Meeting Date:           March 15, 2004                                  Budgeted: No

Program/Line Item No.:  N/A

Staff Contact:             Stephanie Pintar                                 Cost Estimate:  N/A

General Counsel Approval: N/A

Committee Recommendation: The Water Demand Committee recommended including safeguards for water use credit estimations in draft Ordinance No. 117 that will respond to concerns about the commercial water use factors.

CEQA Compliance: N/A

SUMMARY:  As the District moves forward with discussions about the Water Credit Transfer program, it is desirable to have the most accurate accounting measures in place to ensure that the calculated amount of water transferred, and eventually used at a receiving site, correlates with actual use.  The District’s commercial water use factors have historically provided the “best guess” of a projects former and future water capacity, without having to review and monitor actual water consumption records.  The current factors are outdated, and staff has suggested that updating the factors during the review of the water credit transfer processes is appropriate.  However, the cost of updating the factors is high--estimated at as much as $300,000--and funding for this project is presently unavailable.  In the event that funding to update the commercial water factors is not obtainable, staff has recommended including safeguards in the draft water credit transfer amendment ordinance to address this concern.


RECOMMENDATION:  No action is required at this time.  On March 9, 2004, the Water Demand Committee recommended including safeguards for water use credit estimations in draft Ordinance No. 117 to respond to concerns about the commercial water use factors.


HISTORY:  The Board received a recommendation on January 29, 2004 to update the commercial water use factors as soon as possible to facilitate accurate estimates of historic and future water demand.  The factors are outdated (more than 11 years old).  Updating the commercial water use factors was part of the Strategic Initiative approved by the Board in 2002 to “Revise the Water Permit Processes.”  In 2003, the Water Demand Committee recommended that staff pursue other components of the initiative before the factors were updated.  Staff was directed to improve the data management systems and prepare a policies and procedures manual.  Updating the commercial water use records was listed third, based on a number of potential difficulties in achieving the goal.


The District utilizes commercial water use factors derived from regional water use averages by type of use.  The factors were last updated in 1991-1992.  Obviously, much has changed since 1992.  Laws mandating toilet retrofits have been in place for more than 15 years.  The community has been through water rationing and is now restricted to 80 percent of its historic Carmel River use by SWRCB Order No. 95-10.  The local water company (Cal-Am) is required to promote Best Management Practices and new equipment and appliances that are much more water efficient.  Many factors are now in place that have changed the way water is used in the community.


The Water Use Credit Transfer Program utilizes the commercial water use factors to calculate credit available for transfer and to estimate the future demand of a receiving site.  If the factors are outdated, it is possible that the District is underestimating or overestimating the water demand associated with both the originating site and the receiving site.  It is prudent to have the most accurate factors available.  Therefore staff is recommending that the factors be updated at this time.  In addition, the current commercial water factors are a critical component in estimating new or expanding water demand.


Updating the District’s water factors will require extensive review and analysis.  The previous commercial water use surveys reviewed only limited information obtained through telephone surveys and reviewed the water consumption records available.  In most cases there were between two and five years of consumption history available.  In addition to reviewing water records and taking into consideration fluctuations in climate and business, a new survey should include on-site inspections to verify existing fixtures, equipment, training, landscaping and outdoor water uses and personnel. 


Staff’s 2002 estimate for completion of the commercial water use factor update was $125,000 and approximately 9-12 months.  Recent discussions with a consultant familiar with this type of work product revised that estimated to more in the range of $300,000 and taking a minimum of 9-12 months.  This assumes that Cal-Am consumption records are readily available and that the account holders and property owners are willing to participate in the study.  In 2002, staff noted that the Conservation Fund does not provide adequate resources to pursue the proposed objectives.  Funding remains an issue.  If the commercial water factor update is to be pursued, funding will have to be located, perhaps through a cost sharing with the local jurisdictions that will benefit from the updated factors.


Staff will be meeting with a consultant to further discuss updating the commercial water use factors on March 16, 2004.  At that time, staff may be able to obtain a better estimate of the costs to update the factors based on a variety of approaches.