MEETING DATE: SEPTEMBER 18, 2000
 

SUMMARY: District Ordinance No. 95 was adopted on June 19, 2000, to allow only commercial-to-commercial water credit transfers of like kind to occur during a 90-day moratorium on water credit transfers. During this 90-day period, the effectiveness of the water credit program was to be reviewed. The proposed ordinance has been effective for 90 days and expires on September 19, 2000. The sunset date of the ordinance may be extended twice for periods of up to 90 days in the event that additional time is needed to review and research the issues related to water credit transfers. Time extensions to the ordinance require a majority vote of the Board at a regularly scheduled meeting.
 

During the past 90 days, staff has been compiling and checking water consumption information provided by the California-American Water Company (Cal-Am) to determine whether or not water use has been reduced as anticipated by the existing water credit transfer program. A preliminary report that was presented to the Board on March 20, 2000, indicated that the anticipated water savings from the program were not occurring. This information has been expanded to include 15 samples of documented Water Use Credits on file at the District. Of these, two sites have saved more water than anticipated and thirteen have saved less water than anticipated. Notably, water use increased on two sites after receipt of a documented Water Use Credit. An independent consultant is analyzing the information to confirm staff's findings. The draft Water Credit Program Analysis is included as Exhibit 1.
 

RECOMMENDATION: Due to scheduling conflicts with the consultant, DCI Inc., of Mesa, Arizona, additional time is needed to verify the findings made by staff. Staff recommends that the sunset date for Ordinance No. 95 be extended one time for 90 days to facilitate this independent review. Once the consultant has completed his analysis of the information, the Board should consider lifting the temporary suspension on receiving water credit transfer applications or taking further action to modify or discontinue the water credit transfer program. A report to the Board from the consultant should be available by the December 2000 board meeting.
 

BACKGROUND: At the January 27, 2000 meeting, the Board considered modifying the water credit transfer program to include residential uses. At the time, the key issue was whether current District rules, which allow the transfer of commercial water credits to another commercial site but prohibit the transfer of residential water credits to another residential site, should be amended. The Board did not take action at the January meeting other than to direct staff to set a public hearing for review of the water credit transfer ordinance at the February 24, 2000 board meeting.
 
 
 

At the February 24, 2000, board meeting, staff was directed to prepare a report on whether or not water demand has been reduced as a result of the existing water credit programs. The preliminary report that was presented on March 20, 2000, indicated that the anticipated water savings from the program were not occurring. Staff was directed at the March 20, 2000 meeting to continue researching the water savings associated with Water Use Credits and transfers and report back to the Board in 90 days.
 

District staff began an extensive data collection process following the March 20, 2000 board meeting. Cal-Am customer-specific data related to individual water consumption is proprietary and confidential information owned by Cal-Am. For the District to access this information, a non-disclosure agreement was necessary. The non-disclosure agreement was signed by both parties on June 7, 2000. This agreement allows the District access to Cal-Am's confidential customer consumption records for limited purposes on the condition that the District maintains confidentiality and agrees that information obtained from Cal-Am is the property of Cal-Am and will not be distributed to third parties.
 

Transfers of commercial water credits from an existing commercial use to an expanding commercial use in the same jurisdiction have been allowed since December 1993. In September 1995, Ordinance No. 79 modified the transfer rule to allow commercial credits to transfer into a jurisdiction's allocation. Once the water use credit is assigned to the jurisdiction's allocation, the water becomes available for use at the jurisdiction's discretion and can be used for residential and nonresidential uses, new connections, and remodels. All transfers require the authorization of the jurisdiction and the District, and the property owner must agree to transfer the water use credit and must agree to a deed restriction on the property.
 

Ordinance No. 95 was adopted on June 19, 2000. The ordinance allows only commercial-to-commercial water credit transfers of like kind during a 90-day moratorium on water credit transfers. The 90-day moratorium expires on September 19, 2000. Since adoption of Ordinance No. 95, the District has not received any applications to transfer water credits.

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