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HomeMy WebLinkAbout2016-08-17 - Board of Directors Meeting Agenda Packet Yorba Linda Water District AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Wednesday, August 17, 2016, 4:30 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Ric Collett, President Michael J. Beverage, Vice President Phil Hawkins Robert R. Kiley Gary T. Melton 4. PUBLIC COMMENTS Any individual wishing to address the Board is requested to identify themselves and state the matter on which they wish to comment. If the matter is on the agenda, the Board will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on the agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to three minutes. 5. DISCUSSION ITEMS This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action of the Board of Directors at the meeting, such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Board of Directors. Time permitting, it is generally in the District's interest to discuss these more complex matters at one meeting and consider formal action at another meeting. This portion of the agenda may also include items for information only. 5.1. 2016 Update of Water Financial Plan 5.2. Draft Updates to Conservation Ordinance 6. ADJOURNMENT 6.1. The next Regular Board of Directors Meeting will be held Thursday, August 25, 2016 at 8:30 a.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meetinq Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items and are distributed to a majority of the Board less than seventy-two (72) hours prior to the meeting will be available for public inspection in the lobby of the District's business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District's internet website accessible at http://www.ylwd.com/. Accommodations for the Disabled Any person may make a request for a disability-related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation. ITEM NO. 5.1 AGENDA REPORT Meeting Date: August 17, 2016 To: Board of Directors From: Marc Marcantonio, General Manager Presented By: Delia Lugo, Finance Manager Dept: Finance Prepared By: Delia Lugo, Finance Manager Subject: 2016 Update of Water Financial Plan DISCUSSION: Over the course FY 2015/16 there have been documented changes in the conservation mandates imposed on water retailers by the State Water Resources Control Board to promote state-wide conservation efforts with the goal to reduce water waste. The adopted rates from the 2015 Water Rate Study were based upon the water model utilizing a 36% reduction in volumetric revenue in the 2015/16 base year. Due to a change in conservation mandates, YLWD was able to self-certify a 0% conservation mandate. This 0% certification is projected to increase customer consumption by approximately 12% for FY 2016/17 above the year end projections of FY 2015/16. On June 6, 2016 the District entered into a Professional Services Agreement with Raftelis Financial Consultants, Inc. (RFC) to Update the Water Fund Financial Model due to the above mentioned changes in conservation mandates. Staff has provided RFC with the required data to update the financial model to determine the long-term financial impact on the District. The adopted Service Charge Rates listed in Resolution No. 16-10 have been used for the base year. Representatives from RFC are in attendance to present the results and recommendations of their analysis and to receive feedback form the Board. RFC will have the financial model available for additional Board requested scenarios for consideration. ATTACHMENTS: Description: Type: RFC Scope of Services.odf Backup Material Backup Material Presentation.Ddf Presentation Backup Material 445 S.Figueroa Street 213.327.4405 Suite#2270 -ax 626.583.1411 rfc Los Angeles,CA 90071 June 1, 2016 Delia D. Lugo Finance Manager Yorba Linda Water District 1717 E. Miraloma Avenue Placentia, CA 92870 Sublect: Scope of Services for Financial Plan Update 2016 Dear Ms. Lugo: Raftelis Financial Consultants, Inc. (RFC) is pleased to submit this scope of service for the Financial Plan Update 2016(Study)for the Yorba Linda Water District(District). Below are the proposed tasks and fees. Supe of Services Task 1-- update the Financial Plan Model RFC will obtain the FY 2017 budget and updated water supply costs, capital expenditure plans, and fund balances from the District and update the previously developed Water Financial Plan Model (current Model)to reflect the District's current Financial status. In addition,the District is interested in evaluating the financial impacts of different water sale projections and determining the appropriate rates for each scenario. RFC will add new features to the current Model to assist the District assessing financial impacts of up to three(3)water sales scenarios.The recommended revenue adjustments and resultant customer impacts will be provided to assist the District in making informed decisions. Meetings: Up to two (2)conference calls with District staff to discuss about the data and assumptions Deliverables: Updated Water Financial Plan Model in Microsoft Office WordTM' 2013 or later 11 Scope of Service for Financial Plan Update 2016 Yor°bca Linda Water District June 1, 2016 Task 2 Water }tate Workshops Following the completion of the Model, RFC will hold an on-site rate design workshop with District staff to develop different financial plan scenarios. The goal of this workshop is to identify the rates that will be presented at the rate workshop with the District Board. Changes and suggestions from staff will be incorporated into the analysis prior to presenting the final results during subsequent workshop with the District Board. In the Rate Design Workshop with the District Board, RFC will present the results of the financial plan and proposed rates and discuss the benefits and challenges associated with each scenario. RFC will utilize the updated Model to address questions or concerns discussed during the Workshops and run other applicable "what-if"scenarios. Meetings:Two (2) on-site Water Rate Workshops Deliverables: Presentation materials for the Rate Workshops in Microsoft PowerPoint TM 2013 or later Task 3 -- Contingency for Additional Analysis RFC has budgeted 32 hours for contingency work that may be required.The District will give notice if RFC is to perform this additional task. Meetings:As needed Deliverables:As needed Project Fees RFC will complete the above scope of services for a not-to-exceed amount of$25,000 (as shown in the table below). RFC will invoice the District monthly based on time and materials. Hours Requirements HOURLY RATS 5275 $iE5 8 1 Update the Financial Plan 9Vladei' 34 38 $8,430 2 ,Water Rate Workshops; 2 'U 10 36 i $9,356 3 Contingency for Additional Analysis 8 24 32 $7,201) TOTAL ESTIMATED MEETINGS/HOURS M; M 70 PROFESSIONAL FEES sq'!301) -$13,650 i Total Expenses $1,450 TOTAL FEES&EXPENSES $25,000 2 � Scope of Service for Financial plan Update 2016 Yorba Linda Water District June 1, 2016 We are delighted to have this opportunity to provide assistance to the District. If you agree with the proposed fees and expenses documented in this letter, please sign in the space on the following page and return one copy for our files. Please do not hesitate to call me at (213) 327-4405 if you have any questions. Sincerely yours, RAFTELIS FINANCIAL CONSULTANTS, INC. Sanjay Gaur Vice President We accept the terms of this engagement letter: Marc Marcantonio Signature Name of authorized agent /& /� General Manger Date Title 3 � YL W Yorba Linda Water District 2016 Water Rate Study Board Workshop August 17, 2016 AGENDA Reserve Policy discussion Financial Plan recap Board-selected Scenarios (open Model ) Fixed charge reduction t Aug 17, 2016 2016 Water Rate Study 2 Reserve Policy RISK ASSESSMENT The District's financial policies should address F the 3 types of risk: a e KH4YN /`,,•"4� _,VI14•.NER'kBIL=PTIESz.%z..:...'='r•:. 1. Predictable Risk — Events that could reasonably occur. ; 2. Unpredictable Risk — Events that are less likely to occur, but whose potential impact is measurable. 3. Unknown Risk — Events that cannot reasonable by predicted and whose potential impact is not measurable. rf� -I-MPORTANCE OF FINANCIAL POLICIES To maintain financial solvency Provide a basis for coping with fiscal emergencies ( revenue short-falls, asset failure, emergency etc. ... ) To provide guidelines for sound financial management with an overall long-range perspective 3. To enhance financial management transparency t Aug 17, 2016 2016 Water Rate Study - WHY Do WE NEED RESERVES .? MEL,-- Nature of utility system Capital intensive Highly fluctuating capital costs Risk and liability unknown liability costs Healthy reserve level 4 better credit ratings 4 lower interest rates for future debt Aug 17, 2016 2016 Water Rate Study RESERVE POLICY FOR FY 2017 Resery Existing Proposed (Minimum) (industry S • • Operating $3.13M $6.53M (% of Operating Budget) (12%) (90 days) Rate Stabilization n/a $2.81M (15% of commodity revenues) Emergency $1M $10M (based on critical asset valuation) Capital Reserve $2.02M $7.33M (2% of asset value replacement cost) COP/Debt Service $4.86M $4.86M (100% of Annual Debt Service) (100% of Annual Debt Service) Employee Benefit $455K $455K Liability Total Minimum Target $11.47M $31.99M for FY 2017 Aug 17, 2016 2016 Water Rate Study Financial Plan Recap SCENARIos EVALUATED Scenario 1: 12% Rebound, 1" meter charge = $41.57, with no pass-through Scenario 2: 12% Rebound, 1" meter charge = $32.49, with no pass-through Scenario 3: 12% Rebound, 1" meter charge = $32.49., with no pass-through, with recommended future increases to meet minimum reserve levels FINANCIAL PLAN SCENARIO 1 Water Revenue Adjustrnel Coverage Cha rt o 0 � Z5, _ 50Q, Water Revenue Adjustments and f 15% - t t 300% Debt Coverage 5% 0.0�s 0.0% 0.0% 0.0% 0.0116 077s61.0% 100% 5% v - -100% ' ➢ Blue bars — No Revenue Adjustment (left axis) j ;is-a; ,3o:o%r ? ➢ Red line —Target debt coverage 125% -25% -500% { ➢Green line — Projected debt coverage (right Re�Adj FY 2016 FY 2017 FY 2018 FY 2019 FY2020 FY 2021 Coverage axis) Fixed Charge Rev Adj CominodityRev Adjint ➢ Red dot —Alert coverage when falling below +Coverage Ratio(right axis) Required Coverage-125% • Alert Coverage target Millions Total Water Reserve Ending Balances $30 = Projected Reserve Balances $20 $10 - ➢Green bars — Projected ending reserve balances .......... $o ➢Green line — Industry standard target balances Red line — Minimum target balances -$10 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ➢ Red dot — alert balances when ending balances fall below target levels (no alerts present) Ending Balances —Industry Standard Target Balances o Alert Balances —Minimum Target Balances Aug 17, 2016 2016 Water Rate Study 10 FINANCIAL PLAN SCENARIO 1 $40 Water Operating Financial Plan Operating Financial Plan � -: s - ➢ Lines — revenues $20 ➢ Red — current rates with pass-through $0 WS costs ➢Green — proposed rates with pass- -$20 -= i FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 through WS costs (no revenue adjustments 4 same as current) OYLWD O&M •Water Cost �Debt Service&LOC Principal Non-Operating ➢Stacked bars - expenses Res Funding —Current Rev —Proposed Rev Water CIP and Funding Sources $g _ $7.09 o $7 - A $6 - $5.06 Water CIP & Funding Sources $5 $3.91 $4 $3 < $1.81 -- $1.85 $1.91 $2 ; ➢Green bar — PAYGO $1 ➢ Purple bar — New Debt (by Line of Credit $o FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ` (LOC)) ■Debt Funded -i PAYGO ♦Total CIP ` Aug 17, 2016 2016 Water Rate Study 11 FINANCIAL PLAN SCENARIO 1 Water Revenue Adjustments&Coverage Chart Water Operating Financial Plan 25% -- 500% $40 _. _ I : I 15% - 300% $20 _ S% �, 0.0°h 0.0°5 0.0116 0.045 O.t}°f, 0.045 0.014 0.0% 0.09& 0.0° .0°5 e 100% ------------- so ------$o -5% _ -100% — 1.5:°/0 -'-v30:Q9o•.. i -$20 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 -25% -: -500%ji RevAdj FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Coverage F:::=YLWD O&M Water Cost �FixedChargeRevAdj �Commodity Rev Adjmt I�Debt Service&LOC Principal Non-Operating +Coverage Ratio(right axis) —Required Coverage-125% Res Funding —Current Rev • Pro Alert Coverage i Proposed Rev I C' Millions Total Water Reserve Ending Balances Water CIP and Funding Sources $40 $8 $7.09 $30 - o $7 $6 _ $5.06 $20 $5 1 $3.91 $10 - $4 $0 $2 $1 $10 $0 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Ending Balances —Industry Standard Target Balances ! g Debt Funded PAYGQ _Total CIP I o Alert Balances —MinimumTarget Balances 1 1 1 1 1 1 1 1 - %Charge in Flxied Charge, 0% U% 1" Meter Charge $41.57 $41.57 $41.57 $41.57 $41.57 $41.57 Aug 17, 2016 016 Water Rate Study 12 FINANCIAL PLAN SCENARlo 2 Water Revenue Adjustments&Coverage Chart Water Operating Financial Plan I 25% - 7 5001 - o 15% 1 — 300%a 88% = � $20 — i 51 o.o�s o.a� a.a% o.o/. U.N. o.c, )% o.-29%% - 1001 �r _ $o 5% -100. -$20 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 -5001yo Rev Adj FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Coverage OYLWD O&M Water Cost O Debt Service&LOC Principal Non-Operating Fixed Charge Rev Adj Commodity Rev Adjmt Res Funding —Current Rev +Coverage Ratio(right axis) —Required Coverage-125% Proposed Rev • Alert Coverage Millions Total Water Reserve Ending Balances Water CIP and Funding Sources $40 - $8 $7.09 $30 $7 < A $6 $5.06 $20 $11 $5 < $3.91 $10 — $5 $4 A $3 $1.81 $1.85 $1.91 $0 $2 ! -$10 $0 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Ending Balances —Industry Standard Target Balances ■Debt Funded im PAY60 Total CIP o Alert Balances —MinimumTarget Balances 1 1 1 1 1 1 1 %Chanj;e In Fixied Charge::. 22% 0% 1" Meter Charge $41.57 $32.49 $32.49 $32.49 $32.49 $32.49 Aug 17, 2016 2016 Water mate Study 13 FINANCIAL PLAN SCENARIo 3 Water Revenue Adjustments&Coverage Chart Water Operating Financial Plan l 25% -- 500% i C 15% 12.0Y. 12.0% 12.0% 12.D% 300% �_ $40 " 5% 0.0°r5 0.0% 0.0% 0.0% .0% l 100% _ $20 ....._ '.., ( 5%u N — -100,Y. SD -$20 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 -25% ' -21.9. 5004 Rev Adj FY 2016 FY 2017 FY 2018 FY 2D19 FY 2020 FY 2021 coverage ®YLWD O&M Water Cost Fixed Charge Rev Adj Commodity Rev Adjmt ©Debt Service&LOC Principal Non-Operating +Coverage Ratio(right axis) —Required Coverage-1259/. Res Funding —Current Rev • AlertCoveraRe Proposed Rev Millions Total Water Reserve Ending Balances Water CIP and Funding Sources $8 $7.09 $30 $7 = • $6 = $5.06 $20 $s $3.91 $10 _ $4 $0 52 f $1 -$t0 $0 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 I F---"Ending Balances —Industry Standard Target Balances ! ■Debt Funded We PAYGO •Total CIP I o Alert Balances -Minimum Target Balances I 1 1 1 1 1 1 1 ww Car�ge irr Flxied:Charge : . ;; 22:% "12% w 12% w: 12% '12% 1" Meter Charge $41.57 $32.49 $36.39 $40.75 $45.64 $51.12 Aug 17, 2016 `016 Water Rate Study 14 Board Selected Scenarios Fixed Charge Reduction FIXED CHARGE REDUCTION Direction from District Board : All commodity revenues from sales beyond the status quo sales of 14,420 AF should be offset by a reduction in the monthly fixed charge. t Aug 17, 2016 2016 Water Rate Study 17 FIXED CHARGE REDUCTION Projected water sales increase by 1,506 AF (656K hcf) From 14,420 AF to 15,926 AF Commodity rate is $2.70 Increase in revenue is $1.77M (656K x $2.70) However water supply cost has increased Water purchase costs are $693/AF, or $1.59/hcf (blended cost) Increase in water supply cost is $1M (656K x $1.59) Net increase in commodity revenue is $771K -- ($6.62M - $5.85M) t Aug 17, 2016 2016 Water Rate Study 18 ITEM NO. 5.2 AGENDA REPORT Meeting Date: August 17, 2016 To: Board of Directors From: Marc Marcantonio, General Manager Presented By: Damon Micalizzi, Public Information Manager Prepared By: Damon Micalizzi, Public Information Manager Subject: Draft Updates to Conservation Ordinance SUMMARY: With the State Water Resources Control Board imposing Conservation Regulations in 2015 and currently considering permanent Conservation Regulations moving forward, the District's Water Shortage Contingency Plan - Conservation Ordinance (09-01) needs to be updated to accommodate future potential water rationing from Sacramento. The attached Draft Conservation Ordinance is a preliminary attempt to blend the anticipated regulations from the State with the District's previously drafted Conservation Ordinance. ATTACHMENTS: Name: Description: Type: Draft Ordinance.pdf Draft Ordinance Backup Material ORDINANCE NO. XX AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT REPEALING ORDINANCES NO. 09-01 AND ADOPTING A DROUGHT RESPONSE WATER CONSERVATION PROGRAM AND WATER SHORTAGE CONTINGENCY PLAN BE IT ORDAINED by the Board of Directors of the Yorba Linda Water District as follows: SECTION 1: DECLARATION OF NECESSITY AND INTENT OF DROUGHT MANAGEMENT PLAN This ordinance establishes regulations to be implemented during times of drought, declared water shortages, water conservation mandates or emergencies to conserve water, enable effective water supply planning, assure reasonable and beneficial use of water, prevent waste of water, and prevent unreasonable use of water within the Yorba Linda Water District. Such actions are to ensure adequate supplies of water to meet the needs of the public, and further the public health, safety, and welfare, recognizing that water is a scarce natural resource that requires careful management. This ordinance establishes four levels of water conservation response actions to be implemented in times of shortage, mandate or emergency with increasing restrictions on water use in response to worsening drought, mandate or emergency conditions and decreasing available supplies. SECTION 2: APPLICATION (a) The provisions of this ordinance apply to any customer using water provided by the Yorba Linda Water District ("District"). (b) This ordinance is intended solely to further the conservation of water. It is not intended to implement any provision of Federal, State, or local statutes, ordinances, or regulations relating to protection of water quality or control of drainage or runoff. Refer to the local jurisdiction or Regional Water Quality Control Board for information on any storm water ordinances and storm water management plans. (c) Nothing in this ordinance is intended to affect or limit the ability of the District to declare and respond to an emergency, including an emergency that affects the ability of the District to supply water. (d) The provisions of this ordinance do not apply to use of the water from private wells or to recycled water, including greywater systems approved by the appropriate local authority. DRAFT Ordinance No. XXX August 17, 2016 Page 2 SECTION 3: WATER WASTE PROHIBITIONS The following prohibitions are in effect at all times: (a) The use of potable water for irrigation of ornamental turf within the public street rights of ways including adjacent landscape strips. (b) The use of potable water outside of newly constructed homes and buildings inconsistent with regulations established by the California Building Standards Commission. (c) The application of potable water to outdoor landscaping during and after 48 hours of a measurable rain event. (d) A customer shall not allow water to leave the customer's property by drainage onto adjacent properties or public or private roadways or streets or gutters due to excessive irrigation, incorrectly applied irrigation and/or uncorrected leaks. (e) Customers shall repair or stop all water leaks upon discovery or within forty-eight hours of notification by the Yorba Linda Water District. (f) Washing any paved area (sidewalks, driveways, parking areas, tennis courts, etc.) is only allowed to alleviate immediate safety or sanitation hazards. To relieve hazards, only a power washer or a hose with a shutoff nozzle may be used. (g) A customer shall not continuously fill swimming pools and spas that are draining due to uncorrected leaks. (h) A customer shall not use non-recirculating ornamental fountains or cascading fountains. (i) Vehicle washing shall only be done in a commercial car wash or by using a hose with an automatic shutoff nozzle or hand held container. (j) Restaurants and other food establishments shall only serve and refill water upon request. (k) Guests in hotels, motels, and other commercial lodging establishments shall be provided the option of not laundering towels and linens daily. DRAFT Ordinance No. XXX August 17, 2016 Page 3 (1) A customer may only irrigate potted plants, non-commercial vegetable gardens and fruit trees, residential and commercial landscapes, including golf courses, parks, school grounds and recreation fields, before 9:00 a.m. and after 6:00 p.m. A customer may irrigate the following at any time: (1) as required by a landscape permit; (2) as needed for erosion control; (3) for establishment, repair, or renovation of public use fields for schools and parks; (4) for landscape establishment following a disaster, such as a fire; (5) for renovation or repair of an irrigation system with an operator present, or (6) for commercial growers, agricultural water accounts and nurseries using a hand-held hose equipped with a positive shut-off nozzle, a hand held container, or when a drip or m icro-irrigation system or equipment is used. Irrigation of nursery propagation beds is permitted at anytime. SECTION 4: DROUGHT RESPONSE LEVEL 1 — DROUGHT WATCH This is a "Drought Watch" condition, and applies when the District is notified that, due to drought, water conservation mandates or other supply reductions, there is a reasonable probability there will be a required consumer demand reduction of up to 10 percent. The District General Manager shall declare the existence of a Drought Response Level 1 and implement Level 1 voluntary conservation practices. With this alert, the District will increase public outreach and awareness and take action to encourage Level 1 conservation practices: (a) LEVEL 1 VOLUNTARY CONSERVATION PRACTICES (1) Residential and commercial landscape irrigation is limited to no more than three assigned days per week on a schedule established by the General Manager and posted by the District. This shall not apply to growers with a commercial account agricultural water accounts or nurseries. (2) Use non-potable water for construction purposes when available and permitted for use in accordance with all local, State and Federal regulations. DRAFT Ordinance No. XXX August 17, 2016 Page 4 SECTION 5: DROUGHT RESPONSE LEVEL 2 — DROUGHT ALERT This is a "Drought Alert" condition, and applies when the District is notified that, due to drought, water conservation mandates or other supply reductions, there is a reasonable probability there will be a required consumer demand reduction of up to 20 percent. With this alert, the District will increase public outreach and awareness regarding mandatory Level 2 conservation practices. The District Board of Directors shall declare the existence of Drought Response Level 2 condition, the allocation reduction, and implement Level 2 mandatory water conservation practices. All District customers shall comply with the applicable Level 2 Drought Alert mandatory conservation practices: (a) LEVEL 2 MANDATORY CONSERVATION PRACTICES (1) Residential and commercial landscape irrigation is limited to no more than three assigned days per week from April through October and no more than two days per week, from November through March, on a schedule established by the General Manager and posted by the District. This shall not apply to commercial growers, agricultural water accounts or nurseries. (2) Irrigation, using standard sprinklers, is limited to no more than 10 minutes per watering station per assigned day. Systems using water-efficient devices, including but not limited to: weather based controllers, drip/micro- irrigation systems and stream rotors are excluded. SECTION 6: DROUGHT RESPONSE LEVEL 3 — DROUGHT CRITICAL This is an official "Drought Critical' condition, and applies when the District is notified that, due to drought, water conservation mandates or other supply reductions, there is a reasonable probability there will be a required consumer demand reduction of up to 30 percent. The District Board of Directors shall declare the existence of a Drought Response Level 3 condition, the allocation reduction, and implement mandatory Level 3 conservation practices. All District customers shall comply with Level 3 Drought Critical mandatory conservation practices: (a) LEVEL 3 MANDATORY CONSERVATION PRACTICES (1) Residential and commercial landscape irrigation is limited to no more than two assigned days per week from April through October and no more than once per week, from November through March, on a schedule established by the General Manager and posted by the District. This shall not apply to commercial growers, agricultural water accounts or nurseries. (2) Irrigation, using sprinklers, will be limited to no more than 8 minutes per watering station per assigned day. Systems using water-efficient devices, DRAFT Ordinance No. XXX August 17, 2016 Page 5 including but not limited to: weather based controllers, drip/micro-irrigation systems and stream rotors are excluded. (3) Power washing and/or cleaning and spraying of commercial or residential structures is prohibited. (4) Ornamental lakes or ponds shall not be refilled, except to the extent needed to sustain aquatic life. (5) The filling or refilling of pools or spas is prohibited, except as needed to prevent damage to the pool or spa. (6) Washing vehicles except at commercial carwashes that re-circulate water by high pressure/low volume wash systems is prohibited. SECTION 7: DROUGHT RESPONSE LEVEL 4 - DROUGHT EMERGENCY CONDITION This is an official "Drought Emergency" condition, and applies when the District is notified that, due to drought, water conservation mandates or other supply reductions, there is a reasonable probability there will be a required consumer demand reduction of greater than 30 percent. The District shall declare a Drought Emergency in the manner and on the grounds provided in California Water Code Section 350. All District customers shall comply with conservation practices required during, Level 2 Drought Alert, and Level 3 Drought Critical conditions and shall also comply with Level 4 Drought Emergency mandatory conservation practices: (a) LEVEL 4 MANDATORY CONSERVATION PRACTICES (1) All landscape irrigation and other outdoor watering for residential and commercial customers, not including commercial growers, agricultural water accounts and nurseries, is prohibited, except the minimum use necessary for: (i) Maintenance of existing landscaping necessary for fire protection as specified by the Orange County Fire Authority; (ii) Maintenance of existing landscaping for erosion control; (iii) Maintenance of plant materials identified to be rare or essential to the well-being of rare animals; (iv) Maintenance of landscaping within active public parks and playing fields, day care centers, school grounds, cemeteries, and golf course greens, provided that such irrigation does not exceed two days per week; (v) Watering of livestock; and DRAFT Ordinance No. XXX August 17, 2016 Page 6 (vi) Public Works projects and actively irrigated environmental mitigation projects. (b) NEW POTABLE WATER SERVICE ALLOWANCE Upon the declaration of a Drought Response Level 4 condition, no new potable water service shall be provided, no new temporary meters or permanent meters shall be provided or installed, and no statements of immediate ability to serve or provide potable water service (such as, will serve letters, certificates or letters of availability) shall be issued, except under the following circumstances: (1) A valid, unexpired building permit has been issued for the property as of the date of adoption of a Drought Response Level 4 and meter capacity fees have been paid; or (2) The project is necessary to protect the public's health, safety and welfare; or (3) The applicant provides substantial evidence of an enforceable commitment that water demands for the project will be offset prior to the provision of a new water meter(s)to the satisfaction of the District. (c) RESTORATION OF SERVICE/ METER TURN ON This provision shall not be construed to preclude the resetting or turn-on of meters to provide continuation of water service or to restore service that has been interrupted for a period of one year or less. (d) MISCELLANEOUS PROVISIONS (1) Upon the declaration of a Drought Response Level 4 condition, the District will suspend consideration of water service annexations to its service area. DRAFT Ordinance No. XXX August 17, 2016 Page 7 SECTION 8: HARDSHIP VARIANCE If, due to unique circumstances, a specific requirement of this ordinance would result in undue hardship to a customer using District water or to property upon which District water is used, that is disproportionate to the impacts to District water users generally or to a similar property or classes of water uses, then the person may apply for a variance to the requirements as provided in this Section. (a) The variance may be granted or conditionally granted, only upon a written finding of the existence of facts demonstrating an undue hardship to a customer using District water or to property upon which District water is used, that is disproportionate to the impacts to District water users generally or to similar property or classes of water use due to specific and unique circumstances of the user or the user's property. (1) An application for a Hardship Variance shall be in writing and may be accompanied by photographs, maps, drawings, and other information in support of the application. (2) An application for a Hardship Variance shall be denied unless the General Manager finds, based on the information provided in the application, supporting documents or such additional information as may be requested, and on the water use information for the property as shown by the records of the District, all of the following: (i) That the variance does not constitute a grant of special privilege inconsistent with the limitation upon other District customers. (ii) That because of special circumstances applicable to the property or its use, the strict application of this ordinance would have a disproportionate impact on the property or use that exceeds the impacts to customers generally. DRAFT Ordinance No. XXX August 17, 2016 Page 8 (iii) That authorization of such variance will not be of substantial detriment to adjacent properties, and will not materially affect the ability of the District to effectuate the purpose of this Ordinance and will not be detrimental to the public interest. (iv) The condition or situation of the subject property or the intended use of the property for which the variance is sought is not common, recurrent or general in nature. (b) The General Manager or his designee shall exercise approval authority and set a hearing within 30 days upon receipt of a completed application for a Hardship Variance. The General Manager shall notify the applicant of the decision to approve, conditionally approve, or deny the variance within 5 days of the hearing. (c) A customer may appeal the decision of the General Manager by filing a request for a hearing before the District Board of Directors, at a regularly scheduled Board meeting, within 10 days of the decision. The District will provide written notice of the hearing day to the customer. At the hearing before the Board the customer may present testimony and written documentation demonstrating that the Hardship Variance is warranted in accordance with the requirements of this section. The decision of the Board of Directors shall be final. SECTION 9: VIOLATIONS AND PENALTIES Violations of any provisions of the ordinance herein must be personally observed by members of the District staff able to personally attest to them. The fines for such violations will be collected on the water bill. Failure to pay a fine amount will be treated as nonpayment of the water bill and water service may be terminated as a result. Protests for violations are allowable per Section 10 of this ordinance. The fines for such violations are as follows: 1. First Violation The Yorba Linda Water District will hand deliver a door hanger (Exhibit B) to the location of the violation and will also mail a Notice of First Violation (Exhibit C) to the current billing address. 2. Second Violation A second violation within twelve (12) calendar months of the first violation is punishable by a penalty not to exceed one hundred dollars ($100). This amount will be added to the next water bill fifteen days after the date of the violation, if not protested. The Yorba Linda Water District will hand deliver a door hanger (Exhibit B) to the location of the violation and will also send a Notice of Second Violation {Exhibit D) to the current billing address. DRAFT Ordinance No. XXX August 17, 2016 Page 9 3. Third Violation A third violation within twelve (12) calendar months of the first or second violation is punishable by a penalty not to exceed two hundred and fifty dollars ($250). This amount will be added to the next water bill fifteen days after the date of the violation, if not protested. The Yorba Linda Water District will hand deliver a door hanger (Exhibit B) to the location of the violation and will also send a Notice of Third Violation (Exhibit E) to the current billing address. 4. Fourth and Subsequent Violations A fourth and any subsequent violation within (12) calendar months of the first or any subsequent violation is punishable by a fine not to exceed five hundred dollars ($500). This amount will be added to the next water bill fifteen days after the date of the violation, if not protested. The Yorba Linda Water District will hand deliver a door hanger (Exhibit B) to the location of the violation and will also send a Notice of Fourth and Subsequent Violations (Exhibit F to the current billing address. 5. Water Flow Restrictor Device In addition to any fines, the District at the discretion of the General Manager may install a water flow restrictor device of approximately one gallon per minute capacity for services up to one and one-half inch size and comparatively sized restrictors for larger services. The restrictor will be installed by the District forty-eight (48) hours after a Notice of Intent to Install Flow Restrictor {Exhibit G) is sent to the current billing address. The restrictor will remain installed for a minimum of forty-eight {48} hours or such time as the General Manager, in his discretion, should decide. 6. Water Service Discontinuation In addition to any fines and the installation of a water flow restrictor, the District, at the discretion of the General Manager, may disconnect a customer's water service for willful violations of mandatory restrictions listed herein. The discontinuation of service will be imposed by the District forty-eight (48) hours after a Notice of Intent to Discontinue Service (Exhibit H) is sent to the current billing address, and will be imposed in the same process as disconnection pertaining to unpaid bills. A person or entity that violates this ordinance is responsible for payment of the District's charges for installing and/or removing any flow restricting device and for disconnection and/or reconnecting service per the District's schedule of charges then in effect. The charge for installing and/or removing any flow restricting device must be paid to the District before the device is removed. Nonpayment will be subject to the same remedies as nonpayment of basic water rates. DRAFT Ordinance No. XXX August 17, 2016 Page In the event that the individual responsible for the payment of the water bill is not the violator of the ordinance, notification of penalties will go to both the violation address and the billing address on file, with any and all fines and associated charges. Payment of the bill will be the final responsibility of the individual named on the account.