ITEM:

ACTION ITEMS

7.

# STATUS REPORT ON PREPARATION OF A STUDY TO UPDATE COMMERCIAL WATER USE FACTORS

Meeting Date:

May 3, 2004

Budgeted:  No

Staff Contact:

Stephanie Pintar

Program/Line Item No.:  N/A

Cost Estimate:  $125,000 -$300,000

General Counsel Approval:  N/A

Committee Recommendation:  The Water Demand Committee reviewed this item at its April 13, 2004 meeting and recommended that updating the commercial water use factors be delayed until completion of the Water Demand Division database.

CEQA Compliance:  N/A

SUMMARY:  At the February 2, 2004 Board workshop, staff indicated that updating the commercial water use factors should be a component of revisiting water allocations and/or modifying the water credit transfer program.  The District’s commercial water use factors have historically provided the “best guess” of a project’s former and future water capacity, without having to review and monitor actual water consumption records.  The current commercial water factors were last updated in 1992, and staff is concerned that the factors no longer provide the most accurate estimates of a use’s future demand.  Updating the most frequently used commercial water factors would cost between $125,000 and$300,000.  The process could be taken in two steps, with the first step costing approximately $125,000. On February 19, 2004, staff was asked for an estimated cost of updating the commercial factors. Staff contacted PMCL @ CDM, a subsidiary of Camp, Dresser & McKee, Inc. PMCL offers resources and service offerings in water resources planning, economic analysis, and information management within both the federal and municipal government sectors. PMCL was the consultant who prepared the water savings analysis on the Presidio of Monterey’s water savings, which staff found to be both comprehensive and well written. District staff met with PMCL staff on March 16, 2004 to review the existing factors and to discuss the process for updating the commercial water use factors. As a result of this discussion, staff narrowed the scope of the project to updating the top 15 commercial water use factors. PMCL reviewed the information available from the District and prepared an estimate of the effort and cost to update the 15 more used commercial water factors. A copy of the draft concept paper is attached as Exhibit 7-A. It should be noted that there are many variables to consider in developing these cost estimates, many of which are unknown at this time, such as how many surveys are needed and the best method for collecting the information. Therefore, PMCL has indicated that these are “ballpark” figures. RECOMMENDATION: The Board should consider whether to direct staff to include funds to complete the first phase of the commercial water use factors update in the fiscal year 2004-2005 budget. The Board may also consider imposing an additional fee on commercial water permit applications and applications to transfer water credits to offset a portion of the costs of updating the factors. Finally, it would be in the interests of the jurisdictions to update the factors, particularly as the current factors do not necessarily include conservation requirements. Revised factors are likely to be lower than the current factors. The jurisdictions could be asked to fiscally support the project. However, when this subject was broached with the TAC/PAC, there did not seem to be support from the jurisdictions to fund an update. The Water Demand Committee reviewed this item at its April 13, 2004 meeting and recommended that updating the commercial water use factors be delayed until completion of the Water Demand Division database. The new database, which will be completed during fiscal year 2004-2005, will provide easier access to information necessary to conduct the commercial water use factor survey. Funds are included the fiscal year 2004-2005 budget for the database project. BACKGROUND: 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 factors 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 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 commercial 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.

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