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HomeMy WebLinkAbout2008-07-15 - Executive-Administrative-Organizational Committee Meeting Agenda Packet• N~ w YORBA LINDA WATER DISTRICT EXECUTIVE-ADMINISTRATIVE-ORGANIZATIONAL COMMITTEE MEETING Tuesday, July 15, 2008, 4:00 p.m. 1717 E. Miraloma Avenue, Placentia, CA 92870 - Tel: (714) 701-3020 AGENDA • 0 COMMITTEE: Director John Summerfield, Chair Director William R. Mills Alternate: Director Ric Collett STAFF: Michael A. Payne, General Manager Ken Vecchiarelli, Asst. General Manager INTRODUCTION OF VISITORS AND PUBLIC COMMENTS: Any individual wishing to address the committee is requested to identify themselves and state the matter on which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on this agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to five minutes. ACTION ITEMS: This portion of the agenda is for items where staff presentations and committee discussions are needed prior to formal committee actions. None DISCUSSION ITEMS: This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Committee Members. This portion of the agenda may also include items for information only. 2. Revisions to the 2005 Urban Water Management Plan 3. Review of Board of Directors & General Manager - Form 700 (continued) 4. Status report on Grand Jury request 5. Prevailing Wage Rates 6. Status report on Legislative Issues 7. Status report on Grant Applications ADJOURNMENT: The next Executive-Administrative-Organizational Committee is scheduled for August 19, 2008, 4:00 p.m. • Items distributed to the Board Committee less than 72 hours prior to meeting Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items and are distributed to the Board Committee 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 htto://www.vlwdCo)vlwd.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 Michael A. Payne, General Manager/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. • • -2- ITEM NO. is ORANGE COUNTY GRAND JURY John W. Summerfield, President Yorba Linda Water District 4622 Plumosa Drive Yorba Linda, CA 92885 Dear Mr. Summerfield: 700 CIVIC CENTER DRIVE WEST • SANTA ANA, CALIFORNIA 92701 •714/834-3320 FAX 714/834-5555 May 14, 2008 Enclosed is a copy of the 2007-2008 Orange County Grand Jury report, "Water Budgets, Not Water Rationing." Pursuant to Penal Code 933.05(8, a copy of the report is being provided to you at least two working days prior to its public release. Please note that, "No officer, agency, department, or governing body of a public agency shall disclose any contents of the report prior to the public release of the final report." (Emphasis added.) It is required that you provide a response to each of the findings and recommendations of this report directed to your office in compliance with Penal Code 933.05(a) and (b), copy attached. For each Grand Jury recommendation accepted and not implemented, provide a schedule for future implementation. In addition, by the end of March of each subsequent year, please report on the progress being • made on each recommendation accepted but not completed. These annual reports should continue until all recommendations are implemented. It is requested that the response to the recommendations be mailed to Nancy Wieben Stock, Presiding Judge of the Superior Court, 700 Civic Center Drive West, Santa Ana, CA 92701, with a separate copy and an electronic format (PDF on CD preferred) mailed to the Orange County Grand Jury, 700 Civic Center Drive West, Santa Ana, CA 92701, no later than 90 days after the public release date, May 22, 2008, in compliance with Penal Code 933, copy attached. The due date then is August 20, 2008. Should additional time for responding to this report be necessary for further analysis, Penal Code 933.05(b)(3) permits an extension of time up to six months from the public release date. Such extensions should be advised in writing, with the information required in Penal Code 933.05(b)(3), to the Presiding Judge of the Superior Court, with a separate copy of the request to the Grand Jury. We tentatively plan to issue the public release on May 22. Upon public release, the report will be available on the Grand Jury web site (www.ocarandiui .or Very, truly oyrs, WAS n very An an 2007-2008 ORANGE UNTY GRAND JURY AAA:dv Enclosures • Grand Jury Report Penal Code 933, 933.05 CuNf IDENTIAL EW S • ORANGE COUNTY GRAND JURY 700 CIVIC CENTER DRIVE WEST • SANTA ANA, CALIFORNIA 92701.714/834-3320 May 22, 2008 FAX 714/834-5555 WATER BUDGETS, NOT WATER RATIONING SANTA. ,ANA, CALIFORNIA - The 2007-2008 Orange County Grand Jury released a report today regarding Orange County's potential water crisis. Orange County faces a looming water crisis. A prolonged drought throughout the West, coupled with a court order curtailing water imports, n.ow threatens Orange County's future abi lily to satisfy the thirst of its growing population. The 2007-2008 Orange County Grand Jury agrees that the best and most immediate solution is further water conservation. Past conservation efforts have achieved considerable success through improved appliance and plumbing technology .inside the home, a trend that is expected to continue as older units are replaced. Yet, a sizeable amount of water is still wasted, especially outdoors where the greatest opportunity for further conservati on. lies, According to water agencies, most people water gardens and. lawns too often and too much. The Grand Jury calls upon. water agencies to expand. efforts to motivate and educate residential. customers to conserve water.. It specifically recommends a two-step approach; • Water agencies should establish conservation pricing based upon an allotment or water budget for each household with tiered pricing to encourage conservation from those who exceed their allotments; and These agencies must implement more effective ways to motivate and educate the public on how to water gardens and lawns without wasting water. The Grand Jury identified several techniques and devices, such as smart timers and water calculators to improve the efficiency of residential landscape watering. For a full, version of this report, as well as others, visit the Grand Jury website at www.acRran.diurv.org or call (714) 834-3320. • 2007-2008 ORAN E COU*GRA- URY Ann. Avery A nBecome a part of the Grand Jury process, call. (714) 834-6747 for information and an application, WATER BUDGETS, NOT WATER RATIONING 0 SUMMARY Orange County faces a looming water crisis. A prolonged drought throughout the West, coupled with a court order curtailing water imports, now threatens Orange County's future ability to satisfy the thirst of its growing population. The 2007-2008 Orange County Grand Jury agrees that the best and most immediate solution is further water conservation. Past conservation efforts have achieved considerable success through improved appliance and plumbing technology inside the home, a trend that is expected to continue as older units are replaced. Yet, a sizeable amount of water is still wasted, especially outdoors where the greatest opportunity for further conservation lies. According to water agencies, most people water gardens and lawns too often and too much. The Grand Jury calls upon water agencies to expand efforts to motivate and educate residential customers to conserve water. It specifically recommends a two-step approach: • Water agencies should establish conservation pricing based upon an allotment or water budget for each household with tiered pricing to encourage conservation from those who exceed their allotments; and • These agencies must implement more effective ways to motivate and educate the public on how to water gardens and lawns without wasting water. The Grand Jury identified several techniques and devices, such as smart timers and water calculators to improve the efficiency of residential landscape watering. REASON FOR INVESTIGATION Water agencies and news accounts warn of a potential water crisis in Orange County because of a multiyear drought in the Western United States, especially in California, that contributes to reduced water levels in the Colorado River and a reduced Sierra Nevada snow pack. A court order to protect an endangered fish, the Delta smelt, has reduced imported water from the Sacramento-San Joaquin Delta, where levee problems further threaten that water supply. These developments, plus a growing population, are putting additional strain on another important Orange County water source, its underground water basin or aquifer. For these reasons, the Grand Jury felt compelled to review the effectiveness of measures currently being taken to avert a severe water shortage in the near future. C METHOD OF INVESTIGATION The method of investigation included: • A review of literature on current and future water needs in Orange County • A tour of the State Water Project in Oroville and the Sacramento-San Joaquin Delta • Interviews with representatives of the Orange County Water District, the Municipal Water District of Orange County, Irvine Ranch Water District and the Fullerton College Horticulture Program • A survey of water bills issued by different Orange County water agencies • A review of questionnaires sent to all retail water agencies in Orange County • Review of landscape watering principles and practices from various sources • Review of local Internet sites that promote water conservation • Inspection of drought-resistant landscaping and water-saving irrigation devices BACKGROUND AND FACTS Orange County is a densely populated, semi-arid region which gets relatively little precipitation. More than half of its water, 53%, is imported by the Metropolitan Water District of Southern California (MWD), which in turn sells to the Municipal Water District of Orange County (MWDOC) and three cities. The MWDOC was formed in 1951 to contract with MWD to acquire this supplemental imported water and to coordinate the water supply for 29 Orange County water agencies. The cities of Anaheim, Fullerton and Santa Ana purchase water directly from the MWD, a practice initiated before the MWDOC was created. The remaining 47% of the water used in Orange County comes primarily from an underground basin or aquifer, located under the northern half of Orange County and managed by the Orange County Water District. The OCWD was formed in 1933 for the purpose of managing and replenishing this underground basin. Aquifer water is pumped from wells by 20 Orange County water agencies that are within the basin boundaries, supplying approximately 74% of their water needs. The actual amount differs with each member and is adjusted annually on the basis of conditions in the basin. The following chart demonstrates the distribution of water in Orange County. 0 • T• • 0 Other counties receiving water from MWD: Metropolitan Water District MWD [water imported to Orange County] LA County San Diego County Ventura County Riverside County San Bernardino County Cities and Water Districts which purchase from MWDOC: Brea La Habra San Clemente San Juan Capistrano El Toro Water District Emerald Bay Service District Laguna Beach County Water Dist Moulton Niguel Water District Santa Margarita Water District South Coast Water District Trabuco Canyon Water District k i v Municipal Water District of Orange County MWDOC [manages imported water purchased from MWD] t Cities & Water Districts that purchase from both MWDOC and OCWD: Buena Park Fountain Valley Garden Grove Huntington Beach La Palma Seal Beach Tustin Orange Westminster t City of Newport Beach Water Co Golden State Water Company Irvine Ranch Water District Mesa Consolidated Water District Serrano Water District Yorba Linda Water District East Orange County Water District Orange County Water District [manages underground basin water] Y V Cities which purchase from both MWD and Orange County Water District: Anaheim Fullerton Santa Ana 3 Reliability of future water supplies • Recent events have generated major concerns about Orange County's ability to meet the demand for water in the years ahead. Some of the challenges that now face Orange County and other recipients of MWD imported water are: • A recent federal court ruling that cut water supplies from the state's two largest water delivery systems by up to one-third to protect the endangered smelt • A prolonged drought in the West which has reduced the mountain snow pack, a critical natural supply of water, and has reduced water levels in the Colorado River • Extremely low water reserves statewide Aging levees in the Sacramento-San Joaquin Delta, at risk of a natural disaster, could cripple the water deliveries for an extended period of time No significant improvements in the statewide water system over the past 30 years despite California's rapidly growing population These problems cannot be easily resolved. Solutions will be costly and possibly politically charged. Reducing water demand through conservation remains the most cost-effective and timely solution to remedy the looming shortage. Conservation is not a new concept. It has been promoted for years and has served as a quick resolution in the past when temporary shortages occurred. The 10% challenge In response to this impending shortage, Orange County water agencies are asking the public to voluntarily conserve. The regional goal for voluntary conservation is 10%. The Grand Jury found that many Orange County water agencies structure water bills to show customers current usage compared to usage during the same period the previous year. This is intended to help customers measure the difference in their current and past water use, but it does not measure their water-use efficiency. Nor does it tell them how much water they should be using commensurate with their household and landscape needs. Why focus on residential water use? All categories of water users are called upon to conserve. But the primary focus of this report is on residential customers. Why? Because, as the following data' shows, single- family and multi-family residences are collectively the largest water consumers: • Single-family residential 49% • Multi-family residential 14% • Commercial, industrial and institutional 29% • Agricultural 1% • Recycles & non-domestic 7% ' Percentage extrapolated from Orange County Water Agencies Water Rate$ Water Systems Operations and Financial Information 2006 - Table 5, MDOC, 2006 0 Based on responses to a Grand Jury questionnaire sent to all of the Orange County water agencies, more than half of this residential water is used outdoors. And it is estimated that half of outdoor water usage is wasted. Thus, landscape irrigation presents the greatest opportunity for potential water savings. The figures shown in the aforementioned countywide data, however, do not reflect the vast differences in urban design found in Orange County. Historically, central and northern county communities were developed with single-family homes on large lots. In newer developments, especially in South County, the emphasis is on communities with small lots with large greenbelt areas and wide, landscaped boulevards and slopes. Water used to irrigate greenbelts owned by homeowners associations is generally quantified in the "multi- family residential" category. City-owned and city-maintained landscaping along boulevards is included in "the commercial, industrial and institutional category." Conservation history in Orange County A memorandum of understanding2 (MOU), developed in 1991 by the California Urban Water Conservation Council, includes 14 recommended cost-effective best management practices (BMP) for advancing the efficient use of water. They are: 1. Residential water surveys 2. Residential plumbing retrofit 3. System water audits, leak detection and repair 4. Metering with commodity rates • 5. Large landscape conservation programs 6. High-efficiency washing machine rebate programs 7. Public information programs 8. School education programs 9. Commercial, institutional and industrial programs 10. Wholesale agency assistance programs 11. Conservation pricing, or tiered pricing 12. Conservation coordinator 13. Water waste prohibition 14. Residential ultra low-flow toilet replacement programs The Municipal Water District of Orange County (MWDOC) signed the MOU in 1991 and agreed to develop, obtain funding for and implement regional BMP programs on behalf of all retail water agencies in Orange County. Only half of these agencies currently are signatories to the MOU but, according to MWDOC, all are actively implementing BMP- based programs. The public is familiar with many of these practices. Since these programs have been in effect, water usage has been reduced substantially through conservation. Water agencies agree that improved plumbing fixtures and water-efficient appliances have contributed to z "Memorandum of Understanding Regarding Urban Water Conservation in California", California Urban Water Conservation Council, 1991 40 most of this success. Free exchanges and rebates funded by the water agencies accelerated the process. Based on a Grand Jury survey of water bills and responses to a questionnaire, there is one best management practice that has not been effectively implemented but one that could be a significant factor toward promoting water reduction. That practice is conservation pricing. Conservation pricing or tiered pricing Conservation pricing, also referred to as tiered pricing, promotes conservation by establishing a base allocation, or water budget, with several levels of pricing for amounts used above that allotment. Each tier is priced at a more expensive rate than the one below, sometimes doubling in cost to encourage water conservation. Tiered pricing has been implemented by 19 of the 30 Orange County retail water agencies. However, the practice varies widely from agency to agency. The effectiveness of this strategy may be undermined by the fact that the cost of water is relatively inexpensive. In Orange County, water costs consumers between $0.0016 and $0.0059 a gallon depending on the water agency and the amount of water consumed. The retail water agencies sell water in units of 100 cubic feet, equivalent to 748 gallons. Some agencies sell water on a flat-rate basis, charging from $1.30 to $2.85 per 100 cubic feet or $0.0017 to $0.0038 per gallon. Agencies using tiered pricing begin their base-level pricing from $0.49 to $2.27 per 100 cubic feet or $0.0007 to $0.0030 per gallon. In most cases, the increases in each tier are relatively minor and may have little impact or effect on a consumer who happens to be more focused on the rising cost of gasoline and food. Besides the fact that water is inexpensive, another factor that could contribute to consumer indifference to tiered pricing is that the base-level allotments established by some agencies, as well as succeeding tiers, may have little relevance to actual need or usage. Tiered pricing must be based on a fair and reasonable water budget or allotment and a fair and reasonable rate for that first tier. Higher tiers should then be priced at a sufficiently increased rate to get customer attention. There is precedent that supports the belief that this strategy has worked. Water bills issued by the Irvine Ranch Water District, which implemented tiered pricing in 1991, label each tier ranging from "low volume" to "conservation," "inefficient," "excessive" and "wasteful." Each tier essentially doubles in price, penalizing overuse. This projects a very clear picture to the consumer. For tiered pricing to have the intended impact, it appears that the tiers must be clearly defined on the water bill. Restructuring rates is not a simple matter. But if the intent of this best management practice is to be met, an effective and equitable tiered-pricing structure must be implemented by all Orange County water agencies. It must be done in a manner that would preclude the necessity for raising rates to cover operating costs when consumers do reduce consumption. Rate increases resulting from reduced demand due to hard-won conservation efforts would only undermine public commitment to conservation. 0 • Establishing a budget/allocation For residential customers, the process starts with water agencies establishing a base allocation for the average household within their boundaries. A determination must be made as to the adequate amount of water needed per person for indoor use for all customers and for outdoor use by single-family homes. Indoor water use The average indoor water use in Orange County is unknown since it is not metered separately. However, the following table shows commonly-accepted estimates of average per person indoor water use in the United States, for both non-conserving and conserving households. Type of Use Toilets Washing Machines Showers Faucets Leaks Other Bath Dishwasher Total Daily Use per person in Daily Use per person in Gallons/day Non-Conserving Gallons/day Conserving 18.5 I 8.2 15.0 I 10.0 11.6 8.8 10.9 I 10.8 9.5 I 4.0 1.6 I 1.6 1.2 I 1.2 1.0 I 0.7 69.3 I 45.3 From the "Handbook of Water Use and Conservation" by Amy Vickers Thus, 70 gallons per day per person appears to be an adequate allotment for average daily indoor use for meeting necessary health requirements. The Irvine Ranch Water District and the City of San Juan Capistrano both provide allotments to their customers using slightly different formulas to determine indoor water allowances. The Irvine Ranch Water District allows 75 gallons per day per person for four occupants per single family resident. The City of San Juan Capistrano allocates nine units per month (6,732 gallons) per single family resident, an amount that is equivalent to 70 gallons per day per person for 3.2 occupants. Outdoor water use According to information derived from interviews and responses to its questionnaire, the Grand Jury learned that almost all water used outdoors is for landscaping. Half of that amount is wasted, with residents watering too much and too often. 0 Calculating the appropriate amount of watering (frequency and amount) for landscaping is a daunting task for most residents. By default, the burden of establishing a fair and reasonable allocation for outdoor landscape watering falls upon the water agencies if they are sincerely committed to imrroving water conservation. The calculation for appropriate watering is weather-based as it takes into account weather conditions, plant species, the size of the landscape area and irrigation efficiencies. Soil texture is another important parameter that is necessary for determination of frequency of watering. The Grand Jury was impressed with the separate approaches taken by two Orange County water agencies for determining the landscape area. The City of San Juan Capistrano estimates a landscaped area of 3,636 square feet for lot sizes less than 7,000 square feet. For those over 7,000 square feet, the square footage of the house is doubled and subtracted from the lot size. The Irvine Ranch Water District estimates a landscaped area of 1,300 square feet for every single-family home but allows variances for those who show that their landscape area is larger. A calculation (based on actual weather data and plant needs) is then made for how much water that average landscaped area requires. Regardless of the method used to determine an outdoor allotment for landscaping, the water agencies must be able to demonstrate that their method is fair and equitable. Resources currently available for conservation The objective in assigning allocations and implementing tiered pricing with significantly increased rates is not to punish customers, nor to earn additional revenue, but to encourage those who are wasteful to conserve. Water agencies should all be assisting customers with detecting and correcting the reasons for excessive use of water. Personnel at the Irvine Ranch Water District indicated that they respond personally to customer requests for help and will assist them in correcting the problem and will often refund the cost of the penalty after the problem is corrected. The following devices and resources can assist or inform motivated gardeners about new irrigation techniques: • Smart timers - automatically adjust watering times for different weather, soil and landscape conditions • Watering index - provides an index for those having timers equipped with a "water budget adjustment"a • Water calculators - calculates the frequency and duration for watering based on the type of soil, plants, watering system and its flow rates for residents in Southern California. • Innovations in irrigation systems - including rotating nozzles for pop-up spray heads and a new system for watering turf grass using plastic pipes with drip emitters, are proving to be much more efficient than conventional sprinklers • Xeriscape landscaping - drought-tolerant vegetation 3 Water budgeting using evapotranspiration data from CIMIS (California Irrigation Management Information System) and crop coefficients from WUCOLS (Water Use Classification of Landscape Species). 4 Bewaterwise.com. sponsored by water agencies including those in Orange County s ibid 0 • Synthetic turf- replaces water-guzzling turf with "realistic" manufactured grass Although these devices are helpful, some knowledge and skill are required to take full advantage of them. Smart timers and water calculators also require knowledge of the types of soil and plants involved. To maximize use of the aforementioned resources, additional information and support must be provided. Selling conservation Unfortunately, water agencies cannot stand by passively until residents motivate themselves to conserve water. Just as those agencies must offer a stick in the form of tiered pricing, they must offer a carrot to motivate residents to pay more attention to their outdoor watering practices. Water agencies certainly promote conservation. The question is, is this enough? The Grand Jury concluded that they could do more through: • Public education. While some local water districts provide classes on landscape watering principles and practices, they indicate that some of these classes are poorly attended. The classes might draw additional interest if they offer workshops on determining soil types, using water calculators and demonstrating new devices like smart timers. • Promotion. Some water agencies send out mailers with water bills to promote classes • or encourage efficient watering techniques. Press releases may generate brief announcements of the classes. But effective promotion may require teaming up with other agencies as well as vendors to provide the resources to attract greater attendance at classes or garden demonstrations. • Rebates. Water agencies should continue to offer more rebates for water-saving devices, such as more efficient landscape sprinklers and controllers outdoors as well as more efficient indoor appliances and plumbing fixtures. • Personal assistance. Water agencies should establish a telephone help line staffed by a person (not a computer) to answer their customers' water-related questions. They should also make available a countywide soils map that would allow the customers to approximate soil textures. CONCLUSION There is still room for more water conservation, especially in outdoor landscape irrigation. Water agencies need to help the public better understand the principles and new technologies to make improvements in landscape irrigation. Customers need encouragement and assistance. Water agencies must provide clear targets for the customer and implement tiered pricing in support of the targets. 0 • • • FINDINGS In accordance with California Penal Code sections 933 and 933.05, each finding will be responded to by the government entity to which it is addressed. The responses are to be submitted to the Presiding Judge of the Superior Court. The 2007-2008 Orange County Grand Jury has arrived at the following findings: F-1 Opportunities for further water conservation exist especially with regard to landscape watering. F-2 Conservation pricing, or tiered pricing, with a fair and reasonable base allotment, followed by tiers of higher rates, can be an effective tool to motivate further conservation. Response to finding F-1 is required from MWDOC Responses to findings F-1 and F-2 are required from the following Water Districts and City Water Departments: East Orange County Water District El Toro Water District Emerald Bay Service District Irvine Ranch Water District Laguna Beach County Water District Mesa Consolidated Water District Moulton Niguel Water District Santa Margarita Water District Serrano Water District South Coast Water District Trabuco Canyon Water District Yorba Linda Water District City of Anaheim City of Brea City of Buena Park City of Fountain Valley City of Fullerton City of Garden Grove City of Huntington Beach City of La Habra City of La Palma City of Newport Beach City of Orange City of San Clemente City of San Juan Capistrano City of Santa Ana City of Seal Beach City of Tustin City of Westminster RECOMMENDATIONS In accordance with California Penal Code sections 933 and 933.05, each recommendation will be responded to by the government entity to which it is addressed. The responses are to be submitted to the Presiding Judge of the Superior Court. Based on the findings of this report, the 2007-2008 Orange County Grand Jury makes the following recommendations: R-1 Continue to emphasize methods and availability of tools that assist the customers in understanding weather-based irrigation practices by: 10 • Providing a hotline for assisting the public with landscape irrigation • information • Providing a countywide soil texture map on the MWDOC website • Developing an Orange County specific water calculator on the MWDOC website R-2a Develop monthly water allocations for each customer based on both of the following: • A per person indoor water allotment that satisfies basic needs • An outdoor water allotment that applies the weather-based method over the customers' landscaped area R-2b Develop a tiered-pricing structure with the first tier based on individual customer water allocation priced at a commodity rate, and subsequent tiers priced significantly higher to encourage conservation. The pricing shall be structured in a manner that will preclude the necessity of price increases as a result of reduced water use. R-2c Modify water bills to clearly explain customer monthly allotment and monthly water usage. Response to recommendation R-1 is required from the Municipal Water District of Orange County. • Responses to recommendations R-1, R-2a, R-2b, and R-2c are required from following Water Districts and City Water Departments: East Orange County Water District El Toro Water District Emerald Bay Service District Irvine Ranch Water District Laguna Beach County Water District Mesa Consolidated Water District Moulton Niguel Water District Santa Margarita Water District Serrano Water District South Coast Water District Trabuco Canyon Water District Yorba Linda Water District City of Anaheim City of Brea City of Buena Park City of Fountain Valley City of Fullerton City of Garden Grove City of Huntington Beach City of La Habra City of La Palma City of Newport Beach City of Orange City of San Clemente City of San Juan Capistrano City of Santa Ana City of Seal Beach City of Tustin City of Westminster 0 REQUIRED RESPONSES: • The California Penal Code specifies the required permissible responses to the findings and recommendations contained in this report. The specific sections are quoted below: §933.05 (a) For purposes of subdivision (b) of Section 933, as to each grand jury finding, the responding person or entity shall indicate one of the following: (1) The respondent agrees with the finding. (2) The respondent disagrees wholly or partially with the finding, in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons therefore. (b) For purposes of subdivision (b) of Section 933, as to each grand jury recommendation, the responding person or entity shall report one of the following actions: (1) The recommendation has been implemented, with a summary regarding the implemented action. (2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation. (3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of • publication of the grand jury report. (4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefore. • 12 DOCUMENTATION • "Orange County Water Agencies Water Rate$: Water System Operations and Financial Information", Orange County Water Association and Municipal Water District of Orange County, 2006 "The Residential Runoff Reduction Study", Municipal Water District of Orange County and Irvine Ranch Water District, July 2006 "2005 Urban Water Management Plan", Municipal Water District of Orange County, 2005 "A Guide to Estimating Irrigation Water Needs of Landscape Plantings in California: The Landscape Coefficient Method", University of California Cooperative Extension, California Department of Water Resources, 2000 "Landscape Management for Water Savings: How to Profit from a Water Efficient Future", Municipal Water District of Orange County, 1998 Stan Sprague, "Orange County's Water Story: Regional Water Issues and the Import Supply", March 2003 Tom Ash, "Landscape Management for Water Savings", 1998 "Smart Water: A Comparative Study of Urban Water Use Efficiency Across the Southwest" Western Resource Advocates "Reclamation: Managing Water in the West - Weather Based Technologies for Residential Irrigation Scheduling", Technical Review Report. Water District of Orange County, 2004 "Landscape Water Management Principles", The Irrigation Training and Research Center, 1997 "Residential Weather-Based Irrigation Scheduling: Evidence from the Irvine `ET Controller' Study", June 2006 • 13 A 2008 OC GRAND JURY REPORT WATER BUDGETS, NOT WATER RATIONING / FINDINGS F-1 Opportunities for further water conservation exist especially with regard to landscape watering. F-2 Conservation pricing, or tiered pricing, with a fair and reasonable base allotment, followed by tiers of higher rates, can be an effective tool to motivate further conservation. RECOMMENDATIONS R-1 Continue to emphasize methods and availability of tools that assist the customers in understanding weather-based irrigation practices by: • Providing a hotline for assisting the public with landscape irrigation information • Providing a countywide soil texture map on the MWDOC website • Developing an Orange County specific water calculator on the MWDOC website R-2a Develop monthly water allocations for each customer based on both of the following: A per person indoor water allotment that satisfies basic needs An outdoor water allotment that applies the weather-based method over the customers' landscaped area R-2b Develop a tiered-pricing structure with the first tier based on individual customer water allocation priced at a commodity rate, and subsequent tiers priced significantly higher to encourage conservation. The pricing shall be structured in a manner that will preclude the necessity of price increases as a result of reduced water use. R-2c Modify water bills to clearly explain customer monthly allotment and monthly water usage. REOUIRED RESPONSES: The following are the only responses that will satisfy the Grand Jury: For Findings: (1) The respondent agrees with the finding. (2) The respondent disagrees wholly or partially with the finding, in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons therefore. For Recommendations: (1) The recommendation has been implemented, with a summary regarding the implemented action. (2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation. (3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report. (4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefore. 2 DRAFT 6-25-08 Meeting Notes from Workgroup on the Grand Jury Report Water Budgets, Not Rationing June 18, 2008 Attendance: Bob Hill - ETWD Fred Adjarian - Tustin Ismile Noorbaksh - La Palma Lee Pearl - Mesa Consolidated Renae Hinchey, Chris Regan - Laguna Beach CWD Thom Coughran - Santa Ana - Brea George Murdoch - Newport Beach Fiona Sanchez - IRWD Francie Kennedy - San Juan Capistrano Karl Seckel, Steve Hedges - MWDOC Proposition 218 Issues Karl Seckel requested input on the notes from the first meeting. Bob Hill and Karl Seckel provided comments on the OCWA Luncheon Presentation on Prop 218 Water Revenue Nexus issues that had just taken place: o The two attorneys on the OCWA panel discussed various aspects of Proposition 218 where it relates to tiered rate structures. o Probably an over-simplification, but they seemed most comfortable in supporting the concept of the progressive tiers being characterized as "penalties" to deter over use of water or as "regulatory fees" to implement water conservation or natural treatment of runoff required due to habits of overwatering. They seemed to be saying that developing a specific nexus for inclining blocks where the blocks are tied to more expensive costs of water (say under a MET allocation program) or due to the cost of outreach and water conservation programs for higher water using customers may be more problematic to develop and defend. If you do take the latter route, they advised you need to be able to demonstrate that higher water using customers will actually cause you to incur higher costs. Once you do this, it is perfectly acceptable to pass the higher costs on to the higher water users. o Other things they mentioned included: Estimates of costs are ok when developing rate structures and tiers and things can change after adoption of budgets. One technique they discussed is to advertise on your Prop 218 notice that rates could go up to "X" amount, but you can actually set the rates lower, depending on actual circumstances, and then increase them up to "X" if you get into higher water costs caused by shortage conditions. This could especially be important going into 2009. The measure of compliance with Prop 218 is at the time of adoption of the rates. DRAFT 6-25-08 - As part of the rate adoption process, you should have an appeal process built in. The IRWD legislation, AB-2882, is a good attempt to statutorily fill in gaps in the Prop 218 process. But they noted that statutes cannot override constitutional issues. If there are any questions, you need to check with your legal counsel. Presentation by San Juan Capistrano IRWD and San Juan Capistrano both began implementation of their rate structures in 1991 and they have many similarities and some differences. Francie Kennedy from San Juan Capistrano was present to discuss their approach on budget based tiered rate structures: o They implemented their rate structure beginning in 1991 and did it without a lot of outside help. Francie advised that you can begin with a simple process and update it as you go along. When they began their system, they used the standard curves for monthly Evapotranspiration (ET); in recent times, the irrigation portion of the budget is based on actual ET data based on downloads. o They received information from the Assessor's Office on the size of parcels in their service area and they found a distinct break at 7,000 square feet. Anything smaller than 7,000 square feet are considered standard parcels and received an allocation based on 9 ccf of interior usage and an outdoor allocation based on an assumed irrigated area of 3,636 square feet. For larger lots, the same interior allocation of 9 ccf was used but the outdoor allocation is based on the lot size less two times the house footprint. o For irrigation accounts, the San Juan system requires measurement of the irrigated area to develop the budget amounts. o When they started, one of their goals was to make it easy for the average customer to live within the budget system, but to discourage wasteful practices. Currently, about 90% of the customers stay within the Tier 1 amount. When making assumptions, they generally try to err on the side of the customer. When they discover leaks that the customer was not aware of, they generally allow the customer to pay for the water at the Tier 1 rate, rather than at the higher tier. o San Juan has set their tiers so that customers are paying the full unsubsidized rate of the groundwater desalter costs in Tier 2 and the full cost of ocean desalination water at the Tier 3 rate. o When starting out, the staff must have the belief that the system will work. o San Juan Capistrano uses a simple off the shelf billing system. o Customers can request an evaluation and adjustment of their allocation if square footage or household size differs from information in the billing system. o In times of drought, San Juan has the ability to lower the indoor and outdoor allocations and to tighten up the tiers. The current allocation amount is set for a landscape of 100% of needs for cool season turfgrass, and averages about 75% of ET year-round. This ET factor could be reduced to 70% or below, reflecting a more California Friendly mixture of plant material. 2 DRAFT 6-25-08 Roundtable Discussion Agencies discussed the next steps in the process: o As a reminder, responses to the Grand Jury report can take only one of the following four options: (1) The recommendation has been implemented, with a summary regarding the implemented action. (2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation. (3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report. (4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefore. o A standard response to the Grand Jury for a #3 type of response might look something like: Our agency wishes to thank the Grand Jury for its report. We believe that follow-up on the recommendations will require additional time for full consideration. We believe our agency already does a very good job at implementing water conservation practices with our customers and we provide them support via Furthermore, since publication of your report, we have investigated the budget based tiered rate structures implemented by the City of San Juan Capistrano and Irvine Ranch Water District. Based on an examination of those structures and even though our current rate structure is compliant with the requirements of BMP #11, we would like to further examine the costs and anticipated water savings from implementation of a budget based tiered rate structure in our service area. On the cost side of things, we would like to document the staffing needs and costs to move from a bi-monthly billing to a monthly billing and also consider the hardware and software costs and modifications needed to accommodate such a change in our customer billing system and the staffing costs to respond to customer inquiries, variance requests and appeals. We would also like time to study the potential water savings from our various classes of customers from implementation of such a rate structure, based on a review of savings estimates that have been published. Likely, we will also need to bring consulting expertise on board to assist us in developing and testing optional rate structures and the make up of the tiers. Legal counsel time will also be needed to ensure we comply with proper rate development and noticing requirements. DRAFT 6-25-08 We believe we will be in a position in the next six months to complete these activities and report back to you prior to November 22, 2008 with additional input regarding the direction we anticipate taking. o Agencies requested MWDOC assistance in the following areas: - Develop a proposal to MET to see if there isn't some way we can get funding to help with implementation of these structures in Orange County. Ideas for grants from MET included for evaluation of billing hardware and software, development of information on parcel data and house footprint sizes, and just plain ole assistance to agencies in evaluating how best to implement and document the anticipated savings. - Research on the actual anticipated savings in the various customer classes. IRWD has a study that is nearing completion. The savings they have documented is running 8-10% among residential customers, 20 - 25% for dedicated irrigation uses and about 5% for businesses and commercial users. IRWD will make the study available when it is completed. The documented savings is over and above all other conservation practices they have implemented. - MWDOC will have to develop its regional response as requested by the Grand Jury. The retail agencies requested an opportunity to review and comment on MWDOC's response before it is completed. The next steps in this process are to circulate this set of notes for comment and then to compile all of the information reviewed and take it to the MWDOC Client Agency Manager's meeting on June 26. Paul Jones will be present to discuss implementation of their rate structure and to clarify any issues they have encountered over the years. Karl Seckel thanked the group for their help and assistance and noted that this group may have a follow-up responsibility as assigned by the Manager's Group. Karl also thanked Fiona Sanchez and Francie Kennedy for sharing their approaches with the group. It was very helpful to hear that implementation in those two agencies went as smoothly as it did. 4 p:WIoclccmmyy (rename & re-save a worksheet for each Cycle Billed) L E- ~ Run: 6/18/2008 CAPISTRANO VALLEY WATER DISTRICT PW: cvwd OUTDOOR ALLOCATION CALCULATION FOR SAN JUAN C, jPI$TRANO CYCLE: 1 2.65 N I R -inches PREVIOUS READING DATE. 3/4/2008 3.44 1Etc - inches CURRENT READING DATE: 4/3/2008 77%IAJlocation as Percent of ET DAYS IN BILLING PERIOD: 30 Input FroTCity Weather Station $,13illii2gq Schoule Ladl is to `Move U p weather info 1 day is "Ctrl + u Julian Date BILLING MONTH: Regular Lot - Outdoor Allocation LaTe Lot &^Im~]c . -Outdoor Allocation 2, # Sfationl Max Day Date days Day Temp F # (1) 63 Mon' 3/3/2008 Last Dav used for Prior Bill 64 Tue 3/4/2008 1 = 65 Wed 3/5!2008 2 ' 66 Thu 3/6/2008 3 67 Fri 3/712008 4 68 Sat 3/8/2008 5 69 Sun 3/9/2008 6 70 Mon 3/10/2008 7 71 Tue 3/11/2008 8 72 Wed 3/12/2008 9. 73 Thu 3/13/2008 t 10 e" I 74 Fri 3/142008 11 "j 75 Sat 3/15/2008 12 76 Sun 3/1612008 13 77 Mon 3117/2008 14 78 Tue 3/18/2008 151 79 Wed 3/1912008 16 80 Thu 3/2012008 17 81 Fri 3121 /2008 18 82 Sat 3/22/2008 19 83 Sun 3/23/2008 20 84 Mon 3124/2008 21 85 Tue 3/25/2008 22 86 Wed 312612008 23 87 Thu 3/27/2008 24 88 Fri 3/28/2008 25 89 Sat 3!29/2008 26 : 90 Sun 3/30/2008 271, 91 Mon 3/31/2008 28 92 Tue 4/1/2008 29 93 Wed 4/222008 30, #VALUE! n/a #VALUE! n/a i #VALUE! n/a #VALUE! n/a #VALUE! ####i# n/a Totals/Avg 65 Fib U.11 66 70 0.13 57 75 0.15 68 71 014 69 80 0.16 70 79 0.17 71 78 0.15 72 74 0-12 73 70 0.13 74 63 0.08 75 59 0.11 76 62 0.14 T7 68 0.16 78 70 0-09 79 68 0.07 80 66 0.06 81 78 0.10 82 82 0.12. 83 86 0.19 84 82 0.15 85 12 0.10 86 71 0.09 37 68 0.10 88 66 0.09 89 65 0.08 90 60 0-06 91 63 0.11 0., "I n n.t 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 75% 100% 100% 75% ~ 100% 104° 100% % 100% 6~ CU ea - -14 'BY 77%T 1 0.11 0.08 0.10 0.11 0.11 0.12 0.13 0.11 0.09 0.10 0.06 0.08 0.11 0.12 0.07 0.05 0.05 0.08 0.09 0.14 0.11 0.08 0.07 0.08 0.07 0.06 0.05 0.08 0.04 0.10 2.65 1) Daily high temperatures. (From SJC) Info only, not used directly in allocation formula. Readings at 3 pm+- 2) Reference evapotranspiration (ETo) based on tall fescue grass. Calculated from an empirical formula that uses net radiation, air temperature, wind speed, and vapor pressure. The actual evapotranspiration rate (ETo) is used as reported by the City of San Juan Capistrano weather station. (riow eA vm S 3) Crop coefficient (Kc) relates reference ETo to turfgrass (cool season) ETo. (Univ. of Cal. study) The Kc varies by month based on plant needs. 3a) Management coefficient relates to the normal time it takes to respond to weather changes. (10% Increase In the Allocation is provided in Fail (Sep, Oct, Nov)) 4) Potential evapotraspiration (ETp) equals ETa multiplied by the monthly Kc. 6) Rainfall from the City of San Juan Capistrano Weather Station. 6) Effective monthly rain (ER) is the lesser of the ETp or 30% of the rain. (considered usable for irrigation) 7) Net irrigation requirement equals ETp minus ER. 8) Allocation for Cycle - Sum of daily NIR converted to ccf per 1000 sq ft. - Input item for Billing System. Days include the last read date and exclude the current read date, since ETa readings are not avail. ET is not adjusted for these offsetting factors: crop mix (mgmt inefficiencies -added 7/97) equip. inefficiencies. + 0.11 0.08 0.10 0.11 0.11 0.12 0.13 0.11 0.09 0.10 0.06 0.08 0.11 0.12 0.07. 0.05 0.05 0.08 0.09 0.14 0.11 0.08 0.07 0.08 0.07 0.06 0.05 0.08 0.04 0.10 0.092 0.067 0.083 0.092 0.092 0.100 0.108 0.092 0.075 0.083 0.050 0.067 0.092 0.100 0.058 0.042 0.042 0.067 0.075 0.117 0.092 0.067 0.058 0.067 0.058 0.050 0.042 0.067 0.033 0.083 2.65 =Zf inches % % inches inches inches inches ccf /M sq ft (2) (3) (3a) (4) (5) (6) (7) (8) DRAFT 6-18-08 Meeting Notes from Workgroup on the Grand Jury Report Water Budgets, Not Rationing June 12, 2008 Attendance: Bob Hill - ETWD Fred Adjarian - Tustin Ismile Noorbaksh - La Palma Kathleen Hedges, Jack Foley - MNWD Lee Pearl - Mesa Consolidated Renae Hinchey - Laguna Beach CWD Ray Burk - Santa Ana Ron Krause - Brea George Murdoch - Newport Beach Fiona Sanchez - IRWD Karl Seckel, Steve Hedges, Joe Berg - MWDOC Roundtable Discussion We began with a general discussion to find out where everybody was coming from: o La Palma is not in favor of tiered rates because they already have a conservation ordinance that requires water conservation efforts by their constituents. There may be opposition to tiered rates from the residents. o Mesa has a "flat rate" instead of tiers and believes that there may be opposition from the Board to tiered rates. Mesa is highly committed to water conservation. o ETWD has a "flat rate" and is already in compliance with BMP #11, which requires that 70% of water rate revenue be generated via the commodity portion. o MNWD believes the tiered budget based system can be viewed as punitive and was wondering what can be done to implement a system based on rewards and incentives to get the conservation needed. o Newport Beach is already working on a feasibility study to develop a tiered water rate system. Issues they will have to deal with is major swings in demands due to tourism, beach locations with very limited landscaping, inland areas with large landscaped areas, the "cost" of having to deal with an allocation based system and responding to customer questions and an existing municipal code that already provides for various levels of cutbacks. o Several agencies indicated that they believed it would be difficult to implement budget based tiered rates given existing staffing and funding levels because of the intricacies of developing and implementing the system. IRWD indicated that people may be surprised at how simple it can be to implement the system. There was also considerable discussion about the concept of "high flat rates" versus "tiered rates" that start low and then escalate. Many o Tustin indicated they are already in compliance with the BMP's. o The response to the Grand Jury must indicate why the system will or won't be implemented. DRAFT 6-18-08 o A number of agencies indicated that they would probably be using response #4 to the Grand Jury Report which says "The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefore." We discussed the apparent resistance for these agencies in moving to these rate structures and the pending presentation by IRWD promised to help inform folks of how the rate structure could be implemented without significant problems. It was also noted that without a budget based system, it becomes very difficult to provide feedback to agency consumers regarding how they are doing. Adoption of budget based rates provides feedback to consumers every month or every other month when the invoicing for water is prepared. o We talked about the enforcement ability of the Grand Jury if agencies do not feel they should follow the recommendations. We noted that they have the ability to bring about political pressure, but there are no enforcement provisions. Local agencies have the ability to disagree with the Grand Jury conclusions without penalty. It was also noted that one of the goals of this group should be to defend the current system, if agencies are not willing to go to tiered rates. We talked about the following pieces of legislation: o AB-1420 - this bill links state funding to full implementation of foundational BMP compliance (BMP's 3, 4, 7, 8, 11, 12, 13) including conservation rate structures o AB-2175 - establishes a gpcd goal for conservation o Proposition 218 - requires a nexus between the cost of service and pricing o AB-2882 - IRWD legislation that establishes a nexus between conservation pricing penalty revenue and funding of water use efficiency, recycling and the natural treatment system types of projects. IRWD Tiered Budget Based Rate Structure IRWD provided an overview of their budget based tiered rate system and how they developed and implemented it beginning in 1991. o IRWD was looking for revenue stability, customer equity and methods for funding water conservation activities when they proceeded with developing their rate structure. o They provide a standard allowance for various customer classes and then allow a variance process if customers feel they need one. o For Single Family Residences - they assume 4 people at 75 gpcd interior usage plus 1350 square feet of irrigated area. o For Townhomes, they assume 3 people at 75 gpcd interior usage plus 450 square feet of irrigated area. o For Apartments, they assume 2 people and no exterior usage. o The allowances were set in such a manner that not a lot of adjustments were required, but so that large inefficiencies are identified. o Lot size and landscaped area are highly correlated, so they used lot sizes from the Assessor's office and applied a factor to get irrigated area for 2 DRAFT 6-18-08 modeling purposes. San Juan Capistrano uses a similar rule of thumb - they take the house footprint times 2 and subtract it from the lot size to get an estimate of irrigated area. In both instances, detailed information is not needed for each customer. o Commercial and business accounts were set based on the historic use of the accounts. o For the transition into the new system, they programmed all water sales at the lowest base rate for the first 6 months. o For dedicated irrigation meters, they used interns to get area measurements. o The IRWD tiers start at a Low Volume rate for usage less than 40% of budget with the standard tier being between 40% and 100% of the budget. The tiers then jump to: ■ Inefficient= 100% to 150% (14% of IRWD customers) ■ Excessive = 150% to 200% (3% of IRWD customers) ■ Wasteful= greater than 200% of budget usage (3% of IRWD customers) ■ Total over using residential customers is 20%. ■ For landscape accounts, the tiers are tighter at 100%, 110%, 120% and greater than 120%. For each tier the rate doubles again. o Last year, IRWD generated about $5 M from water usage above the 100% tier (out of about $28M in water rate revenue). The funds will be used to reward the low volume users (less than 100% usage), for investments in the recycled system, for water conservation funding and for funding the Natural Treatment System. o The system was developed and put into place in about 6 months. A key factor in this was having in-house programming staff to work on the water billing function. For the transition period, there was a lot of customer service responsibility to help customers with the new system. There were many courtesy adjustments to help the process. IRWD used the opportunity to work with their customers during the transition process and thereafter and it continues to be a good way to keep in touch with the consumers and to give immediate feedback if water usage jumps. The next meeting will be held next Wednesday June 18 and will include discussions on implementation issues, Proposition 218 issues and to consider positions back to the Grand Jury. 3 BY PETER MAYER, WILLIAM 0 ED RED, THOMAS CHESNUTT, AND LYLE SUMMERS budgets and rate structures: Innovative management tools ater budgets-volumetric allotments of water to customers based on customer-specific characteristics and conservative resource standards-are an innovative means of improving water-use efficiency. Once thought to be impractical because of techno- logical constraints, water budgets linked with an increasing- block rate structure have been implemented successfully by more than 20 util- ities. As utilities develop advanced customer information systems and geographic information systems (GIS), these rate structures are expected to be applied more broadly. Water budget rate structures are attractive to water agencies searching for stable revenue generation, improved customer accep- tance, increased water-use efficiency, augmented affordability of nondiscre- tionary customer water consumption, and improved drought response. A growing number of utility managers are finding that water budgets offer potential benefits to water utilities and their customers in coping with increasing water scarcity and rising costs. Water budget-based rate structures are probably not for everyone. This rate structure form requires more customer-level data than traditional rate structures and may be more expensive and labor-intensive to put in place, utilities without a pressing need to encourage water conservation are not good candidates for water budgets because implementation costs might exceed any nonconservation benefits. For utilities that want to supplement water conservation efforts and send a fair and effective price signal about usage to their customers, water budgets appear to be an excellent option. The objective of this research was to examine water budgets and their potential value to North American water utilities. It also evaluated varying appli- cations of the water budget concept that have been adapted to different con- dirions. Key- issues identified include: k fWI report of this project, "Water Budgets and Rate Structures: Innovative Management Tools" (91205), will be available in summer 2008 from the.NVW:4 Bookstore (1-800.926-7337) or from awwa.org/bookstore. Reports are ee and will be available to Awwa.U subscribers by calling 303-347-6121 or mom www,awwar-.org. MAYER E? AL j PEER-REVIEWED 1 100:5 • JOURNAL AWWA I MAY 2008 117 - different practical approaches to water budget rate structures, - the benefits and challenges of these approaches, - the potential uses of water bud- gets during drought, and - important steps in the water budget implementation process. The research team used a variety of methods to obtain and analyze the information and data presented in this article. An extensive litera- rure review was conducted using bib- liographic and web-based searches. Water budget rate structure pro- grams were identified through re- searcher knowledge, web searches, conversations, and interviews with water professionals. Survey instruments were devel- oped by the research team and re- viewed by the project advisory com- mittee. The researchers conducted numerous structured interviews with water agencies that have already implemented water budgets. Partici- pating water agencies provided de- tailed information about their water budget programs, including rate schedules, memos written during the implementation process, in-house research studies, billing data analysis, customer satisfaction surveys, sample water bills, customer information pamphlets, local newspaper articles, and other pertinent information. Case studies on implemented water budget programs were developed by the research team and reviewed by agency personnel to ensure accuracy. Alrhough water budgets have been implemented by water providers in North America for nearly 20 years, until recently they were only used by a handful of utilities. As popula- tions increase and climate uncer- tainties place heightened demand and stresses on water systems, more utilities are seeking new tools for water conservation and drought response. Water budget-based rate structures are an effective tool avail- able to water suppliers to provide a meaningful price signal, reduce water waste, increase efficiency, and man- age drought response in a sensible and-in many people's view-an equitable manner. WHAT IS A WATER BUDGET? A wa*-er budget is the quantity of water that would be required by an efficient level of water use. Exactly what constitutes an "efficient level" of use, particularly as it relates to outdoor irrigation, is often a com- munity decision and must be based on public expectations as well as water supply realities. Water pro- viders tend to define water budgets in more specific terms so that their customers can easily understand how the budget (or allocation as it is often called) applies. For example, the city of Boulder. Colo., defines the con- cept for its customers as follows: "A water budget is the amount of water you are expected to need for a spe- cific month. Each customer's water budget will be different based on their water needs. Water budgets may vary monthly based on seasonal outdoor watering needs." A landscape water budget is the most common form of a water bud- get. This water budget is typically a volume of water that is calculated from two parameters: - the landscape size (usually in square feet) and - the water requirement of plants in that geographic area, which is usu- ally represented by the evapotran- spiration (ET) rate. Indoor water budgets are typically a fixed volume provided each month based on the historical use of the cus- tomer class or a calculated volume based on the anticipated needs of the customer. Indoor water budgets may vary- based on the number of people in a household, the type of manu- facturing processes used in an indus- try, and the size of a business. THE BASIS FOR WATER BUDGET-BASED RATES Water budger-based water rates- also known as individualized, goal- based, and customer-specific rates- are block rates for which the block is defined by using one or more cus- tome: characteristics. Water bud- get-based rate structures can be thought of as an increasing-block rare structure in which the block def- inition is different for each customer, based on an efficient level of water use for that customer. A diagram of a simple water budget rate structure is shown in Figure 1. Water budget-based water rates have been implemented in Califor- nia communities like Irvine Ranch Water District (IRWD), East Bay Municipal Utility District, Santa Bar- bara, Capistrano Valley, and the Los Angeles Department of Water and Power (LADWP)-ah of which are potentially facing limited water sup- plies or shortages. Field evidence mom their implemenrations provides insight into the advantages and dis- advantages of water budget-based rates. On the plus side, these rates have been considered an equitable way to share limited water supplies while preserving some amount of cus- tomer choice. Indeed, the largest strength identified with water bud- ger-based rates-by both customers and water utility staff-is their per- ceived fairness (Pekelney 8c Ches- nutt, 1997). If the basis of the water budget-based rate and the supply constraint situation are communi- cared well, then the rate is seen as an intrinsically more equitable way of charging water rates than rate struc- tures that do not include individual customer characteristics. Water uril- ities that have implemented water budget-based rate structures have developed closer working relation- ships with their customers while cop- ing with water supply constraints. Implementation of new informa- rion technologies (especially auto- maric meter reading and geospatial pa:cel measurement applications) holds the prospect of broader, less costly application of water bud- get-based rates. Many water agen- cies have already developed infor- marion systems that contain sufficient information and data for the devel- opmenr of water budgets. Modern utility billing systems that are data- 118 MAY 2008 1 JOURNAL AWWA - 100:5 ; PEE.1-REVIEWED MAY53 E' AL base-driven are often more capable and easily adapted than older billing technologies. Typical water budget rare calculations are not pa-dcularly complex and often only require the inclusion of a few additional fields and a calculation or two in a utility baling database. The disadvantages of water bud- get-based rates include potentially higher implementation costs, includ- ing a billing system that can accom- modare the rare structure and cus- tomer-level information that may not be readily available. More up-front effort to implement the rare struc- rure may be required of utility per- sonnel. Water budget-based rates are a depart re from the billing meth- ods most customer are familiar with, and customer service representatives must be prepared to handle questions and problems that may arise. Suc- cessful water budget implementation requires a level of commitment from decision-makers, staff, and citizens. Many agencies have opted to imple- ment water budgets for irrigation- only accounts to gain experience with the concept before tackling a utility- wide program. Water budgets can meet cast-of-ser- vice requirements. According to the AWWA MI Manual, "the basic premise in establishing adequate rate schedules that are equitable to dif- ferent customers is that rates should reflect the cost of providing water service" (AWWA, 2000). After rev- enue requirements have been estab- lished, costs are allocated among dif- ferent types of water users, and then rates are designed to reflect the cost of providing water service. Although the concept of cost of service is cen- tral to public utility rate-serring, most rates reflect historical pricing regimes and local political imperatives. Legal precedents require that rates be "fair and reasonable." Public utility prac- tice often uses a cost-of-service study to assess the reasonableness of rates. A water budget-based rate struc- ture is inherently no more or less cosr-based than a similar increasing- block rate srructure without a water budget component. There is little dis- pute that increasing-block rate suuc- tures can be properly designed to meet cost-of-service requiremenrs. The same is true for a water bud- get-based rate structure. The research ream could find no report or publi- cation that identified cases in which water budget rate structures failed to meet cost-of-service criteria. Given that more than 20 utilities are actively implemenring some form of these rate structures, it appears that prop- erly designed water budget-based rate structures can meet these impor- tanr criteria. Water budgets are being used across the United States. During the 1990s, water budget rate structures were only implemented by a few wa- ter agencies in California, most notably in Capistrano Valley, IRWD, and the Cray Water District. By 2007, water budget rare structures had diversified and expanded throughout California and across the United States to Utah, Nevada, Colorado, North Carolina, and Florida. The authors were able to identify 25 water providers who are using some form of a water budget for billing and infor- mational purposes (Table 1). Although still primarily a Cali- fornia and western states phenome- non, water budgets have found sup- port in a broad range of agencies from small systems like Marco Island, Fla., to the LADWP. Water budgets are no longer an exclusive "bou- tique" rare structure for select, rech- I ologically savvy providers. These rate structures have been adopred by a broad range of utilities, with each developing its own version of the water budget concept. Water budget-based rate structures, like utilities, are unique. Utilities are unique, and so are their rate struc- rares-whether water budger-based or not. The formulation of water budgets and implementation within the utility context was unio-ue for every example the authors identified. Only three of the identified warer budget utilities developed a water budget for all customer in the service area. Most of the water budget uril- ities opted to use such budgets for only terrain customer classes (such as single-family residential or dedi- cated irrigation); some only use water budgers for informational purposes, in which cases the budget is not linked to the rare structure. Single- family residential and dedicated irri- gation accounts were the most com- mon customer categories included in a water budget program. Table 2 summarizes the type of water bud- get program implemented in the iden- FIGURE 1 Water budget rate structure Higher rate 0 0 Lower rate Units Each individual water rate changes when that customer exceeds budgeted use. Source: Mayer at al. @2008 by AwwaRF. Reprinted with permission NlAY=_R -7 AL 1 P_Et•f3 VIS`NcD 1 100:5 • JOURNAL A` WA I MAY 2008 119 TABLE 1 Utilities using water budgets utility California Capistrano Valley Water Disuict City of Rohnert Park City of Santa Barbara Contra Costa Water District Eastern Municipal Water District- East Bay Municipal Utility District Irvine Ranch Water District Lake Arrowhead Monterey District Tariff= Area Otay Water District Redwood City San Clemente Santa Rosa San Diego County Mate: Authority Utah, Nevada, and Colorado Centennial Water at Sanitation Distict City of Albuquerque City of Aurora City of Boulder City of Castle Rock Las Vegas Valley Water District Salt Lake City Department of Public Utilitles Southern Nevada Water Authority North Carolina and Florida City of Morrisville Marco Island Location San Juan Capistrano Rohnert Park Santa Barbara Conga Costa Los Angeles (region) Oakland Irvine Lake Arrowhead Monterey San Diego (region Redwood City San Clemente Santa Rosa San Diego Highlands Ranch, Colo. Albuquerque, N.M. Aurora, Colo. Boulder, Colo. Castle Rock, Colo. Las Vegas, Nev. Salt Lake City, Utah Las Vegas, Nev. Morrisville, N.C. Marco Island, Fla. Town of Cary Cary, N.C. Source: Mayer et a;. 2008.' 2008 by AI,vwaRF. Reprinted with permission rifled water agencies. Table 3 pro vides details on the formulation of ' water budg°" ta at all identified agen- cies. A comparison of the rates and charges for single-family customers at selected water budget agencies is shown in Table 4. Many, but not all, agencies pro- vide a process to appeal or adjust water budgets for specific extenu- i~ acing circumstances such as large families, special medical needs, . , unaccounted-for irrigated area, or j other factors. a Landscape water budgets, Land- scape water budgets were the origi- nal basis for the formulation of these rare structures and are the founda- tion of the majority of implementa- tions examined in this article. The idea of calcularing the volume of water required to adequately irrigate a plot of land is hardly a new con- cept. Farmers and agronomists have been developing agricultural water budgets for many years using ET measurements to determine the required application depth to max- imize plant growth. In the urban contexr, water budgets have been used for years to determine irriga- tion efficiency for parks and large irrigated parcels. They have beer_ used at least since 1989 in conjunc- tion with inclining-block rate struc- tures to provide a tailored price sig- nal based on the water requirements of the landscape. Landscape water budgets are typically developed based on two fundamental factors: • landscape area and • water application requirement. The Centennial Water and Sanita- rion District in Highlands Ranch, Colo., bases its outdoor water bud- gets on these two factors. Customers' budgets are calculated on the basis of 27 in. of irrigation water applied across 45% of their measured total lot area for an entire year. The value of 27 in. was selected on the basis of the historic ET for typical landscapes in the service area. For example, a 10,000-sq-ft lot in the Centennial dis- 4ict would receive an annual outdoor water budget of 75,700 gal (10,000 sq fr x 0.45 x 27 in. _ 12 in./ft x 7.48 gal/cu ft _ 1,000 gal). The water in the annual budget is distributed through the irrigation season (April- Ocrober) on the basis of the historical ET curve in the area. There are also more complex wa- ter budget formulations that include additional factors such as effective precipitation and different landscape water requirements. In Redwood City, Calif., landscape material is taken into considerarion-100% of ET is provided for turf and 80% of ET for nonturf areas. In Santa Rosa, Calif., landscape water budgets are calculated by subtracting effective precipitation from the reference ET. This creates a measurement of net ET, and then Santa Rosa provides 100% of net ET for high-water-use landscaped area and 60% for medium-water-use landscaped area. Some agencies develop their out- door water budgets using a physical measurement of the lot size or land- scaped area taken from aerial pho- tographs or GIS mapping. Other agencies use local tax assessor records of lot size to fix their cus- tomers into water budget bins. The LADWP, for example, has fire lot size bins that customers are placed into for the creation of water bud- gets. LADWP also uses customers' zip codes to place them into one of 6-ree temperature zones that are also 120 II:.Y 2008 I JOURNAL AW NA i00:: I PEER-REVIEWED N9AYEI ET AL F used to adjust rl-ie allocation. A vari- ery of formularions is possible, and the method chosen by each agency is often determined by the availabiliry- or data and the desire to further cus- eomize the water budget to fit the characteristics of each landscape. One of the criticisms frequently leveled against landscape water bud- gets in the residential context is that they encourage profligate use by cus- tomers with large lots by providing them with enormous water budgets based on lot size. The rate structure implemented in Boulder, Colo., cack- les this issue by providing 15 gal/sq ft for the first 5,000 sq ft of landscaped area; 12 gaUsq ft for the next 9,000 sq ft; and 10 gaUsq ft for everything above 14,000 so fr. In Boulder the water requirement for low-water-use native plants is 10 gaUsq ft, so this approach is designed to discourage wall-to-wall rurf on large landscapes. With all of the rate structures exam- ined in this research, customers may use as much water as they want, bur if they exceed their budget, the price increases steeply. The calculation of ET provides another wrinkle in the formulation of landscape water budgets. Many agen- cies have chosen to use the historical average ET rare to calculate water budgets. This approach could poten- tially provide excessive water budget volumes in wet years and insufficient budget volumes in dry years when the ET rate is higher than average. Using real-time ET measurements is a way around this issue, and this is the approach used by the IRWD and the Capistrano Valley Water District. In i both cases, prevailing ET data are input into the billing system software and the ET for each customer's billing period is used to calculate their water budget for that billing cycle. Because it is standard procedure to provide customers with the volume of water t allocated to the upcoming billing cycle l on each water bill, both IRWD and Capistrano must provide an estimate of rhis value and then adjust the actual f budget based on prevailing conditions. Other agencies have shied away from this approach because of the perceived complexity of dealing with real-time weather data and the uncercainty this brings to the formulation or an annual landscape water budget. Several electronic landscape water budget calculators are available on the Internet for utilities to review and consumers to use. Typically, these calculators are not associated with a water agency rare program. Indoor water budgets. Indoor water budgets are formulated by customer class, such as single-family residen- tial, multifamily residential, and commercial. Developing indoor bud- gets for the residential sector is fairly straightforward, but the commer- cial, institutional, and industrial sec- ror poses a greater challenge. As with landscape water budgets, a variery of different approaches to develop- ing indoor budgets have been devel- oped at different water agencies. Each customer class is addressed sep- ararely here. Residential: Single family. Single- family water budgets are typically set based on the average amount used by these customers in a particular agency. Single-family indoor budgets range from 5,000 to 7,000 gal/month, depending on the agency. Only IRWD uses a daily per capita value of 75 gpcd to develop indoor water bud- gets for single-family customers. A family of four in IRWD would receive a monthly budget of approximately 9,000 gal/monrh. Residential: Multifamily. ivlulri- family water budgets are developed similarly to single-family budgets, bur on a per unit basis. Creating a water budget for multifamily customers requires the water utility to have valid information on the number of units at each multifamily property. This in- formation is often available from tax assessor records and is occasionaliv maintained by the water provider. Multifamily indoor budgets range from 4,400 to 5,000 gal/unir/month, depending on the agency. As with sin- customers, IRWD uses a daily per capita value of 75 gpcd to develop indoor water budgets for multifamily customers. Commercial, industrial, and insti- tutional (CM. The CII sector presents a greater challenge for the develop- ment of water budgets. Only a hand- ful of agencies have included CH cus- romers in their water budget race structure program. Approaches to developing CII budgets usually include relying on historical usage patterns to establish a baseline budget. The prob- lem with this approach is that it re- wards customers whose use is histor- ically inefficient with a water budget that "grandfathers" in that inefficiency. Alternative approaches include using site-specific factors such as the number of sears in a restaurant or the number TABLE 2 Summary of identified US water budget programs by affected customer class Number of Utilities All Water Budget Type of Program Implementing Utilities Identified-% complete (all/most customer accounts) Sin gle-family residential and irrigarion accounts Single-family residential accounts L-rigation accounts Golf courses lnfornational In process/pending 3 11.5 7 26.9 3 11.5 4 15.3 2 7.7 19 2 5 . 2 7.7 Source: Mayer et al. 2008. 0200810y A,,wa_V. Reorinted with permission MAYER ET AL I PEER-REVIEWED ; 1001 - JOURNAL AW`NA i MAY 2008 121 ~ti, 4, I1 TABLE 3 Water budget rate structure implementation by agency i . ; Type of Indoor Outdoor Rate I , Agency Location Program Budget Basis 1 Budget Basis Structure Program Description ' Capistrano San Juan Residential and SF/condo: i Irrigable area, 3-tier Two separate water budge*-- categories: Valley W D CaD1S=0, L-igadon 6,700 gal/ EIo rate, cop increasing- (1) for residential lots < 7,000 sq if Calif. month;.W: coefficient for block :a,*. and (2) those > 7,000 se ft (irrigable 4,500 gal/urlt/ rrr_ mss, area > 3,636 so ft). Indoor E. month ! management allotment is 9,000 cu ft/month. f M. coefficient, and Outdoor allotment is based on irrlg- s effective rainfall able area. ETo, crop coefficient for rxf grass, management coefficient, and effective G, 1 j Centennial Highlands Residential and Residential: 27 in. x lot size 4-tier, Four-block system for SF residential: '1 Wate and Ranch, irrigation 6,000 gal/ increasing- indoor budget - 6,000 gal/month, Sanitation Coic. month block rate outdoor budget - 27 in. of District irrigation/year x lot area. City of Albuqueraue, ir--igation NA Annual Irrigation 2-tier Apblles :o existing golf courses, city- Albuquerque N.M. only budget golf courses increasing- owned pares, and city-owned athletic j 37 in./year; narks block rate; Be -Ids. Exceeding water budget results 35 in./year, athletic surcharge in a 50% increase in commodity rate. ;.1 fields 45 in.iyear for excess Planting restrictions, but not waxer 1 use budgets, apply to new development. City of Aurora, Complete SF: 7,000 gal/ SF outdoor. ET x 3-block indoor budget based on most recent Aurora' Colo. (all customers) month; others: 3,000-sa-ft irrigated strucrure winter quarter avenge. Outdoor bud- 70% of histor-c area; appeals get based on 70% of 2000-01 con- avenge process available sumption. New accounts receive 7,000 for larger lots gal/month indoor (3.2 people x 70 gpcd); ET x 3,000 sq ft irrigated area outdoor. City of Boulder, Complete SF: 7,000 gal/ Lot size: 15 gal/sq 5-ter, Full-]edged water budget rate Boulder Colo. (all customers) month; MF: ft for first 5,000 increasing- stnrcture starting in 2007. aJ 5,ooo gaVrnonth sq ft of landscape block rate : CII: historical area, 12 gal/sq ft average for next 9,000 sq ft, 10 gal/sq ft for everything above 1=,000 sq ft City of Castle Castle Rock, In process of in orocess of imple- The cir,,7 of Castle Rock is considering the use of water budgets as par of its Rock Colo. implementing rates menting Water Resources s Plan r5 t Str t n (adopted o in 2005 i a eiio decrease water consumption by 18% ' over the next 25 years. City of Morrisville, SF residential 4-tier, Four-tier rate system for SF residents Morrisville N.C. and irrigation increasing- The lowest block is for water use up block rate to 5,000 gal (S3.75/1,000 gal) with r charges increasing gradually for the first three tiers up to 23,000 gal. The price for tier four more than dou- bles. The price for the tiers is based on an average lot size of 0.25 acres and an annual irrigation allotment of 15,000 gal. City of Rohrer, Aark, informational NA Bared on landscape N.4 Landscape water use report provyded Rohnert Calif. (irrigation only) area, ET to dedicated irrigation meter sites a Park each billing period. j City of Santa Santa Barbara, Irrigation only NA annual allotment based on irrigated 3-tier, increasing- Irrigation-only accounts receive budget based on acreage. Budget fits j, Barbara Calif, area block rate into two-tier system. Rates differ ~ based on customer class. i Coma Costa Contra Costa, Informational NA Based on landscape NA Water Calif. (irrigation area, ET District only) It - Cottonwood Douglas Residential SF: 6,000 gall 30 in. x 2,900 sq ft. 3-tier, Three-tier rate structure with single- Water and County, month; :r[F: increasing- size water budget based on 2,900 sq ft I F Sanitation Colo. 1,400 gall block rate zable area. Appeals process of im z e, f District month available for large lots. Source: Mayer et al. 2008. c200B by At Aqn. Reprinted with permission. C[I- cotnmerCal, Lndut rW, institutional, ET-evapotranspiration rate, ero-reference ET (versus net?"[), CIF-mulufamiiy, NA-not applicable, N?'A-not yet available, SF-single family, W7-water district No longer cltrea rate smacrre modifications for 2007 are not rerlet ed In this able. tFL-st ident3ed inpieraeatation of a watt.- budget rate scacttre 122 MAY 2008 j JOURNAL AWWA • 100:5 j PIER-R':V1cWc`u , NAYER ET At. TABLE 3 Water budget rate structure implementation by agency, continued Type of Agency Location Program Cucamonga San Diego, Residential valley Calif. (pilot) Water Drict Eastern Lcs Angeles, In process of Municipal Calif. Implementing WD rates Indoor Outdoor Budget Basis Budget Basis East Bay Oakland, Informational N.A. Munidpal ; Caiif. (irrigation Utility only) District (EBMUD; a rren-.) EBMUD Oakland, Irrigation NA (historic Calif. only (drought- 1988-92)+ response program) L*vine Inane, Ranch Calii. WD Rate 1 Structure I Program Description Pilot program to create water budge s for 3b0 SF a stomers In Drocess of iriplement- ing water budget ates NA Landscape water budget proLcam since 2002. inforrnaticnai only. Does not area *the water bill. Based on irrigable 5-tier, area, 80% of incresina- ET (goal was block rate to achieve a 50% cutback from previous/ baseline year). Complete (all SF/1vfF: number ET x crop customers) of residents x coefficient x 1.25 x 75 gpcd; CII: site- landscape area specific based on historical use, productivity, employees, and other factors Los Angeles Los Angeles, SF residential Deoartment Callf. of Water and Power Based on lot size and temperature zone; five bins 5-tier, increasing block rate: residential and land- scape; 4-tier, increasing block rate: CU 2-tier, seasonal rate Las Vegas Las Vegas, Golf courses NA Valley Nev. Water Dist`ict Marco Marco Island, Residential and ResidendaL 6,000 Based on lot size; 5-tier, Island Fla. irrigation gal/month five bins inaeasing- accourts block rate Monterey Monterey, Residential and Based on number Based on lot size 5-tier., District Calif. irrigation of residents and and temperature increasing Tariff accounts large animals zone; eight bins block rate Area Otay Water San Diego, Informational NA Monthly NA District Calif. (irrigation information only) or. application ate Customer-submitted landscape area and the utility verified. Historically,, 1,200 landscape accounts including public agencies and golf courses -oar. ticipated. Efficiency standard was based on 80% of ET. Rates were used to penalize. Rates were based on per- centage cutback (50%). Exceeding tar. get became expensive. Because of sys. tem constraints, time-consuming manual data entry was required. Kev example of rate structure ample. mentation. Five-tier block-rate struc- ture. Water budget based on standard indoor amount and landscape area. Tier 1 is based or lot size (five blocks), temperature zone (3) determined by zip code, and a seven-block household adjustment for households with seven or more people. Tier-1 rates are in effect from November 1 through May 31. Currently applies only to golf courses; see http://wt,rw.lvvwd.com/htnl/ws- drought-restrictions-golf.html Located in southwestern Florida and home to 15,000 permanent and 35,000 seasonal residents. On June 6, 2005; the city council adopted a three-block rate structure wWa an indoor allocation of 6,000 gallmonth and a five-tier system based or lot size for outdoor use. The water budget (equivalent con- sumption unit [ECU"]) for these areas is based on the number of people in the household, the size of the lot, an allot- ment for large animals, and & seasonal adjustment. The formula for deter- mining the ECU can be found at htm://,Nww.calamwater.com/a%-prl/ caaw/pdf/Rates MO-1 combined.pdL Had water budget program until 2000 Currently has voluntary landscape water budget program Sou.:e: V,ayer et all. 2008. 02008 by AwwaRP. RepCnted with pemtissior_ CII--commercial, industrial, institutional, ET-evapotranspiration rate, ETo-reference ET (versus net ET), bIi-r_uldfamily, NA-not applicable, NYA-not yet available, Sr-single 5 - Uy, WD-water district *No longer etrent; rate structure modifications for 2007 are not reflected in this table. tRrst identified i^.tpiemenatioa of a waver budget rate structure MAY--R E'. AL I PEER-REVIEWED j i00a - JOURNAL AWWA 1 MAY 2008 123 1 - TABLE 3 Water budget rate structure implementation by agency, continued Agency i Location Redwood Redwood City City, Calif, Type of Program Ir process (budgets being developed for residential, commercial, and irrigation accounts) Indoor Outdoor Rate i Budget Basis Budget Basis Structure I Program Description SFIMF: oer capita Based on surveyed 4- or 5-tier Transitioning to water budget rate allocation; Ch: irrigated area, structure structure as pan of conservation and case by case 10090 of ET for turf, (to be drought response programs. Water and 80% of ET decided) budgets designed to provide css- for none Ld tomers with adecuate water for rea- San San Residential and SF/condo: 6,700 Based or irrigable Clemente Clemente, irrigation gal/month; ELF; area, ETo, aoo Calif. accounts 4,500 gal/urlt/ coefficient for month turf- grass, management coefcient, and effective rainfall Santa Rosa Santa Rosa, irrigation only NA Calif. San Diego San Diego, Informational NA County Calif. Water Authority Salt Lake Salt Lake Irrigation only NA City City, Utah Department of Public Utilities Southern Las Vegas, Nevada Nev. Water Authority Golf courses NA Town- of Cary Cary, N.C: SF residential SF: 5,000 and irrigation gal/month sonable use. Charges for water use within the budgets are strictly based on the cost of service, but use for water above the budgets is charged at much higher rates (both marginal costs for new firm supplies or penalty rates) with the intention of discourag- ing waste. Seasonal, SF residents are billed monthly using a 3-tier three-tier system based on lot size. inceasing- Lot size is considered in customer block rate classification with price breaks at 7,000, 9,000, and 14,000 so ft. Allotments vary with summer and winter use Ln each tier for different lot sizes. ([ET- effective 3-tier, precipitation] x increasing- [Landscaoe.Area block rate High Use re (Land- scane Area Medium use x 0.6)] x Conversion Factor) NA Businesses participating in L•rigation controller incentive programs will be enrolled in a free water budget oro- gram that informs customers of their water use in relation to a water bud- get equal to 80% of ETo for the land- scaped area. Sites may enroll in the free water budget program even if they do not participate In the incentive programs. Water use target 2-tier, Water used within the target is billed based on irrigated increasing- per unit in tier 2; water consumption area, ET, landscape block rate exceeding the target is billed per unit coefficients, and in tier 3. During declared water short- demand levels ages, irrigation-only accounts may be called on to make "measurable reductions." Between 75 and 78 4-tier Water budgets are calculated based on in./year, depending increasing- acres irrigated. This includes all lakes on drought alert block rate and ponds within the course and status those used all or in part as an irriga- tion reservoir. Budgeted acre-feet include potable, raw, reclaimed, and recycled water. Based on landscape 4-tier, Four-tiez rate system for SF area, ET, raLalall, increasing- residents-the lowest block is for efficiency factor block rate water use up to 5,000 gal (53.28/1,000 gal)-with charges increasing fairly gradually for the first three tiers up to 23,000 gal. The price for tier 4 more than doubles. The price for the tiers is based on an average lot size of 0.25 acres and an annual irrigation allotment of 15,000 gal. Source: '.layer et al. 2008. 02008 by AwwaRF. Reprinted with permission. CH-commercial, industrial, institutional, ET-evaootar3piration rate, ETo-r_ference BT (versus net B-1), MF-muld a-:.Ay, NA-not applicable, ,YA-not yet available, SF-single family, WD-water district 'No longer curenr, rate structure, modifications for 2007 are not reflected in this table. I First identified implementation of a water budget rate structure 124 MAY 2008 1 JOURNAL AWWA - 100:5 1 PEER-REVIEWED i MAYER ET At of employees in an oirice building to develop the water budget. This approach Is impractical for many water providers who simply don't have the staff and data resources to develop water budgets in this mannez- IRWD has the most developed program of water budgets for CH cus- tomers. The IRWD CII budget pro- gram purpors to be site-specific and based on productivity, the number of employees, water efficiency practices at the site, and other factors. In prac- tice, IRWD's CII budgets are based on historical average demands that are occasionally scaled up or down as appropriate. When a new CII cus- tomer is added to the system it is given a six-month grace period from the water budget rate structure, then the next six months are used to develop a demand index (baseline budget) for the rate structure. It is anticipated that CH customers will request a budget review promptly if their usage changes, because the penalty rates are significant and take effect if the water budget is exceeded by more than 10%. It is anticipated that as water bud- get rate structures develop over time, alternative methods for creating CH water budgets will be developed. aYme~es aAe F CAPABLE UTILI T Y BILLING SYSTEM REQUIRED The implementation of water budget-based rare structures has been made possible by the advent of computerized utility- billing sys- tems that can incorporate specific customer-level information into a billing calculation. None of the wa- ter budget formulas or calculations studied by the authors was particu- larly complicared. Most modern, database-centered utility billing sys- tems can probably be adapted to incorporate water budgets without significant effort. Billing systems based on older technology may not be capable of handling water bud- gets. At least one utility billing soft- ware company has developed a module specifically for incorporat- ing water budget-based billing. The development of most water budgets examined in this study requires some customer-level data such as lot size or irrigable area. Many water utilities have invested in a GIS that provides parcel- (or cus- tomer-) level data such as lot size and pervious/impervious area measure- ments. If these parcel-level data can be linked to the customer billing sys- I®US &I W~ s PINV ~V C geNlr C;VA A rgea. ~ A~,ovnt Base „Tinny , PA~141 3o C)•00 O.OO 15•$3 ~ •QQ 20.2 fl •~Q rem, then much of the data required to implement a landscape water bud- get program is already in place, util- ities that do not have a GIS may be abie to use local tax assessor records to obtain lot size information and other data that could be used to develop water budgets, IMPLEMI ENTATI©hl COSTS VARY The costs associated with imple- menting a water budget-based rate structure vary tremendously, depend- ing on the circumstances of the water agency involved. Most water bud- get systems have been implemented "in-house" using utility staff and limited outside expertise. Often the existing customer billing system can be modified to accommodate the new rate structure. In these situa- tions, the implementation costs amount to the staff time required to develop the program. IRWD, San Juan Capistrano, Otay, and Centen- nial all implemented their water budget programs in less than 12 months with most labor coming from existing staff resources. Some water budget implementa- tions are more expensive. The city of Boulder spent nearly three years study- ing and then implementing its water budget rate structure. Boulder first spent several hundred thousand dollars on a study to investigate the feasibility of water budgets. Boulder's antiquated billing system (hardware and software) was replaced as part of the water bud- get implementation at a cost of more than 51,000,000. Boulder had intended to replace this system anyway and had budgeted money for the project before the decision was made to implement water budgets. Boulder also commis- sioned a cost-of-service study as part of the rate implementation, which increased the overall cost of the pro- ject but also helped to ensure its fair- ness to customers. WATER BUDGETS SPUR WATER SAVINGS Many of the utilities that have implemented water bud- get-based rate structures have MAYER ET AL PEER-REVIEWED 1 100:5 • JOUR IA AWW.A j MAY 2008 125 -1-1 MZWIVIW"~ TABLE 4 Comparison of rates and charges at selected utilities implementing water budgets Utility City of Boulder, Colo. Centennial Ware; and Sanitation Dis4:ct, Colo. { L-Ane Ranch Water District, Calif. Las Angeles (Cai f.) Department of Water and Power (seasonai rates) Capistrano Valley Water Dist-ict, Caiu. Town of Cary, N.C. San. Clemente, Calif. Marco Island, Fla. Fixed Charges Block t (per month) 5/1,000 S gal 8.55 1.88 12.50 2.30 Block 2 Block 3 Block 4 Block 5 3/11000 3/1,000 S/11000 3/1,000 gal gal gal gal 2.50 5100 7.50 12.50 3.25 5.20 7.80 6.75 1.00 1.22 2.42 4.87 9.73 NA 2.85-2.99 3.40-4.27 NA NA NA 11.42 3.03 3.89 6.22 NA NA 2.76 3.28 3.7: 5.33 10.83 NA 7.26 1.63 2.44 3.66 NA NA 24.11 3.02 4,53 6.04 NA NA Monterey AreaTariff 6.91 2.19 4.38 8,76 17.53 NA District, Caif. Souse: Mayer at al. 2008. 02008 by AwwaRF. Reprinted with oertnissior- NA-not applicable experienced substantial conserva- tion savings attributable to the rate structure and accompanying cus- tomer outreach programs. Analysis by IRWD staff concluded that the program increased outdoor effi- ciency by 60%. In 1992, shortly after the rate structure was imple- mented, IRWD customers irrigated approximately 3,600 acres in the service area and applied roughly 4.4 acre-ft of water per acre (52.8 in. of water applied). The typical ET requirement for turf grass in the area is 48 in./year. In 2005, IRWD customers irrigated 11,768 acres of landscape and applied only 1.7 acre- ft of water per acre (20.4 in.). This represents a 61 % reduction in the outdoor application rate since the introduction of the water budger program. -An independent evalua- tion in 1997 documented a 37% decline in water consumption as a result of IRWD's rate structure and customer outreach (Pekelney & Chesnurt, 1997). At the same time IRWD has found that the water budget rate structure has improved revenue stability-customers have adjusted to their allocations and demand has stabilized, making it easier for the utility to set rates and meet revenue requirements. The same 1997 study found that two other water budget rate struc- tures and conservation programs in California also achieved substan- tial conservation savings. San Juan Capistrano's water budget rate structure and customer outreach re- duced consumption by 35% be- tween the pre- and postprogram periods. The Otay Water District experienced a 20% decline in usage after controlling for weather (Pekel- ney 8c Chesnurt, 1997). Staff from the Centennial Water and Sanitation District documented an average 25% reduction in demand after implementing its water budget program. Even though Centennial continues to add customers at a fairly steady rate, its demand has decreased 18-31% since 2003, when the water budget-based rate structure was implemented. Sewer Rate (if applicable)- S 3.50/1,000 gal indoor 10.25/monL1 fixed : 2.2911,000 gal Residential: 9.80-13.05/month dependir_g on usage; CII: 15 for drst 7,500 gal and 1.22 for each additional 1,000 gal 3,81/1,000 gal indoor 15.42/month 4.41/1,000 gal 16.27/month (axed) 19.67/month (-fixed - 3,910/gal (6,000 gal =Ax mum) NA FAIRNESS: A KEY ISSUE One of the fundamental benefits of water budgets identified by the eater agencies studied for this pro- ject was their perceived greater "fair- ness." Most of the agency staff involved said the additional com- plexity of customer-specific water budgets was more than outweighed by the increased customer acceptance of the customized rate structure. Staff found that once customers under- stood the system, they preferred to have their rates based on the char- acteristics of their site rather than on an arbitrary or average value, Vari- ance programs have also been used to increase the accuracy of both indoor and outdoor water budgets because the water agency cannot know about every circu_*nstance of each customer. Penalty rate structures are less suc- cessful, Landscape water budget sys- tems based on a penalty rate struc- ture, such as the one implemented by Oray in 1992 and rescinded in 2000, are more problematic than the water budget-based rate structures imple- 126 MAY 2008 1 JOURNAL A`MNA • 100:5 1 FEER-RE'VIE`NE) I MAYER ET AL mented in other cities. The Oray sys- rem relied on self-reported landscape information and first issued a warning and then penalties for exceeding bud- geted allormenEs. Although this ap- proach resulted in a 20% reduction in demand among the budgeted cus- tomers, the rare penalty system proved problematic with some. The system generated numerous customer com- plaints, and the use of self-reporred landscape area data allowed some cus- tomers to inflate their area estimates and defeat the intent of the system. To be successful, water budgets must be based, as much as possible, on measured customer-level data, not self-reported information. Water budgets are also more likely to gain acceprance if they are connected with a well-designed and well-com- municared rate structure rather than a penalty structure. WATER BUDGETS AND DROUGHT RESPONSE Water budgets and water budget rate strucrures offer water utilities powerful tools for reducing demand during drought and for monitoring customer compliance with drought restrictions. Historically, drought has been considered an unpredictable natural disaster. In response to drought, water system managers have typically relied on predictable re- sponse mechanisms. Water managers have viewed droughts as low-water- supply events of unknowable and uncontrollable duration. Ln response, water utilities typically invoke some form of water use restrictions on cus- tomers that limit outdoor use, often using somewhat arbitrary baselines such as the previous year's use. The strategy for drought management has been expanded in recent years to put more emphasis or drought planning instead of mere drought response. The emphasis has changed to a more proactive, rather than reactive, mode of thought (Billingsley, 2004). Drought management plans may vary from place to place, but pro- gressive drought plans generally in- clude four main elements (Lampe er al, 2003). Each of the four elements Listed below contains subelements that must be taken into account in order to formulate a successful drought response plan: e an analysis of how water sup- plies are likely to vary for a range of droughts; O an understanding of local water requirements as well as the ability- to reduce them; • established measures for reducing demands in an equitable manner; O creation of a modern system designed for flexibility to match the conditions of the drought. A water budget rate structure is a sword that curs both ways during drought. First, it establishes an em- pirical and quantifiable limit to the more fairly apportioning demand reductions among customers -~virh different needs and among different cisromer classes. This is because the reference poinr for reductions is based on the water required by each customer in normal times. Histori- cally, when customers are asked to reduce their use from the previous year, justified complaints arise from those who are already conserving. and don't have as much room for additional curtailments. Water budget rate structures can help wdrh drought plan enforcement in the area of communications. The water budget rare structure, along with its billing system, informs a1 cus- romers on a regular basis of the required use reductions. The water Water budget-based -rate structures can be thought of as an increasing-block rate structure in which the block definition is different for each customer, based on an efficient level of water use for that customer: amount of water that a customer is entitled to use at a given price from a given tap. Second, it theoretically reserves a volume of water for the customer to use as he or she sees fit. Water budgets have the potential to protect the utility from overuse and to protect the customer from hav- ing his or her water allocated to other uses or micromanaged by the utility. In time of shortages, water budgets allow a water provider to quickly and easily identify excess use and even penalize it if necessary. By summing all water budgets, util- ities can quickly understand the amount of water likely to be required to meet customer demands in any given month. During a drough*-, water budgets have the potential to assist water utilities in bill can show customers how much water they are allocated during a droughr. This information can be de- veloped well before a drought occurs as part of the budgeting process. This is a far more reliable and effective way to implement drought-related conser- vation because it is preplanned rather than improvised. The billing system is already in place, and the bills can provide the public with the informa- tion needed to respond to the drought. Another way that water budget rare structures aid with drought plan implementation is in the enforcement of mandatory- demand curtailment. In each billing period, a simple query of the billing database can tell the utility- which customers have com- plied with drought restrictions and remained within budget and which MAYER E7 AL I PEER-REVIEWEJ j M:c - JOURNAL ALV'NA I MAY 2008 121 TABLE 5 Barriers to implementing a water budget-based rate structure Potential Barrier Questions to Answer Implications Data requirements for • Do you corse--vaton programs use water budgets Dam _ecuired ;or water budges may already exist in deveioving defe=ibie for any outdoor water-use eminency programs? locai databases or GiS. water budgets • Do you have or can you obtain access to public Consistent customea-spec0c data may be available at information (tax assessor dam) on lot size, low cost. home size, and the like? • Can parcel-level data be obtained from you GIs? Customer billing system • Can the current customer billing system Current billing system may have sufficient capability. reauiremens impiement an increasing•bloeti ate structure? • Is the current customer billing system using • Many customer btlling systems do have functional . software capable of relational database functions? capability. • Typically only a few calculated fields are reauired for water budget-based rare structure impiementaden. Compatibility of water • Does you utility have customer classes defined? Customer class definitions are required for customer budgets with cost-of- class-based rarer. service prinCpies . Does the current ate structure differentiate by Cost-of-service practices do not require cost allcca-. customer loss? ton by individual customer, only by curcmer class. • Does the current rate structure implicitly or explicitly allocate :evenue recui:emens by customer class? Pre-implementation- • Are any of you customers famil.ar with the concept • It is important to understand iritial level of customer of water budgets? customer understanding and community values. communication . What kind of customer involvement process has been • Customers may already be familiar with the concept used in the past for rate reform? of water budgets. • Are citizen representatives part of the rate structure • Public involvement in rates Is increasingly important review process? (Hoffouhr, 2000 • is the press covering the rate structure issue? Ongoing customer • Does your customer bill currently communicate • Customer bill redesign is often required. communication information about appropriate levels of water use? • What are you current starting levels for answering • This is both a customer service issue (responding to and responding to customer queries? bill comolatits) ar-d a conservation outieach issue. This table is predicated on the assumption that a need/desire for water budget-based rates has been established and that tie prospective benefits can be greater than prospective costs. Early identification of potential bariers can speed the development of cost-effective solutions and increase the effectiveness of watt; budget-based rates. Source: Mayer et al. 2008. e2008 by AtrxaRF. Reprinted with permission GIS-geographic information system have not. If the higher water rates being charged are not sufficient to elicit cooperation, then additional fines and penalties can be consid- ered. This is a highly reliable sys- tem. Unlike the "water cop" ap- proach in which customers are ticketed if they happen to be ob- served violating the drought resrric- tions, a water budget drought en- forcement program automatically identifies every customer who is not complying. This enables fair and uniform enforcement. Water enforce- ment patrols are costly and can only catch violators "in.the act" of vio- lating a watering restriction.. water budget, however, provides a regular and automatic check on which cus- tomers are in or out of compliance with drought response. BARRIERS TO IMPLEMENTATION OF WATER BUDGET-BASED BATES Water budget-based rates are probably not for all utilities. The basic idea for these rate structures has been around for nearly 20 years and interest in them has been steady. However, until recently, only a handful of agencies had ever suc- cessfully implemented a water bud- get-based rate structure. Even if a water utility is interested in imple- menting this type of rate structure, a number of real and perceived bar- riers may delay or block imple- mentation from moving forward. The extent to which these barriers pose real or imagined impediments to in, plementati-on depends greatly on the utility, the staff, the public, the water supply situation, and the local decision-makers. The exam- ples of successful implementation of water budgets described here show that implementation is pos- sible and that all of these barriers can be overcome with the right combination of know-how, exigent circumstances, and political will. Understanding potential barriers to implementation can be helDful when developing a strategy for mov- 128 MAY 2008 1 JOURNAL AWWA - 100:3 1 ?°_=R-Rc`/I P/E7 j MAYER ° AL ing forward with a new rate srruc- ture concept. Some of the perceived barriers to adopting and implementing a water budget-based rare structure include: • complexity, • data requirements, • software requirements, • lack of local precedent, • equity- concerns, • cost-04 -service concerns, • revenue requirements, and • institutional and political resistance. In some cases, these barriers can be overcome; in others they cannot. Some of the more important barri- ers are shown in Table 5. The extent to which each of these barriers may present a problem depends entirely on the situation at each local agency. The authors were nor able to identify any investor-owned utilities that have implemented water budgets. It seems likely that the regulatory environ- ment of investor-owned utilities will pose additional barriers to imple- menting water budget rate structures. A more extensive discussion of the barriers to implementing water budgets is presented in the project final report available from AwwaR.F. CONCLUSIONS Although the water budget con- cept is not new, the number of agen- cies implementing water budgets has grown from five to 25 in the past five years. In the coming years, it is likely that more water providers will move toward this type of conservation-ori- ented rate structure. This research represents the begin- ning of objective analysis into the implementation and performance of water budget-based rate structures. This research was conceived, devel- oped, and implemented in the hope of improving understanding of water budget-based rates and how they can be implemented by water utilities. RECOMMENDATIONS The recommendations from this research are divided into two cate- gories: (1) recommendations for water agencies considering water budgets; and (2) recommendations for future research. Recommendations for water utilities considering water budgets. Decide if a water budget rate structure makes sense for the organization. Water budger-based rate structures are not for everyone. This rare structure form requires more customer-level data than traditional rate structures, and, depending on the implementation cir- cumstances, may be more expensive and labor-intensive to put in place. Agencies with little or no interest in water conservation are nor good can- didares for water budgets, because this rate structure form has been shown to be an effective conserva- thorough understanding of the moti- vation and operation of the war,--r budget system by all levels of the organization will increase effecrive- ness and allow the program to be improved over time. The board and staff -must be firmly convinced chat the water budget rare program is a good idea if they are to stand behir-d it. The concept should be well-developed and adjusted until it is well-understood and supported. Changes in rate structure almost al- ways generate grumbling from some segmenrs of the customer base. With sustained comr_irment to the water budget program, leaders of the agency can successfully support and Water budget rate structures are attractive to water agencies searching for stable revenue generation, improved customer acceptance, increased water-use efficiency, augmented affordability of n ondiscretio nary customer water consumption, and improved drought response. tion cool. For utilities that are seri- ous about conserving water and send- ing a fair and effective price signal about usage to their customers, water budgets appear to be an excellent option to consider. Commitment, coordination, and education are essential. Designing and implementing a water budger- based rate structure involves all levels of a water agency, including the gov- erning board, general manager, rates staff, conservation staff, accounting and finance staff, computer and infor- mation systems, public affairs, and customers. To maximize the potential for success, coordination, corrimuni- cation, and education with all of those involved in the project are required. A defend the effort and will be prepared and motivated to fix problems as they are identified. Identify information system requirements early. The implemen- tation of water budget-based rate structures requires computerized uril- iry billing systems that can incorpo- rate specific customer-level infor_r:a- tion into a billing calculation. Most modern, database-centered, utility billing systems can probably be adapted to incorporate water bud- gets without signi'icant effort, but it is important to identify data and billing system requirements early in the process. This will enable utility staff to develop or purchase any nec- essary hardware and software and MAYER 27, AL PE=R-REVIEVV D 1 100:5 • UDURN.R,: A'WWA MAY 2008 129 to obtain the data necessary to imple- ment the program in time for the launch date. A number of agencies studied in this research stated that the critical ingredient for success with a water budget system was nor hard- ware or software but rather "peo- pleware," i.e., the people who make the program happen. Educate and inform. When a water budget rate structure is being implemented, educating and inform- ing customer-, about the rare structure and how it works are essential. Cus- tomized rare strut ure, customers ex- pect to be neared as individuals. The water utility should be ready with staff and in`ormar'on to respond to customers' questions and concerns right from the outset of the program. Use a scientific basis for water budgets whenever possible. Water budgets should be objective and must make sense to customers. To the extent possible, they should be based on empirical data (indoor budgets) and horticultural science (outdoor budgets). Be explicit about Utilities without a pressing need to encourage water conservation are not good candidates J for water budgets because implementation costs migbt exceed any nonconservation benefits. comers need to understand nor only how the rate structure works and will effect them but also why it is being implemented. The city of Boul- der sent out at least four mailings to customers in advance of implement- ing the new water budget rate struc- ture. In addition, there were articles in local newspapers and extensive information on the city's website. Respond to customer concerns. No water budget program is perfect. The water utility and its board should be ready and willing to make adjust- ments to the program based on good suggestions from customers. Many suggestions will likely come when the program is fast implemented, but others will come through the fullness of rime and experience. Adaptation through years of implementation has been a hallmark of the successful water budget programs in San Juan Capistrano and IRWD. Budget adjustments and variances with rea- sonable cause are important for achieving customer acceptance of and buy-in to the program. In a cus- the formulation of the allocations and be forthcoming about areas in which agency discretion enters into the allocation formula. Time program implementation strategically. New rare structures are usually best implemented during off- peak season. This allows customers to adjust to the new rate structure for several billing periods before encountering potential "sticker shock" in the peak season. Take advantage of the informa- tion provided by the water budget system. Water budgets have tremen- dous potential as a tool to assist with supply shortages such as drought. They also provide an easy means for targeting water conser- vation programs to the customers who can most benefit from them. If budgets are set properly, then cus- comers who grossly exceed their budgets become prime candidates for targeted conservation measures. Standard increasing-block rate struc- tures don't provide this level of insighr into customer demand. Drought response may prove to be the most i-noortanr benefit of water budgets. In order to make the most of this potential benefit, utili- ties must understand how to take advantage of the rate structure to encourage and, if necessary, man- date demand curtailment. During a drought the utility can adjust the pricing tiers and the budget size as necessary to achieve the desired level of curailment. Target additional incremental rev- enue to incremental water efficiency programs. IRWD uses all of the rev- enue from all of the tiers that are above budget allocation to fund addi- rional water conservation measures, water reuse, and environmental pro- grams. This has proved to be a strong selling point for its water budget pro- gram. Additionally, IRWD's rates are among the lowest in Orange County. Customers like the idea of the utility investing the high-tier payments in cost-justified water-efficiency pro- grams. This revenue can go toward subsidizing the low-tier rate, provid- ing rebates for water-efficienr fixtures; hardware, and equipment, and for conservation staff. This in Turn results in reduced water use and lower bills for customers. Because IRWD covers fixed costs on a separate part of the bill, reduced demand does not nega- tively affect utility revenue or opera- tions. This linkage helps explain where the money for water conser- vation programs comes from and how the race structure contributes to conservation beyond just sending an effective price signal. Recommendations for future re- search. Advanced tools for water budget calculation and implemen- tation. Water agencies wishing to implement a water budget-based rate structure are essentially on their own when it cones to developing a customer billing system capable of handling the rate structure and when it comes to developing water bud- gets for diverse classes of customers. Future research could tackle these issues by specifying billing system requirements for implementing water 130 MAY 2008 1 JOURNAL AWWA • 100:: 1 PEER-REVIEWED I iNIAYER E? AL budges. This task was accomplished to a small degree in this project, but it could be greatly expanded. Establishing accurate and reason- able water budgets remains a chal- lenge, paticularly for the CH sector. Future research could explore merh- ods for using GIS and other geospa- tial technologies for remotely mea- suring irrigated areas. This could help aurom are the process for establish- ing landscape water budgets. For the CII sector, additional benchmarkirg data are required to determine efficient usage levels from different classes of customers. Cur- rent CE budgeting methods that use historical consumprion to set future budgets are ineffective at developing budgets that encourage efficiency. Benchmarking measures based on key usage parameters, such as num- ber of employees, meals served, cars washed per day, and building area, could be more effective methods for establishing water budgets. To ac- complish this, additional data are required, Such an effort could be combined with an update of the 2000 Aw-waRF study, "Commercial and Institutional End Uses of Water." Water budgets and drought re- sponse. This research has identified drought response as an area in which water budget-based rate structures offer tremendous ootenrial benefit. However, utilities have only limited field experience with man- aging water shortages with the aid of water budgets. In the coming years, this is very- likely to change. An important area of future research will be to examine and evaluate the uses of water budgets during real water shortage situations. New implementations of water budget-based rate structures. In the coming years, it is likely that more water providers will move toward this type of conservation-oriented rate structure. This research repre- sents the beginning of objective analy- sis of the implementation and per- formance of water budget-based rate structures. As new ideas and con- cepts are put into place, this research should be updated and expanded in the hope of improving understand- ing of water budget-based rates and how they can be applied in the water utility context. ACKNOWLEDGMENT The authors thank each of the many individuals who made this research project possible through their generosity, interest, and per- severance. This project was made possible by AwwaRF and the authors thank project managers India Williams and Susan Turnquisr for their assistance and guidance. The authors also thank the orga- nizarions rzar provided funding and in-kind support: US Environmental Protection Agency, City of San Diego (Calif.) Water Department, City of Scottsdale (Ariz.) Water Resources Department, Pinellas County (Fla.) Utilities, East Bay -Municipal Utility District (Calif.), California Urban Water Conservation Council, Jordan Valley (Utah) Water Conservancy District, the city of San Juan Capis- trano, Las Vegas Valley (Nev.) Water District, the city of Portland (Ore.), Oray Water District (Calif.), the Los Angeles Department of Water and Power, Irvine Ranch Water District (Calif.), Davis California Public Works Department, the city of West Jordan (Utah), Centennial `Mater and Sanitation District (Colo.), the city of Boulder (Colo.), the city of Santa Barbara (Calif.), the town of Cary (N.C.), the city of Aurora (Colo.), and -Marco Island (Fla.). The authors also thank the mem- bers of the project advisory commit- tee: Eric Rothstein of CH22M HILL, David Bracciano of Tampa Bay Water, and Scott Rubin. ABOUT i;l ~IIHQRS I Peter Nlayer (to whom correspon- dence should be addressed) is vice- president and partner at Aquacraft Inc., * 2709 Pine St., Boulder, CO 80302; e-mail mayer@aquacraft.com. He has 14 years of experience in water resources engineering for Aquacra ft. Nlayer has a BS degree from Oberlin College (Ohio) and an ~1S degree in water resources engineering from the University of Colorado at Boulder. William DeOreo is president and partner at Aquacraft. Thomas Chesnutt is president of A& N Technical Ser- vices in Encenitas, Calif., and Lyle Summers is a retired chief-econo- misr for the State of Utah: Water Division. Dare of submission: 09/20/07 Date of acceprance: 01/24/08 REFERENCES AWWA, 2000. Manual of Water Supply Prac- tices: Principles of Water Rates, Fees, and Charges (M1). AIP/WA, Denver. Billingsley, IN.G., 2004. An Assessment of Municipal Drought Contingency Plan- nino in Texas. Proc. 2004 AWWA Water Sources Conf., Austin, Texas. Hoffouhr, J., 2004. Avoiding Rate Shock. Jour. AVVWA, 8:96:6. Lampe, L.K.; Hahn, K.; & Kenel, P., 2003. Deal- ing With Drought: Real-time Manage- ment of Supply and Demand. Proc 2003 AWNA Ann. Con`., Atlanta. Mayer, P.; DeOrao, W.; Chesnurt, T.; Pekel- ney, D.; & Summers, L., 2008. Water Budgets and Rate Structures-Innova- tive Man agementTools. AvnaaRF, Denver. Pekelney, D. & Chesnutt, T., 1997. Landscaoe Water Conservation Prcarams: Evalua- tion of Water Budget Based Rate Structures: A report prepared for the Metropolitan Water District and the Municipal Water District of Orange County. A&y Technical Services Inc., Encinitas, Calif. I you have a comment about this ar-icle, please contact us at journalCa aa~~rra.org. MAYER ET AL 11 PEER-AEVIE'WEED 1 100:5 - JCURNA'. AWWA I MAY 2008 131 RESOLUTION NO. 88-18 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT ON THE CALIFORNIA DROUGHT WHEREAS, periodic droughts are a historic fact in the State of California; and WHEREAS, California is in the second year of a severe drought, requiring the California State Water Project and the Federal Central Valley Project to draw heavily upon long-term storage to meet water commitments statewide; and WHEREAS, precipitation for the current water year has been substantially below normal, particularly in the watersheds of the imported water supplies serving Southern California, and many communities in the State may suffer water shortages; and WHEREAS, an accelerated water conservation program is essential to reduce the risk and severity of water shortages should the drought continue into 1989; and WHEREAS, Southern California, Orange County and Yorba Linda may be faced with chronic water shortages in the near future as a result of: (a) unpredictable annual hydrologic conditions throughout California, (b) permanent reduction in historical entitlements to the Colorado River, and (c) the delayed completion of State Water Project, the completion of which is essential to meeting those needs; and WHEREAS, all water users in California must share in meeting potential anticipated water shortages since the water resources of the State of California are to be shared by all of the people of California, NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba Linda Water District as follows: Section 1: Every household, farmer, businessperson and governmental entity in the District's service area is urged to establish a goal of reducing water demands on the District's water supply system by ten (10) percent. Section Z The General Manger is directed to implement Action Level III drought management activities identified in the District's Urban Water Management Plan and coordinate drought related activities with Metropolitan Water District of Southern California and Municipal Water District of Orange County. Section 3: The General Manager is directed to monitor water supply conditions in the State of California and to update the Board and public so that further drought measures can be developed and implemented as early as practicable should the drought continue in 1989. Section 4: A copy of this resolution is to be sent to the County of Orange, Metropolitan Water District of Southern California, Municipal Water District of Orange County, news agencies, and all cities and other water supply agencies within, or immediately surrounding the District's service area. Section 5: This Resolution shall be of no further force and effect when a wholesale water supplier to the District and/or a State agency, with proper legislative authority, declares that emergency drought conditions no longer exist. PASSED AND ADOPTED THIS the 23rd day of June, 1988, by the following called vote: Ayes: 4 Paul Armstrong, Whit Cromwell, Sterling Fox, Arthur C. Korn Noes: 0 Absent: 1 Roy Knauft Abstain: 0 nt /si, ora inda Water District ATTEST: ~LUrYti Secretary Yorba Linda Water Distri t RESOLUTION NO. 90 -13 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT URGING THE PUBLIC'S ADOPTION OF WATER CONSERVATION MEASURES TO MITIGATE THE EFFECTS OF THE 1990 CALIFORNIA DROUGHT WHEREAS, California is entering the fourth consecutive year of drought conditions; and WHEREAS, precipitation for the current water year has been substantially below normal in the watersheds of the water supplies serving Southern California; and WHEREAS, water deliveries from the Colorado River to Southern California are being cutback; and WHEREAS, the completion of the State Water Project continues to be delayed; and WHEREAS, the Yorba Linda Water District has broad authority to enact water conservation rules under the laws of the State of California; and WHEREAS, the adoption of water conservation measures would assist in avoiding or minimizing the effects of a water shortage in Southern California. NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Yorba Linda Water District urges all water users in the District to voluntarily adopt water conservation measures designed to avoid or minimize the effects of a water shortage. Section 1: Necessary residential, commercial, and governmental irrigation should be completed only between the hours of 6:00 p.m. and 10:00 a.m. and no more than on an every other day basis. Section 2: Hand watering should be done using a positive shut-off hose nozzle. Section 3: Agricultural users and commercial nurseries should curtail all non-essential water use. Section 4: Property owners should use drought tolerant plant materials in the landscaping of their property. Section 5: Water should not be used to wash down sidewalks, driveways, parking areas, tennis courts, patios or other paved areas, except to alleviate immediate fire or sanitation hazards. Section 6: Restaurants should not serve water to their customers except when specifically requested. Section 7: The operation of any ornamental fountain or similar structure should be curtailed. Section 8: Hand washing of vehicles and equipment should be done using a positive shut-off hose nozzle only between the hours of 6:00 p.m. to 10:00 a.m. Washing is permitted anytime at a commercial car wash. Section 9: Water leaks should be fixed as soon as possible. Section 10: Property owners should install water-saving shower heads, water saving toilet kits, and/or flow restrictors. Section 11: Homeowners should use automatic dishwashers and washing machines only for full loads. Section 12: Property owners should insulate the hot water pipes to reduce the waiting time for hot water. PASSED AND ADOPTED this 14th day of June, 1990 by the following called vote: AYES: Arthur Korn, Sterling Fox, Paul Armstrong, Whit Cromwell and NOYES: 0 M. Roy Knauf t . ABSENT: 0 ABSTAIN: 0 woe President, / Yorba Linda Water District (SEAL.) ATTEST: , A~ Secretary, Yorba Linda Water District ORDINANCE NO. 91-02 AN URGENCY ORDINANCE OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT FINDING THE NECESSITY FOR AND ADOPTING AN EMERGENCY WATER MANAGEMENT PROGRAM WHEREAS, California is in the fifth consecutive year of drought conditions; and, WHEREAS, precipitation for the current water year is substantially below normal in the watersheds of the water supplies serving Southern California; and, WHEREAS, the completion of the State Water Project continues to be delayed; and WHEREAS, water deliveries from the State Water Project to southern California are being cutback; and WHEREAS, the Metropolitan Water District of Southern California has instituted water conservation goals with severe monetary penalties for not meeting the goal; and, WHEREAS, the Municipal Water District of Orange County, as a member agency of the Metropolitan Water District of Southern California, has also instituted water conservation goals with severe monetary penalties for the Yorba Linda Water District; and, WHEREAS, the Yorba Linda Water District (hereinafter referred to as District) has broad authority to enact water conservation rules under the laws of the State of California; and, WHEREAS, the public's adoption of water conservation measures is now, or may be, necessary to avoid or minimize the effects of the water shortage in southern California. NOW, THEREFORE, BE IT ORDAINED THAT THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT, under the authority of Water Code Sections 350 et seq, 375 et seq, 31024, 31026 and 31027 as follows: Section 1. Findings - Declaration of Water Shortage Emergency. The Board does hereby find that the matters set forth in the recitals above are true and correct and constitute an emergency condition or a threatened or existing water shortage condition within the District. These conditions require this urgency Ordinance to take effect immediately. Section 2. Priority Uses of Water. In order to promote water conservation, the objective of the different Levels of water management are to curtail the low priority uses of water. Low priority uses of water are generally described as all uses other than for drinking, cooking, bathing, sanitation, fire suppression, or for medicinal or health related uses requiring water, such as dialysis machines. Section 3. Base Target Amount. a. A Base Target Amount shall be established for each connection in the Yorba Linda Water District corresponding to the average water consumption by meter size for areas with similar land uses, lot or home size, landscape sophistication and economic location for each two month billing cycle in fiscal year 1989-90. b. The Base Target Amount for the residential customers may be adjusted to account for families larger than the District wide average of 3 per persons per household at the rate of 100 gallons per day per additional person for four (4) to a maximum of seven (7) persons per household. c. Customers with multiple metered connections in the same revenue classification, serving similar land uses may, upon approval in advance by the District, allocate the Base Target Amount between their connections. d. In cases where there is insufficient historical data to establish a Base Target Amount, the District shall establish a Base Target Amount by comparing water users similar as to type, lot or home size, landscape sophistication and economic location. e. The Base Target Amount may be established and adjusted based upon a determination by the Board of Directors of high priority and low priority water uses. Section 4. Level 1 - Voluntary Conservation Measures. Level 1 measures may be declared by the Board of Directors when, in their judgment, the possibility exists the District may not be able to meet all of the demands of its customers without punitive surcharges levied against the District due to restrictions on imported supply. The Board of Directors shall, by separate Resolution, establish voluntary water conservation goals and advise customers of ways to conserve water. Section 5. Level 2 - Mandatory Conservation. Level 2 measures, hereinafter referred to as "Water Watch", may be declared by the Board of Directors when, in their judgment, the probability exists that the District will not be able to meet all of the water demands of its customers without punitive surcharges levied against the District due to restrictions on imported supply. The Board of Directors shall, by separate Resolution, determine the extent of conservation required by setting a percentage of the Base Target Amount for high priority and low priority water use, advise customers of ways to save water and may enforce such allocation by mandating certain practices identified in Exhibit "A" of this Ordinance. Section 6. Level 3 - Mandatory Reduction. Level 3 measures, hereinafter referred to as "Water Warning", may be declared by the Board of Directors when, in their judgment, the District will not be able to meet all of the water demands of its customers without punitive surcharges levied against the District due to restrictions on imported supply. The Board of Directors shall, by separate Resolution, determine the extent of conservation required, set a percentage of the Base Target Amount for high priority and low priority water use, advise customers of ways to save water and may enforce such allocation by mandating certain practices identified in Exhibit "A" of this Ordinance. Section 7. Level 4 - Water Emergency. Level 4 measures, hereinafter referred to as "Water Emergency", may be declared by the Board of Directors when the failure of any supply or distribution facility, whether temporary or permanent, occurs in the water distribution system of the State Water Project, Metropolitan Water District of Southern California, Municipal Water District of Orange County, Orange County Water District or Yorba Linda Water District may seriously affect the ability to supply water to customers. The Board of Directors shall, by separate Resolution, determine the extent of conservation required, set a percentage of the Base Target Amount for high priority and low priority water use, advise customers of ways to save water and may enforce such allocation by certain practices identified in Exhibit "A" of this Ordinance. Section 8. Rate for Excess Water Use. Water consumption which is in excess of the Base Target Amount or percentage of the Base Target Amount as established or as modified by the Board of Directors will be charged the District's current water rate plus a surcharge equal to the accumulative cost per acre foot of any penalty rate adopted by the Metropolitan Water District of Southern California plus any penalty rate adopted by the Municipal Water District of Orange County plus any penalty rate adopted by the Orange County Water District converted to a unit cost per one hundred cubic feet. Section 9. Enforcement. a. Degrees of Violation. The following enforcement measures shall apply to any customer who willfully disregards any of the mandated and/or prohibited water management practices adopted pursuant to this Ordinance: 1. First violation: A written warning shall be mailed to the customer. The warning shall state the violation and that if the matter is not corrected, additional enforcement measures may be taken. 2. Second violation: A letter shall be mailed to the customer explaining the violation and a one time charge equal to two times the latest water bill will be charged to the customer. 3. Third violation: An orifice flow restrictor will be inserted into the customers meter to reduce the rate of flow. The orifice will remain in the service line for one billing cycle. The customer shall pay the cost to insert and remove the orifice flow restrictor. 4. Fourth and subsequent violations: Service of water will be subject to further restriction with an orifice or termination of service. The term is at the General Manager's discretion so as to minimize the health and safety affects to the customer. b. Due Process Procedures. The General Manager shall notify a customer that the District intends to surcharge water usage or to restrict or shut off water service. In the cases of flow restriction or shut off, the notice shall be delivered at least 72 hours in advance. The General Manager shall provide an opportunity to the customer within that time to dispute the District's determination of non-compliance with this Ordinance or to demonstrate that compliance has been achieved subsequent to the notice. 2. The General Manager may revoke, modify, or extend time for compliance with a notice of intent to surcharge water usage or to restrict or shut off water service if the General Manager is reasonably satisfied that such action will be consistent with the best interests of the District and/or the purposes of this Ordinance. 3. The General Manager shall provide for restoration of restricted or shutoff service upon a determination that appropriate steps to assure compliance with this Ordinance have been taken. The customer shall be responsible, as a precondition of service restoration, to pay the District's normal and usual shutoff and turn-on fees and to comply with such other District Rules and Regulations as apply to customers' service shutoff for nonpayment of water bills. Section 10. Appeal Process. The Board of Directors shall, by separate Resolution, establish an appeal process that affords customers the opportunity to contest findings, correct errors and alleviate unusual and extraordinary circumstances. Section It. Notification. The District shall notify all customers of the water conservation Level adopted by the Board of Directors, Base Target Amount or percentage of Base Target Amount, and recommended and mandated practices adopted by the District. Section 12. Effective Date. This Ordinance is enacted as an emergency measure and shall become effective on the date of adoption by the Board of Directors. The General Manager is authorized and instructed to cause a copy of the full text of this Ordinance to be published once in a newspaper of general circulation within the District. Section 13. Rescind Conflicting Resolutions. Effective immediately upon adoption of this Ordinance, the voluntary measures adopted in Resolution No. 90-13, and all conflicting Resolutions are hereby rescinded. Section 14. Severability. If any portion of this Ordinance is found to be unconstitutional or invalid, the District hereby declares that it would have enacted the remainder of this Ordinance regardless of the absence of any such invalid portion. Section 15. California Environmental Quality Act. The provisions of this Ordinance are exempt from the provisions of the California Environmental Quality Act as an action to mitigate emergency conditions and as a rate setting measure pursuant to the Public Resources Code Sections 21080(b)(4) and 21080(b)(8), respectively; and in following with the Notice of Exemption filed by the Metropolitan Water District of Southern California on January 8, 1991, as lead agency for the establishment of water delivery conservation programs for water delivered to the Municipal Water District of Orange County. PASSED AND ADOPTED this 28th day of March, 1991 by the following called vote: AYES: M. Roy KNAUFT JR., PAUL ARMSTRONG, STERLING FOX, ARTHUR C. KORN NOYES:0 AND CARL SCANLIN ABSENT: 0 ABSTAIN: 0 ~Ia-~2 President, U o ` Yorba Linda Water District (SEAL) ATTES~ Secretary, Yorba Linda Water District Exhibit "A" to Ordinance 91-02 Water Conservation Practices These practices are intended as guidelines for District customers only and are based on the best information available when this Ordinance was adopted. Any Resolution adopting a water conservation level authorized by this Ordinance may modify the practices identified in this list to account for new information or other factors not available or considered when this Ordinance was adopted. Customer Actions: 1. Check monthly for plumbing leaks and any leaks found should be repaired immediately. 2. Irrigate commercial nurseries, golf courses, parks, school yards, traffic medians and other public open space and other non residential landscaped areas no more often than every third day, and only between the hours of 6:00 p.m.and 5:00 a.m. 3. Reduce outside irrigation schedules to the absolute minimum to keep important plants alive. Withhold fertilizer to inhibit new growth. 4. Residential customers with addresses ending with an even number water lawns, landscaping and other turf areas only on even number days of the month and between the hours of 4:00 p.m. and 10:00 a.m. Residential customers with addresses ending with an odd number water lawns, landscape and other turf areas only on odd number days of the month and between the hours of 4:00 p.m. and 10:00 a.m. 5. Adjust sprinklers to avoid "watering" sidewalks and gutters, and lower pressure to avoid creating a wasteful mist. 6. Eliminate washing of sidewalks, walkways, buildings, walls, patios, driveways, parking areas or other paved surfaces, or walls except to eliminate conditions dangerous to public health or safety or when required as surface preparation for the application of architectural coating or painting, and to alleviate immediate fire hazards. 7. Curtail water used to clean, fill or maintain levels in decorative fountains, ponds, lakes or other similar aesthetical structures unless such water use is approved in advance by the District. 8. Curtail water used for the initial filling or refilling of swimming pools, spas or ponds unless such water use is approved in advance by the District. Replacement due to evaporation is permitted. 9. Curtail washing of motor vehicles, trailers, boats and other types of equipment unless a bucket and a hose equipped with a positive shutoff nozzle for quick rinses is used. Washing of vehicles may be done by a commercial car wash that uses recycled water. 10. Display notice that water will be served only upon request at all restaurants, hotels, cafes, cafeterias or other public place where food is sold, served or offered for sale. 11. Water served in restaurants, hotels, cafes, cafeterias or other public places where food is sold or offered for sale only when requested by a customer. 12. Post notice of the water supply shortage in each room of hotels, motels, inns, guest houses, bed and breakfast facilities and short-term commercial lodgings along with an explanation of necessary compliance measures taken by the establishment. 13. Install low-flow shower heads, toilet dams or low-flow toilets, and faucet flow restrictors in each room of hotels, motels, inns, guest houses, bed and breakfasts facilities and short-term commercial lodgings. 14. Hand water plants with a positive shut-off hose nozzle. 15. Place a plastic bottle, bag or dam in all toilets. 16. Use automatic dish and clothes washers for full loads only. 17. Insulate hot water pipes to reduce the waiting time for hot water. Install circulating hot water system or point off use water heater. 18. Turn off the water while brushing teeth, washing hands and/or shaving. 19. Install water saving shower heads and/or flow restrictors. 20. Take shorter showers. Turn off the water when lathering, shampooing, or shaving. Turn the shower back on to rinse. 21. Capture bath/shower warmup water in buckets and use the water to irrigate plants or to flush toilets. 22. Use garbage disposers sparingly. 23. Do not plant any annuals or new plants that will require extra watering. 24. Place mulching material in landscaped areas to decrease soil moisture evaporation. 25. Use a broom to clean outside patios, porches and sidewalks. 26. Cover spas and swimming pools when not in use. If spa or pool will not be used, make the necessary preparations for not refilling the spa or pool while shortage lasts. District Actions: 1. Limit use of water from fire hydrants to fire fighting, approved construction activities or other activities as approved by the District as necessary to maintain the health, safety and welfare of the public. 2. Turn off all construction meters until the condition(s) causing the shortage are abated to the satisfaction of the General Manager. 3. Issue no construction meters for earth work or road construction purposes. 4. Moratorium on new service connections. RESOLUTION NO. 91-1 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT IMPLEMENTING LEVEL 1 9L~ OF THE EMERGENCY WATER MANAGEMENT PROGRAM WHEREAS, California is in the fifth consecutive year of drought conditions; and, WHEREAS, precipitation for the current water year is substantially below normal in the watersheds of the water supplies serving Southern California; and, WHEREAS, the completion of the State Water Project continues to be delayed; and WHEREAS, water deliveries from the State Water Project to southern California are being cutback; and WHEREAS, the Metropolitan Water District of Southern California has instituted water conservation goals with severe monetary penalties for its member agencies within southern California; and, WHEREAS, the Municipal Water District of Orange County, as a member agency of the Metropolitan Water District of Southern California, has also instituted water conservation goals with severe monetary penalties for the Yorba Linda Water District; and, WHEREAS, the Yorba Linda Water District (hereinafter referred to as District) has broad authority to enact water conservation rules under the laws of the State of California; and, WHEREAS, the public's adoption of water conservation measures is now, or may be, necessary to avoid or minimize the effects of the water shortage in southern California; and, WHEREAS, the District has adopted Ordinance 91-02 which authorizes the Board of Directors to adopt, by separate Resolution, different Levels of water conservation and practices; and, WHEREAS, the Board of Directors desires to implement Level 1 water conservation measures at this time. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Yorba Linda Water District, under the authority of Water Code Sections 350 et seq, 375 et seq, 31024, 31026 and 31027 as follows: Section 1. Level 1 - Voluntary Conservation Measures. The Board of Directors hereby declares that, in their judgment, the possibility exists the District may not be able to meet all of the demands of its customers without punitive surcharges levied against the District due to restrictions on imported supply. The Board of Directors hereby establishes voluntary water conservation goals and advises customers of ways to conserve water. 2* F:~ sc ~ n J e~~) Section 2. Voluntary Water Conservation Goals. In order for the District to meet its water conservation objective established by the Metropolitan Water District of Southern California, the following targets are established: a. All customers, except landscape customers, are requested to voluntarily reduce water consumption by 18%. b. All landscape customers are requested to voluntarily reduce water consumption by 33%. Section 3. Water Conservation Practices. The Voluntary water conservation practices attached hereto as Exhibit "A" are now in effect. Section 4. Effective Date. This Resolution shall become effective immediately upon its adoption by the Board of Directors. This Resolution shall remain in effect until rescinded or until Ordinance No. 91-02 is repealed. Section 5. Severability. If any portion of this Resolution is found to be unconstitutional or invalid, the District hereby declares that it would have enacted the remainder of this Ordinance regardless of the absence of any such invalid portion. Section 6. California Environmental Quality Act. The provisions of this Ordinance are exempt from the provisions of the California Environmental Quality Act as an action to mitigate emergency conditions and as a rate setting measure pursuant to the Public Resources Code Sections 21080(b)(4) and 21080(b)(8), respectively; and in following with the Notice of Exemption filed by the Metropolitan Water District of Southern California on January 8, 1991, as lead agency for the establishment of water delivery conservation programs for water delivered to the Municipal Water District of Orange County. PASSED AND ADOPTED this 28th day of March, 1991 by the following called vote: AYES:M. ROY KNAUFT JR., PAUL ARMSTRONG, STERLING FOX, ARTHUR C. KORN NOYES: 0 AND CARL SCANLIN ABSENT:0 ABSTAIN: 0 (SEAL) ATTE. i Secretary, Yorba Linda Water District President, U Yorba Linda Water District EXHIBIT "A" TO RESOLUTION 91-12 Section A. VOLUNTARY WATER CONSERVATION PRACTICES: 1. Irrigate landscape between the hours of 6:00 p.m. and 10:00 a.m. only - and no more often than every other day. 2. Adjust sprinklers to avoid "watering" sidewalks and gutters, and lower pressure to avoid creating a wasteful mist. 3. Hand water plants with a positive shut-off hose nozzle. 4. Do not wash sidewalks, walkways, buildings, walls, patios, driveways, parking areas or other paved surfaces, or walls except to eliminate conditions dangerous to public health or safety or when required as surface preparation for the application of architectural coating or painting, and to alleviate immediate fire hazards. 5. Eliminate washing of motor vehicles, trailers, boats and other types of equipment unless a bucket or a hose equipped with a positive shutoff nozzle for quick rinses is used. Washing of vehicles may be done by a commercial car wash that uses recycled water. 6. Curtail water used to clean, fill or maintain levels in decorative fountains, ponds, lakes or other similar aesthetical structures unless such water use is approved in advance by the District. 7. Check monthly for plumbing leaks and any leaks found should be repaired immediately. 8. Place a plastic bottle, bag or dam in all toilets. 9. Use automatic dish and clothes washers for full loads only. 10. Insulate hot water pipes to reduce the waiting time for hot water. 11. Turn off the water while brushing teeth, washing hands and/or shaving. 12. Install water saving shower heads and/or flow restrictors. 13. Take shorter showers. Turn off the water when lathering, shampooing, or shaving. Turn the shower back on to rinse. 14. Take a bath. RESOLUTION NO 92-03 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT ADOPTING THE WATER SHORTAGE CONTINGENCY PLAN WHEREAS, in semi-arid southern California it is imperative that every reasonable measure be taken to manage precious local and imported water supplies, and WHEREAS, on January 10, 1991, the Board of Directors of the Yorba Linda Water District adopted an update to the District's Urban Water Management Plan in accordance with the requirements of the Urban Water Management Plan Act of 1983, and WHEREAS, Assembly Bill 11X was signed by the Governor on October 13, 1991, and requires all urban water suppliers to adopt a Water Shortage Contingency Plan, and WHEREAS, the Water Shortage Contingency Plan reflects water supply forecasts and policies to meet water shortage contingencies within the Yorba Linda area, and WHEREAS, the Water Shortage Contingency Plan complements the Metropolitan Water District of Southern California and Municipal Water District of Orange County regional Water Shortage Plans. NOW, THEREFORE BE RESOLVED by the Board of Directors of Yorba Linda Water District as follows: Section 1: The Board of Directors acknowledges the essential nature of water management within the District and adopted an Urban Water Management Plan, Emergency Water Management Ordinance and this Water Shortage Contingency Plan, and will implement these instruments in accordance with State law. Section 2: The Board of Directors supports the water management efforts adopted by the Metropolitan Water District of Southern California and Municipal Water District of Orange County in their regional plans. PASSED AND ADOPTED this 12th day of March, 1992, by the following called vote: AYE:5 - Paul Armstrong, Sterling Fox, Arthur Korn, M. Roy Knauft, Jr. anc NOE: 0 and Carl Scanlin ABSENT: 0 ABSTAIN: 0 Lk'c President, Yorba Linda Water District ATTEST: Secretary, Yorba Linda Water District AGENDA REPORT DATE: April 9, 1992 TO: President and Members of the Board FROM: Michael Robinson, Assistant Administrator SUBJECT: Consideration of Resolution 92-06 to revise Level 1 Voluntary Water Conservation targets. PURPOSE: To request that the Board of Directors adopt Resolution 92-06 Implementing Level 1 of the Emergency Water Management Program and Rescinding Resolution 91-12. ANALYSIS: In response to five years of below normal precipitation, reduced water deliveries by California's State Water Project and the possibility of severe financial penalties imposed under Stage V of the Metropolitan Water District (Metropolitan) Incremental Interruption and Conservation Program (IICP), the Board of Directors adopted Ordinance 91-02. The Ordinance, adopted on March 28, 1991, declares a water shortage emergency, defines four distinct Levels of water conservation and sets forth details to administer a program necessary to avoid or minimize the effects of a water shortage in southern California. Also, the Ordinance requires the Board to adopt, by separate Resolution, a specific Level of conservation appropriate to the water supply emergency, conservation targets and a list of water conserving practices. To comply with Metropolitan's Stage V targets, District customers needed an 18% overall water conservation effort. On March 28, 1991, the Board of Directors adopted Resolution 91-12 to implement Level 1 - Voluntary Water Conservation Measures. Level 1 targets are 18% voluntary water savings for all customers (except landscape customers) and 33% voluntary water savings for all landscape customers. The District has remained at Level 1, Voluntary Water Conservation Measures, since it was adopted in March 1991. During February and March 1992, Yorba Linda received about 12.7 inches of rain, bringing the season total to about 135% of normal. More importantly, precipitation in the State Water Project watershed is above last year. Storage and runoff to key State Water Project reservoirs has improved to the point where the Department of Water Resources increased Metropolitan's State Water Project deliveries from 10% of normal to 45% of normal. Above normal local rainfall eased water demands. Local rainfall saved imported water supplies which can be used later in the year. Even though conditions are improving, the Department of Water Resources still classifies 1992 as a "critically dry year". Due to the improving imported water supply conditions and above normal local rainfall, Metropolitan implemented Stage I of the IICP on March 27, 1992. Stage I calls for 10% water conservation on a voluntary basis (which means that no penalties will be assessed if an agency exceeds its IICP target). Stage I went into effect on April 1, 1992. To comply with Metropolitan's IICP Stage I targets, District customers must achieve a 5% to 10% overall water conservation effort. The critical stage of the current drought appears to have eased. Water continues to be a precious natural resource and it is important for District customers to maintain their commitment to wise water use. Therefore staff recomends the District to continue with the "Water Conservation Ethic" public information and education activities outlined in the 1991 Urban Water Management Plan. In consideration of the changing water supply conditions, staff recommends the District continue with it's water conservation policies but revise specific conservation targets. Here, in summary, is the proposed water conservation policy: • That restriction on water supplies to Metropolitan still exist, therefore, water conservation within the District is still important. • To achieve the District's water conservation goals, all customers are requested to voluntarily reduce water consumption by 10% from their Base Target amounts. • That suggested voluntary water conservation practices are now in effect. • To continue with a public information program which caution consumers that water reserves remain short, that nature may dictate future shortages, and that a commitment to wise use of water as a precious natural resource will allow the conservation goals to be reached both now and in the future. This matter was reviewed at the April 8, Public Information Committee meeting. FISCAL IMPACT: None. CONCLUSION: It is recommended that the Board of Directors adopt Resolution 92-06 Implementing Level 1 of the Emergency Water Management Program and Rescinding Resolution 91-12. Prepared by: Michael Robinson Assistant Administrator Submitted by: William J. Robertson General Manager/Secretary RESOLUTION NO. 92-06 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT IMPLEMENTING LEVEL 1 OF THE EMERGENCY WATER MANAGEMENT PROGRAM AND RESCINDING RESOLUTION 91-12 WHEREAS, from year to year, the supply of water available to the Yorba Linda Water District (District) from the Metropolitan Water District of Southern California (Metropolitan) is affected by variability in the Colorado River and the Feather River watersheds; and, WHEREAS, precipitation in 1992 in the Feather River watershed has improved the runoff and snowpack conditions compared to the last five years; and, WHEREAS, the Department of Water Resources has evaluated these circumstances and determined that it can deliver 45% of the amount of the order placed for State Water Project water; and, WHEREAS, winter rains in southern California have reduced early season water demands and thus saved imported water supplies which Metropolitan can use later in the year; and, WHEREAS, Metropolitan has determined that under these conditions it can provide deliveries to its member agencies at the level of Stage I of the Incremental Interruption and Conservation Program (IICP); and, WHEREAS, Stage I of Metropolitan's IICP calls for voluntary reductions from normal water use of 10 percent without monetary penalties for excess water consumption; and, WHEREAS, the Municipal Water District of Orange County (MWDOC), as a member agency of Metropolitan, has adopted a Resolution implementing Stage I on its member agencies; and, WHEREAS, the District has adopted Ordinance 91-02 which requires the Board of Directors to adopt, by separate Resolution, a particular Level of water conservation, and conservation targets and practices; and, WHEREAS, in consideration of revised policies adopted by Metropolitan and MWDOC, the Board of Directors desires to revise the District's Level 1 conservation targets adopted in Resolution 91-12. NOW THEREFORE BE IT RESOLVED that the Board of Directors of the Yorba Linda Water District does hereby resolve, determine and order as follows: Section 1: Level 1, Voluntary Conservation Measures. The Board of Directors hereby declares that restrictions on water supplies to Metropolitan Water District still exist. To meet the water supply conditions within the District, the Board of Directors hereby establishes voluntary water conservation goals and advises customers of ways to conserve water. Section 2: Voluntary Water Conservation Goals. In order for the District to meet its water conservation objective established by Metropolitan, all customers are requested to voluntarily reduce water consumption by 10% from their Base Target amounts. Section 3: Water Conservation Practices. The Voluntary water conservation practices attached hereto as Exhibit "A" are now in effect. Section 4: Public Information. The District shall expand a public information campaign to caution consumers that water reserves remain short, that nature may dictate future shortages, and that a commitment to wise use of water as a precious natural resource will allow the conservation goals to be reached now and in the future. Section 5: Effective Date. This Resolution shall become effective immediately upon adoption by the Board of Directors and shall remain in effect until rescinded, or until Ordinance No. 91-02 is repealed. Section 6: Severability. If any portion of this Resolution or Ordinance 91-02 is found to be unconstitutional or invalid, the District hereby declares that it would have enacted the remainder of this Resolution regardless of the absence of any such invalid portion. Section 7: California Environmental Quality Act. The provisions of this Resolution and Ordinance 91-02 are exempt from the provisions of the California Environmental Quality Act as an action to mitigate emergency conditions and as a rate setting measure pursuant to the Public Resources Code Sections 21080(b)(4) and 21080(b)(8), respectively; and in following with the Notice of Exemption filed by the Metropolitan Water District of Southern California on January 8, 1991, as lead agenc a establis ent e delivery conservation programs for wa r elivere the nicipa ater District of Orange County. Section 8: Rescind Conflicting Resol ion. Resolution No. 91-12 is hereby rescinded. PASSED AND ADOPTED this 9th day of April, by the ollowing called vote: AYES:5-0 Paul Armstrong, Sterling ~992 o oy Kna Jr. C rl Scanlin NOES: 0 d Ar r C . Korn ABSENT: 0 ABSTAIN: 0 CCU ~ _ Zy "Z-CIS. ~ President, Paul R. Arms among Yorba Linda Water District ATTEST Secretary, Wi iam 'J. Robertson Yorba Linda Water District PASSED AND ADOPTED this 21" day of December, 2000, by the following called vote: AYES: Barbre, Beverage, Korn NOES: Armstrong, Abramowitz ABSENT: None ABSTAIN: None President, Paul R. Armstrong Yorba Linda Water District Yorba Linda Water District RESOLUTION NO. 00-15 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT ADOPTING THE 2000 UPDATE OF THE URBAN WATER MANAGEMENT PLAN AND RESCINDING RESOLUTION NO. 95-20 WHEREAS, in semi-arid southern California it is imperative that every reasonable measure be taken to manage precious local and imported water supplies; and, WHEREAS, in 1985 the Board of Directors adopted the Yorba Linda Water District Urban Water Management Plan in accordance with the requirements of the Urban Water Management Plan Act of 1983; and, WHEREAS, the Board of Directors adopted an update to the Urban Water Management Plan in January 1991; and, WHEREAS, the Board of Directors adopted the Water Shortage Contingency Plan in March 1992 to meet water shortage contingencies within the Yorba Linda area; and, WHEREAS, the Board of Directors adopted an update to the Urban Water Management Plan in December 1995; and, WHEREAS, the Yorba Linda Water District Urban Water Management Plan incorporates by reference regional plans approved by the Metropolitan Water District of Southern California and Municipal Water District of Orange County; and, WHEREAS, the Yorba Linda Water District Urban Water Management Plan was adopted at a properly noticed public hearing. NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba Linda Water District as follows: Section 1. The Board of Directors acknowledges the essential nature of water management with the District and adopts the 2000 update to the Urban Water Management Plan. Section 2. The Board of Directors supports the water management efforts adopted by the Metropolitan Water District of Southern California and Municipal Water District of Orange County in their regional plans. RESOLUTION NO. 05-13 RESOLUTION OF THE BOARD OF DIRECTORS OF YORBA LINDA WATER DISTRICT ADOPTING THE 2005 UPDATE OF THE URBAN WATER MANAGEMENT PLAN WHEREAS, in semi-arid Southern California it is imperative that every reasonable measure be taken to manage precious local and imported water supplies, and WHEREAS, the Board of Directors of Yorba Linda Water District adopted an Urban Water Management Plan in 1985 pursuant to the requirements of the Urban Water Management Plan Act of 1983, and WHEREAS, the Board of Directors adopted an update to the Urban Water Management Plan in 1990, 1995 and 2000, and WHEREAS, the purpose of the plan is to provide a perspective and analysis of current and alternative water management activities of the District, and WHEREAS, the Yorba Linda Water District Urban Water Management Plan incorporates by reference regional plans approved by the Metropolitan Water District of Southern California and Municipal Water District of Orange County, and WHEREAS, Yorba Linda Water District is required to update the Urban Water Management Plan at five year intervals in accordance with Section 10621 of the Urban Water Management Planning Act. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Yorba Linda Water District as follows: Section 1. The Board of Directors acknowledges the essential nature of water management with the District and adopts the 2005 update to the Urban Water Management Plan. Section 2. The Board of Directors of Yorba Linda Water District supports the water management efforts adopted by Metropolitan Water District of Southern California and Municipal Water District of Orange County in their regional plans. PASSED AND ADOPTED this 22nd day of December 2005 by the following called vote: AYES: Armstrong, Beverage, Collett, Mills, Summerfield NOES: None ABSENT: None ABSTAIN None President, Mi ael J. Beverage Yorba Linda Water District ATTEST: e ,;io/" cretary, Michael A. Payne Assistant Secretary, Kenneth R. Vecchiarelli Yorba Linda Water District ITEM NO. 5 The Orange County Register LETTERS TO THE EDITOR • Great Park values are skewed The Irvine City Council needs to do its job and seek val- ue, not high wages for the Great Park work ahead ["Coun- cil delays decision on Great Park prevailing wage," Local, June 28]. It seems the rules of "implied value" in Marketing 101-Sim- ply because something. "costs" more, it must be better - are in play behind the council's cham- ber doors. Everyone reading this knows that is not always true; why don't the Irvine coun- cil members know it? Their task should not be to seek out the highest "wage pay- er" for the work ahead just be- cause we taxpayers will be foot- ing the bill, but rather seek out the best qualified firms to do the job, getting the best value • for the money spent, having faith that they are compensat- ing their people properly as they have to do in order to keep them in the supercompetitive marketplace we all fight to sur- vive in. Simply paying people more money per hour does not get a better product or even get it faster. The labor unions have shown us this time and again, as their projects continually cost more and more and take longer and longer. There is ab- solutely no guarantee that higher wages means better training or more timely deliv- ery on projects, as some in your article suggested. It seems like the Irvine City Council just doesn't want to do its due dili- gence in hiring the right firms, the ones that will bring the greatest value to the park, the ones that we taxpayers and this community deserve. According to your article, Councilman Larry Agran ar- gues that "lower wage-paying firms are able to underbid more qualified contractors." His aim should be to only in- vite and accept bids from "qualified" contractors. Why does he even suggest they en- tertain non-qualified bidders? How does he know that paying a higher wage equates to be- ing better qualified? It is most- ly true, but not when you make it "the rules by which to operate," the only ones that apply to get in the door - in that case, then all parties must play by these rules, pay the higher wages, to be in the running, whether they are qualified to be so or not. Sim- ply show me that you pay the prevailing wage - earn my re- spect! Right. As Councilman Sukhee Kang suggests, "You get what you pay for" is true to a point. But you can also be duped intc paying much more than what .is appropriate or necessary, which is the picture being painted here. Simply make it the rule of engagement, appar ently the only one, and what else do they expect to get? Councilwoman Christina Shea seems to be the only voice of reason as she says that idea that "unless you pay prevailing wages, you are go- ing to get junk is not the truth." Superior value exists, always has and always will without the heavy union-guid- ed hand of organized labor. This country's foundation was established on fair busi- ness practices. Atop that foun- dation, we have built very few "prevailing wage" projects in comparison to all that has been built. Look around, enjoy the view - without the ugly spin of the prevailing winds of mandated wages and their "implied" level of quality and service. Daniel MacLeith Garden Grove 0 REGISTER FILE PHOTO BARELY LAUNCHED: So far the Great Park Balloon is the only completed Great Park project of those planned. ITEM NO. 6 Barry S. Brokaw Donne Brownsey Sacramento Advocates, Inc. James D. Stassi • A California based Public Affairs and Governmental Relations Firm Daniel E. Boatwright 1215 K Street, Suite 2030 ■ Sacramento, CA 95814 General Counsel Phone (916) 448-1222 ■ Fax (916) 448-1121 MEMORANDUM To: Yorba Linda Water District Board of Directors From: Barry Brokaw for Sacramento Advocates, Inc. Re: State Capitol Update Date: July 7, 2008 Overview The start of the State's new fiscal year has begun with no state budget. Of course, in 17 of the past 20 years, the budget has been enacted past the July 1 constitutional deadline. The likelihood of a prolonged standoff in the Legislature seems unavoidable this year. Legislative Democrats led by Senate Democratic leader Don Perata of Oakland and new Assembly Speaker Karen Bass of Los Angeles insist they won't tolerate the kind of spending cuts and borrowing that Gov. Arnold Schwarzenegger and legislative Republicans are calling for - even if it means budget talks drag into August or beyond. Neither side is lacking for resolve at this time. i The state faces at least a $15.2 billion deficit in the new fiscal year, on a total projected General Fund budget of just over $100 billion. Despite that crisis, most legislators are back in their districts. The four Democratic and Republican legislative leaders remain in Sacramento to continue budget negotiations. Rank-and-file legislators have been told to be available to return to the capital within three hours. The Senate will be in session three days during July and its Appropriations Committee will meet twice. The Assembly is maintaining essentially the same schedule. Not much work is expected during the month-long "summer break." The State Controller and Treasurer have informed the Governor and legislators that California will actually run out of cash by August, meaning the state would have to secure revenue anticipation warrants to pay its bills. It would have to pay a premium of possibly hundreds of millions of dollars to secure the cash. Avoiding the cash borrowing will require a breakthrough difficult to imagine given the partisan divide gripping the Capitol. Democrats have reached their limit on cutting services - about $5 billion thus including borrowing and delays - and they have proposals to generate about $11 billion by raising taxes and closing tax loopholes. The Senate and Assembly Republican leaders - Dave Cogdill and Mike Villines - have repeatedly said the Democrats' stance won't yield an agreement. Aside from deeper cuts and no new taxes, Republicans want a spending cap and a bigger budget reserve. • Water Bond Part of A Budget Deal? There have been no developments since the June Report, but there is still buzz around the Capitol that a water bond storage deal will be a part of the ultimate solution. Democrats would seek some "revenue enhancements" (meaning some temporary new taxes and tax loophole closures) in exchange. Bills of Interest AB 2175 (Laird) Water conservation. (A-07/01/2008 html pddf) Summary: Existing law requires the Department of Water Resources to convene an independent technical panel to provide information to the department and the Legislature on new demand management measures, technologies, and approaches. "Demand management measures" means those water conservation measures, programs, and incentives that prevent the waste of water and promote the reasonable and efficient use and reuse of available supplies. This bill would require the state to achieve a 20% reduction in urban per capita water use in California by December 31, 2020. The bill would require the state to reduce per capita use by at least 5% on or before December 31, 2012, and by 10% on or before December 31, 2015. By December 31, 2020, each urban retail water supplier would be required to achieve a minimum reduction from the base daily per capita water use, as • specified. The bill would also require each urban water supplier to achieve at least 25% of the targeted per capita reduction on or before December 31, 2012, and 50% on or before December 31, 2015. This bill contains other related provisions and other existing laws. Note: The state DWR would be authorized to set water conservation standards or guidelines under this proposal. Status: 07/01/2008-Read second time, amended, and re-referred to Com. on APPR. AB 2270 (Laird) Recycled water: water quality. (A-06/12/2008 html pdf) Summary: Existing law establishes a statewide recycling goal of 700,000 acre-feet of water by 2000 and 1,000,000 acre-feet of water by 2010. Existing law requires the Department of Water Resources to prepare and update every 5 years the California Water Plan, which is the plan for the orderly and coordinated control, protection, conservation, development, and use of the water resources of the state. Existing law requires each urban water supplier to prepare, and update every 5 years, an urban water management plan with specified components, including information, to the extent available, on recycled water and its potential for use as a water source in the service area of the urban water supplier. This bill would refer to the statewide recycling goals as targets, and would require the department to update these targets every 5 years, based on consideration of all relevant information, including, but not limited to, specified information from appropriate regional boards and urban water management plans. The department would be required to include the revised targets in the • California Water Plan beginning in 2013. The bill would require an urban water supplier to include in its urban water management plan information on recycled water, including, in acre-feet of water 2 per year, a description of the quantity of treated wastewater that meets recycled water standards, a description and quantification of the potential uses of recycled water, and the projected use of recycled water within the supplier's service area. This bill contains other related provisions and other existing laws. Note: Water recycling targets could be set under this measure by the Department of Water Conservation. Status: 06/24/2008-From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 7. Noes 1.) . SB 732 (Steinberg) Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006. (A-09/07/2007 html pdf) Summary: (1) The Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006, an initiative statute approved by the voters at the November 7, 2006, statewide general election, among other things, makes $580,000,000 in bond funds available for improving the sustainability and livability of the state's communities through investment in natural resources. This bill would require the various departments that are to implement the provisions of the initiative, among other things, to develop and adopt guidelines and regulations, consult with other entities, conduct studies, and follow certain procedures for establishing a project, or grant or loan program implementing the initiative. This bill contains other related provisions and other existing laws. Note: This bill enacts provisions to develop and implement several new programs for which funding is made available under the Safe is Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006 (Proposition 84), including programs for nature education facilities and museums, statewide water planning and design, and a new sustainable communities and climate change reduction program. The bill is controversial because it combines Proposition 84 implementation with preferences for communities that adopt aggressive greenhouse gas emission reduction programs. The development community is very concerned about this bill and the Administration does not support the measure at this time. Status: 09/10/2007-Placed on inactive file on request of Assembly Member Bass. • 3 MEMORANDUM To: Board of Directors Mike Payne, General Manager Yorba Linda Water District From: Christopher Townsend, President Sean Fitzgerald, Southern California Director Heather Dion, Senior Associate Date: July 10, 2008 Subject: 2008 Action Plan Update - Activity Report FY 09 Federal Appropriations Action Items This Past Month: We remain in close contact with Congressman Miller and Congressman Calvert's offices, as well as staff from the House Interior Appropriations subcommittee. Though the subcommittees have announced tentative schedules for mark-up of their bills on a couple of occasions, each time those meetings have been delayed. As of now, there has not been a revised schedule released. Through our continuing contact with Sen. Feinstein's office, we have recently unearthed a new potential source of funding. Sen. Feinstein has requested $910 million in funding through the Senate Interior Appropriations Committee for "fire fighting, prevention and rehabilitation". While this funding has yet to be finalized, it would create an excellent potential funding source for the fire prevention aspects of the Highland Reservoir project. TPA and Federal Advocates are now further assessing this opportunity with Sen. Feinstein's staff and will advise YLWD staff on how to capitalize on his opportunity. Water Resources Development Act (WRDA) Authorization Action Items This Past Month: • Neither the House nor Senate has started the appropriations process for the reauthorization of last year's WRDA bill. This process will likely occur later this year. We remain in contact with Congressman Miller's staff, with whom we filed the original request. Proposition 50 CDPH Grants Action Items This Past Month: We continue to regularly contact CDPH regarding the release of the Project Priority List for these grants, but still have not been given a specific timeline. Prop. 84 Svnthetic Turf Reolacement/Water Use Efficiency Fundinq Action Items (Timeline/Status): • As described in past updates, these competitive grants will commence once the Legislature appropriates funding in the budget. TPA has been in close contact with Senate and Assembly budget leadership, including Senate President Don Perata and Speaker Karen Bass and their respective staffs to advocate for appropriation of these funds. The budget update below provides additional information on the progress of the overall budget. State Budget Update On June 8' , the budget conference committee completed their work on the 2008-09 State budget. In total, the conference committee met for over four weeks and was able to reconcile the hundreds of differences between the Assembly and Senate versions of the budget. During their final meeting, the conference committee took action on the long awaited revenue solutions. Unlike the Governor's proposed May Revise, the conference committee did not rely on the securitization of the lottery to provide significant one time revenue to the State. Instead, the joint committee proposed a series of tax increases to generate an estimated $9.7 billion for use in closing the current $15 billion deficit. Specifically, the proposed revenue solutions include: • The reinstatement of a 10% tax bracket for taxpayers with joint returns above $321,000 and 11% for joint returns above $642,000. It is anticipated that this will generate $5.6 billion. • Better enforcement of current tax laws, which will generate $1.5 billion. • Suspend (for three years) businesses' ability to carry a portion of their tax deductible losses to following fiscal years, which will generate $1.1 billion. • A repeal of a tax adjustment for middle and upper-income taxpayers, which will generate $815 million. • Restoration of a higher tax bracket for businesses (which existed prior to 1997), which will generate $470 million. • Repealing the dependent child credit for high-income earners, which will generate $215 million The revenue solutions were adopted by the conference committee on a party-line vote, with the Republican members of the committee opposed. It is widely believed that neither the Governor nor the legislative Republicans will be supportive of the conference committee's proposed solutions; however, it does provide a good indication of how the legislative Democrats believe the budget deficit should be addressed. Now that the conference committee has concluded its work, the four legislative leaders (the Big 4) will continue to meet and try to reach a compromise on the remaining points of contention and craft a budget that can secure a 2/3 vote of each house of the legislature. These negotiations will undoubtedly include the above-mentioned revenue solutions. While the constitutional deadline for a budget has passed, there will likely be pressure to agree on a budget prior to the beginning of August because the State Controller has indicated that the State will likely run out of cash at that point. If the State runs out of cash it will be forced to take out costly loans to cover mandatory costs, while other services, vendors, and State employees will not be paid at all.