EXHIBIT 2-B
ITEM:		GENERAL MANAGER REPORTS
9.	Review and Discuss potential Modifications to the Expanded Water Conservation and Standby Rationing Plan
Meeting Date:			January 27, 2005
From:			David A. Berger, General Manager
Prepared by:			Stephanie Pintar

SUMMARY: At the September 14, 2004 Water Demand Committee meeting, the committee discussed potential modifications to the District’s Expanded Water Conservation and Standby Rationing Plan (Ordinance No. 92). Staff was directed to prepare a draft ordinance that would provide more flexibility in the implementation of Stage 3. Modifications to the plan were discussed at the request of Chair Edwards in response to concerns raised by Cal Am during the summer when community water use was exceeding the State Board limit. Steve Leonard from Cal Am was present and participated in the discussion at the September 14 meeting.

District staff met with Cal Am on December 7, 2004 to discuss potential changes to the Expanded Conservation and Standby Rationing Plan. As a result of that meeting, it was agreed that Stage 3 should be changed so that it is triggered by the Cal Am system production target being exceeded during any 30-day period twice from October through March, and exceeded once during any 30-day period from April through September. Other changes were discussed, including a plan to review the appropriateness of the Cal Am seven percent target for unaccounted-for water use, and its removal as a prerequisite to triggering Stage 3. Cal Am has provided the District with the final version of its 2004 unaccounted-for water study which includes a proposed approach for a joint staff effort (MPWMD and Cal Am) to determine if the seven percent target can be replaced with a different and more realistic unaccounted-for water performance standard.

District Counsel, Darby Fuerst and Stephanie Pintar met on December 17, 2004 to finalize the development of Ordinance No. 119, an ordinance that will amend Ordinance No. 92 (Expanded Conservation and Standby Rationing Plan).  The ordinance will not be considered in January due to the need to complete the CEQA review prior to first reading.  The CEQA work requires an Initial Study and Negative Declaration.  The Water Demand Committee reviewed a summary of the proposed changes to Ordinance No. 92 at its January 11, 2004 meeting, and concurred with staff’s intention to submit a draft ordinance for review at its February meeting, prior to first reading by the full Board.

If acceptable to the Water Demand Committee, first reading of the proposed ordinance would be scheduled for the February 24, 2004 meeting, second reading and adoption should occur March 21, 2004, with an effective date thirty days later on April 20, 2004. This schedule will put the changes into place before May 2005 when the new Stage 3 implementation process is most likely to be needed.

The following summarizes the proposed modifications:

1. The monthly production goal table is being revised by Darby to note the quarterly budgeting process, and to eliminate the Seaside Basin and Carmel sub-goal amounts for added flexibility (the total production goal amount would remain in the ordinance).

2. Stage 3 would be triggered when the Cal Am system production target is exceeded during any 30-day period twice from October through March, or exceeded once during any 30-day period from April through September.

3. The Board of Directors may trigger Stage 3 during April through September at any point that Cal Am has exceeded the production target, provided that the need for emergency conservation is demonstrated and is warranted without the 30-day waiting period.

4. The language for Cal Am's emergency rates will be included in Stage 3, including the implementation process proposed by Cal Am in its recent PUC filing. Stage 3 currently has outdated language that refers to the current full-time rate structure.

5. The requirement that Cal Am achieve seven percent unaccounted-for water use as a prerequisite to triggering Stage 3 will be removed. District staff will confer with Cal Am in a detailed, operational and engineering analysis it plans to undertake to determine if the seven percent figure is achievable, or whether it should be modified. Any changes to the unaccounted for use target would be brought to the Board for future consideration.

6. The District will define the base block for golf course users. Golf courses, as large landscape water users, are required to have a water audit and budget on file with Cal Am and to maintain use within the budget during Stages 2 and 3 of the program.

7. Definitions will be added for Estimated Applied Water (related to water budgets) and Irrigation Association.

8. Various "clean ups" will be made to the ordinance to delete language that no longer applies and to insert language to replace the deleted text.  An example of this is the explanation for the Excessive Use Rates in Rule 163 where the emergency rates will be.  Other "clean ups" include requirements for Cal Am to provide the District with requested information related to implementation of the stages, including access to water records. 

9. Water Waste Fees will be changed to indicate that the fees are cumulative and are charged daily until the violation is corrected.  The new ordinance will also indicate that these fees are appealable. Current rules indicate only the amount of the water waste fees (currently $50 for the first offense after a warning and $150 for subsequent offences).

10. Water budgets must be completed by an auditor certified by the Irrigation Association (the District's criteria). The current rule indicates that the District must certify an auditor, and the District requires certification by the Irrigation Association.

The Water Demand Committee reviewed and agreed to consider several other improvements to the water conservation provisions of the Expanded Water Conservation and Standby Rationing Plan (see bold section of minutes from Water Demand Committee attached as Exhibit 9-A). However, staff determined that expanding the rebate program (one of the recommended “improvements”) and adding new and expanded conservation requirements should be included in a separate ordinance to avoid complications and delay with the CEQA process. A more comprehensive CEQA analysis will be needed to implement new conservation standards.  Staff also feels that new conservation programs that effect the community (i.e., educational facility retrofits) should be discussed with the TAC/PAC and other interested parties prior to development.

RECOMMENDATION: No formal action is needed at this time. The Board should review the summary of proposed modifications to the Expanded Water Conservation and Standby Rationing Plan and direct staff to make any additional changes as necessary.

EXHIBITS

9-A Final Minutes of the September 14, 2004 Water Demand Committee Meeting

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