ITEM:		PUBLIC HEARING
14.	CONSIDER REQUEST FOR VARIANCE FROM WATER METER REQUIREMENTS (DISTRICT RULE 23-A) – DESIGN CENTER, LLC, 600 ORTIZ AVENUE, SAND CITY (APN 011-236-026)
Meeting Date:			February 22, 2007	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Pintar	Cost Estimate:	N/A
General Counsel Approval: This report has been reviewed by Counsel.
Committee Recommendation: N/A
CEQA Compliance: MPWMD is a responsible agency.  Sand City, the lead agency, approved the Design Center project with a Mitigated Negative Declaration.

SUMMARY: Design Center, LLC is requesting Board approval of a variance to District Rule 23 to allow a single California American Water connection to supply water to a mixed-use (i.e. commercial and residential) project at 600 Ortiz Avenue (formerly 625 Elder Avenue), Sand City. The project consists of 27,457 square-feet of retail/office, 1,627 square-feet of deli use, 11 one-bath residential units, 8 one and one-half bath units, and 12 two-bath units. Ten units will be designated affordable housing. The applicant asserts there are special circumstances which merit consideration of a variance to the District’s California American Water metering requirement for this project. According to the applicant, the requirement to install individual water meters at the street for this project would substantially increase the project costs and increase water and energy demand, creating a hardship which could jeopardize the project. The applicant has agreed to install electronically monitored in-line water meters to track individual tenant’s water use, thereby not defeating the purpose of the metering regulation. Design Center’s variance application and a supplemental letter to the application (dated February 7, 2007) are provided as (Exhibit 14-A).

District Rule 23-A-1-i (Exhibit 14-B) requires that each water user have a separate water meter. This rule requires installation of a water meter owned by the California American Water Company for each new user within their service area. A “user” is defined as a customer or consumer of water, and includes each residence and every non-residential enterprise that has water uses. District Rule 90, Variance, states that “the Board may, after holding a public hearing, in specific cases, grant a variance from any provision of the standards incorporated in these Rules and Regulations whenever it finds: (a) that special circumstances exist in a particular case, and (b) that practical difficulties or unnecessary hardship would result from the strict interpretation and enforcement of any such standards, and (c) that the granting of such a variance would not tend to defeat the purposes of these Rules and Regulation”.

District Rule 23-A-1-i, requiring individual water meters, was adopted to encourage conservation by making each water user accountable for their consumption. Individual water meters also facilitate compliance with water use reductions during rationing periods. Design Center, LLC has indicated its willingness to install in-line water meters for each user. The proposed action to sub-meter the units supports the District’s goals. The City of Sand City’s Community Development Department supports the applicant’s request for the use of a master California American Water meter for the project. The City of Sand City is a co-sponsor of the project, and a letter of support is attached as (Exhibit 14-C).

The District is a responsible agency under the California Environmental Quality Act (CEQA) (§15096 of the CEQA Guidelines). As such, the District must consider the Initial Study and Negative Declaration prepared by the lead agency (Sand City) (Exhibit 14-D), and then reach its own conclusions on whether and how to approve the project involved. In making this determination, the District (as the responsible agency) must mitigate or avoid only the direct or indirect environmental effects that relate to any matters within its jurisdiction. Water to serve this project is available in the City of Sand City’s water allocation.

RECOMMENDATION: Staff recommends the Board approve the variance with the following conditions:

1. The applicant shall install two water meters: One for exterior uses and one for interior uses.

2. The applicant shall install and maintain in-line meters for each tenant/occupant.

3. The applicant shall provide access to water consumption records to the District.

4. Deed restrictions explaining the conditions shall be recorded on the title of the property.

Staff recommends the Board adopt the Findings of Approval attached as (Exhibit 14-E).

Finally, staff recommends the Board consider and approve the attached Negative Declaration (Exhibit 14-F). Prior to taking action, the Board should review the Negative Declaration prepared by the City of Sand City Planning Department and adopted on April 26, 2005 by the Redevelopment Agency of Sand City. The Board should find that the Negative Declaration is adequate and that there are no mitigations within the jurisdiction of the Monterey Peninsula Water Management District. Upon approval of the Negative Declaration (Exhibit 14-F), staff should be directed to file a Notice of Determination with the County Recorder.

BACKGROUND: There have been six similar situations where the District Board has granted variances to allow in-line water meters: (1) the use of one meter for each building was authorized by the Board for the Pacific Meadows senior housing complex in Carmel Valley; (2) individual in-line meters have been used at the Naval Postgraduate School for new buildings on the main campus; (3) Santa Catalina School received a variance from the separate water meter requirement for new dormitory/faculty apartments with the condition that the school install in-line meters to monitor water use; (4) the City of Monterey received a variance from the separate water meter requirement for the Osio Plaza low to moderate-income housing units; (5) South County Housing Corporation received approval of a variance to allow a single California American Water connection to supply water to 49 low-income senior housing units; (6) PRI, LLC received a variance to allow a single California American Water connection to supply water to 18 affordable housing units.

EXHIBITS

14-A Variance Application and Supplemental Letter from Applicant (dated February 7, 2007)

14-B District Rule 23-A

14-C Letter from Sand City

14-D Initial Study

14-E Findings of Approval

14-F Proposed Negative Declaration

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