WATER DEMAND COMMITTEE

 

2.

DISCUSS GROUP I AND GROUP II NON-RESIDENTIAL WATER USE FACTORS

 

Meeting Date:

April 18, 2018

Budgeted: 

N/A

 

From:

David J. Stoldt,

Program/

N/A

 

General Manager

Line Item No.:

 

Prepared By:

Stephanie Locke

Cost Estimate:

N/A

 

Committee Recommendation:  N/A

CEQA Compliance:  This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378

SUMMARY:  At the March 2018 Board meeting, a juice bar applicant made the argument to the Board that because of their water efficient business practices (pre-made/mixed/prepared beverages, no ice maker, dishes, etc.) they should be classified as Group I rather than Group II.  Group II uses traditionally have included any business that serves food or drinks for on or off-Site consumption and that is not a full-service restaurant[1].  Over the years, the differences between Group II uses and restaurants has somewhat blurred, presenting the question of when is a deli/bakery/coffee house (or similar use) a restaurant?  Staff needs direction on when a Group II use should be placed into Group I, and when does a Group II use become a restaurant (MPWMD may want to adopt a definition) and therefore Group III.

Another blurring between Group I and Group II uses has occurred at the tasting rooms.  Tasting rooms initially were small businesses (at least on the Monterey Peninsula) that offered tastes (2 ounce or less pours) of their (usually non-water) product with the goal of getting the customer to sign up for the wine club and purchase product for off-site consumption.  More recently (e.g., in the past 10-15 years), tasting rooms have enlarged and many are outdoor oriented.  They have turned into a social venue similar to bars where patrons can sit in comfortable chairs and enjoy multiple glasses of wine (or bottles) and food (usually deli-like selections or brought in from a neighboring restaurant) while playing games, enjoying live entertainment, or participating in other activities, such as art classes.  Tasting rooms are not limited to wine:  Beer, juice, tea, and spirit businesses have opened tasting rooms.  Should the District differentiate its permit process between a tasting room that operates the “old way” and tasting rooms that attract patrons for social purposes?  Or, should the District continue to keep tasting rooms in Group I, but include the indoor and outdoor area (as permitted on the ABC license) in the Capacity calculation?

Another area of discussion is “Family Grocery,” “Supermarket,” and “Convenience Store.”  These businesses are all currently Group I, but there are many instances where there is food preparation, hot and cold food buffets, and coffee and drink service – activities that would result in Group II designation if on a stand-alone basis.

During the public hearing on March 14, 2018, Jeff Davi suggested that the District revisit the Group I and Group II factors and consider combining them.  Discussion on this concept may be appropriate given the District’s requirements for all Non-Residential uses to implement efficiency requirements by 2014.

RECOMMENDATION:  The Water Demand Committee should discuss the Group I and Group II factors, a possible definition for full service restaurants, the concept of combining Group I and Group II, and, if they are combined, how best to establish on-site credit for existing businesses.

DISCUSSION:  When processing a Water Permit or establishing a Water Use Credit or Water Credit, MPWMD utilizes Non-Residential water use factors based on square-footage or other factors (i.e., restaurant seats, hotel rooms, etc.) to establish a one-time estimate of a project’s water usage or Water Use Capacity[2].  The factors are based on average water consumption for similar types of businesses.  Low water use per square footage businesses are “Group I”, higher uses per square footage businesses are “Group II”, and “Group III” is made up of businesses that have unique factors, such as restaurants (seats) and hotels (rooms).  The Capacity calculation is also used to assess the District’s Capacity Fee and to ascertain that sufficient water credit is available on a Site or from a Jurisdiction’s Allocation to meet the project’s water needs, as required by the District’s Water Allocation Program Environmental Impact Report. 

Prior to 1993, the District used 56 unique water factors and did not debit an Allocation when a Water Permit was issued. In 1993, following adoption of the Water Allocation Program Environmental Impact Report and at the request of the District’s Citizen’s Financial Advisory Committee, the factors were grouped into categories that reflected similar types of water use to allow for some flexibility when changing tenants.  Prior to that, a change in tenants often required additional water from a Jurisdiction.  For example, to issue a Water Permit for a Change of Use from retail to an office, the applicant had to obtain a water Allocation from the Jurisdiction and pay fees.  By grouping the uses, administration of Water Permits for Non-Residential Changes in Use was streamlined, and tenants with similar water needs did not require a Water Permit.

From a permitting perspective, the concept of combining Group I and Group II is intriguing. The current process of making a square peg (Group II) fit into a round hole (Group I) due to the lack of water in an Allocation or credit is getting tedious.  To do so, an applicant must often undertake extreme and expensive retrofits or modified operating plans which are time consuming to verify and enforce.  Since Water Year 2007, water use in the commercial sector has decreased by 35% (1,557 AF), primarily as a result of installing water efficient fixtures, appliances, and landscapes.  Many of the current factors do not reflect these changes.

When the District allows a business to reduce its water footprint by unusual means, it creates an enforcement problem.  Although the District routinely records notices on the property title that explain the conditions of the Water Permit, this information does not always get conveyed to the tenant.  In addition, business practices and ownership/management change, fixtures and appliances are replaced.  The simpler the process, the easier it is to maintain compliance with Water Permit conditions. 

In considering the information provided in this report, the Committee should keep in mind the types of food/beverage businesses in the Group II category.  The varies widely.  In 2017, staff reviewed coffee house water use and found that consumption in nationally/regionally recognized chain stores (i.e., Starbucks and Peets) is significantly higher than local chains or independent businesses. 

 

EXHIBIT

None

 

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[1] The District does not have a definition for a “full service restaurant.”  Full service restaurants generally have a broad menu along with table service and a wait staff.  These establishments offer meals and snacks for immediate consumption primarily on-premise, though they may also offer takeout service.  Water use in a full service restaurant occurs primarily in the kitchen, although customers are served water, use the restrooms, and water is needed for cleaning.

[2] “Water Use Capacity” is defined as “the maximum potential water use which theoretically may occur, based on average water use data for similar structures and uses in the Monterey Peninsula region, as shown by projected water use tables set forth in Rule 24.” (MPWMD Rule 11, Definitions)