidential Water Use Factors has been updated to include several uses that have not been added to the table, but for which water factors have been established. This includes the new self-storage factor and modification of the hotel factor to one factor with the addition of water for large tubs in place of a luxury hotel factor. (Rule 24)

· The definition for affordable housing has been simplified to correspond to each jurisdiction’s definition. (Rule 24.5)

· The process for suspending and cancelling a water permit has been split into two processes, one that can be taken by the General Manager and the other by action of the Board. (Rule 25)

· Authorization to rehear an application denied by the Board has been changed from a decision of the Board to a decision of the General Manager. (Rule 26)

· The language that allows water credit in excess of 15 percent savings to revert to the jurisdiction has been deleted as this process was not implemented and other processes to transfer water credits were added to the Rules. (Rule 30)

RECOMMENDATION: The TAC should review the proposed conceptual ordinance and provide input to District staff and the Board. The conceptual ordinance is tentatively scheduled for preliminary consideration by the Board at the February 23, 2006 meeting.

EXHIBITS

2-A Preliminary Draft Ordinance No. 124 - Clarifying Rules Related to Water Permits and Credits

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