ITEM:		PUBLIC HEARINGS
14.	CONSIDER FIRST READING OF ORDINANCE NO. 129, AN ORDINANCE OF THE MONTEREY PENINSULA WATER MANAGEMENT DISTRICT ADDING THE REBATE PROGRAM TO THE RULES AND REGULATIONS OF THE DISTRICT, AMENDING THE REBATE AMOUNTS, EXCLUDING AREAS WITHIN THE DISTRICT THAT RECEIVE WATER FROM WATER DISTRIBUTION SYSTEMS NOT REGULATED BY THE DISTRICT FROM THE REBATE PROGRAM, AND ADDING REBATES FOR CERTAIN WATER SAVING IRRIGATION SYSTEM RETROFITS
Meeting Date:			July 16, 2007	Budgeted:	Yes
From:			David A. Berger	Program/		4-2-4
			General Manager	Line Item No.:
Prepared By:			Stephanie Pintar	Cost Estimate:	$200,000
General Counsel Approval: Reviewed by Counsel
Committee Recommendation: By a vote of 3-0 on June 26, 2007, the Water Demand Committee supported the proposed rebate program amendments. The Technical Advisory Committee recommended the amendments to the Board during its June 29, 2007 meeting.
CEQA Compliance: Categorical exemption under Class I, §15301

SUMMARY: Draft Ordinance No. 129 (Exhibit 14-A) adds the District’s Rebate Program to the Rules and Regulations, updates the rebates available to equate the water savings benefit to the rebate amount, excludes areas within the District that receive water from systems outside the District (i.e. former Fort Ord lands) and adds rebates for water saving irrigation system retrofits.

Outdoor water use has been targeted by the District and California American Water as an area where significant water savings can still be achieved. To reduce outdoor water use, District staff is proposing the addition of Smart Controllers, Rain Sensors and Soil Moisture Sensors to the list of qualifying devices in the joint MPWMD/California American Water rebate program. As part of this ordinance, staff is proposing changes in the amount of rebate issued for installation of the existing qualifying devices based on the cost/benefit of the appliance.

The Water Demand Committee discussed this item at its June 26, 2007 meeting. In addition to supporting the proposed addition of rebates for Smart Controllers, Rain Sensors and Soil Moisture Sensors, the committee made extensive recommendations on proposed increases in the current rebate amounts. The Water Demand Committee’s rebate recommendations are in the proposed ordinance.

The Technical Advisory Committee reviewed the proposed changes to the rebate program on June 29, 2007. The TAC unanimously supports the proposed amendments and the inclusion of the program in the District’s Rules and Regulations.

The rebate program is jointly funded with California American Water and is funded for $200,000 for fiscal year 2007-2008. The District administers the program and tracks the retrofits and water savings that occur. California American Water has expressed support for the proposed increases in the rebate amounts as water savings associated with replacement of older fixtures with ultra-low water consumption technology contributes to both entities’ conservation goals. Since January 1, 2007, the rebate program has increased estimated water savings in the California American Water system by 6.875 acre-feet per year. Since the inception of the program in 1997, more than 186 acre-feet of water has been saved.

This ordinance is exempt from CEQA as a categorical exemption under Class I, §15301 of the California Environmental Quality Act (CEQA). Class I exemptions are available for replacement of existing facilities. A Notice of Exemption will be filed in compliance with CEQA following adoption of the ordinance.

DISCUSSION: Automatic irrigation systems offer convenience and control in a landscape investment and help property owners keep their landscapes healthy and beautiful. However, most property owners tend to over-water their lawn or waste water through inefficient practices. Water savings achieved through irrigation system retrofits is essential to maintaining and extending the community's water supply, particularly during the current regulatory restrictions and during times of drought.

The key to efficient outdoor irrigation is applying just enough water only when necessary. Water-wise habits result in a healthier lawn and landscape, in addition to conserving water. Plus, reducing consumption reduces the user’s water bill. The proposed additions to the rebate program target outdoor water use by adding irrigation system components to make the system water-wise.

1. Smart Controllers, Rain Sensors and Soil Moisture Sensors

Smart Controllers use weather, site or soil moisture data as a basis for determining an appropriate watering schedule. Smart Controllers (commonly referred to as ET controllers, weather-based irrigation controllers, Smart sprinkler controllers, and water smart controllers) are a new generation of irrigation controllers that utilize prevailing weather conditions, current and historic Evapotranspiration, soil moisture levels, and other relevant factors to adapt water applications to meet the actual needs of the plants. Smart Controllers include sensor-based and signal-based irrigation controllers. Both types of controllers achieve significant water savings (up to 50 percent) over conventional controllers that receive no feedback on actual soil or weather conditions.

Staff is proposing that Smart Controller rebates be limited to Smart Controllers that meet minimum quality and dependability requirements. The Irrigation Association conducts tests on Smart Controllers and maintains a list of controllers that have met the criteria. The proposed ordinance includes a provision that the District will maintain a list of Smart Controllers that qualify for rebates and that this list will be regularly updated and posted to the website.

Rebates for Smart Controllers, Rain Sensors and Soil Moisture Sensors are proposed as follows:

· The rebate for a Smart Controller is recommended at $100 for up to four stations. An additional $10 rebate is available per station up to twenty (20) stations or the actual cost, whichever is less.

· The rebate for a Rain Sensor attached to an irrigation system controller shall be $25 or the actual cost, whichever is less.

· The rebate for installation and use of one or more Soil Moisture Sensor(s) on a conventional automatic irrigation system is recommended at $25 per sensor or the actual cost, whichever is less. Gypsum block soil moisture sensors do not qualify for rebate as they dissolve over time and disintegrate, reducing long-term water savings without regular replacement.

2. Adjustment of Existing Rebates for Installation of Water Conservation Appliances

Staff is recommending varying rebates for installation of other qualifying devices allowed by the rebate program based on the cost/benefit of the appliance. The Water Demand Committee reviewed staff’s preliminary recommendations and adjusted the rebate amounts to increase the incentive to install low water use appliances. The proposed adjustments are explained below:

· Washing machines are the highest water using appliance inside the home other than old high flush toilets. Older and less efficient washers use an average of 46 gallons of water per load. The joint District/California American Water rebate program currently reimburses a customer $100 for purchase and installation of a washing machine that uses less than 28 gallons per load. Staff is proposing two levels of rebates: $150 for machines that use 18.1 to 28 gallons and $200 for machines that use less than 18 gallons per load. The cost of these machines averages $850 for the 18.1-28 gallon models, and $1,000 for the 18 gallon maximum machines.

· Older (over 4 gallons per flush) toilets are the other highest indoor water use. The District has targeted the replacement of older toilets with ULF (ultra-low flush 1.6 gallons per flush) toilets for the past 20 years. As a result, there are not a large number of rebate applications received for replacement of older toilets with ULF toilets. However, the number of applications received for installation of HET models (i.e. High Efficiency Toilets with an average flush of 1.28 gallons) has increased. HETs function better and have significant water savings over the standard ULF toilet. The District/CAW rebate program reimburses a customer up to $100 for the initial purchase and installation of a ULF toilet when the retrofit is not required by the District. Staff is proposing two levels of toilet rebates: A maximum of $100 for ULF toilets, and a rebate of $150 for purchase and installation of High Efficiency Toilets. District records show that purchase and installation of ULF toilets average about $226 each, and purchase and installation of High Efficiency Toilets average about $318 each.

· Zero Water Consumption Urinals offer significant water savings over conventional urinals by saving the full quantity of water use of the older fixture. Zero Water Consumption Urinals are generally non-residential installations, with many installations occurring in institutional (i.e. high use) settings. Water savings associated with installation of Zero Water Consumption Urinals can be significant depending on the location of the urinal, particularly if the fixture is located in a public restroom. The payback period for Zero Water Consumption Urinals is one to four years, depending on the location. Zero Water Consumption Urinals cost an average of $530, not including installation and maintenance. Staff is proposing increasing the rebate for Zero Water Consumption Urinals from $100 to $200.

· Water savings associated with Instant-Access Hot Water Systems (IAHWS) vary depending on the existing plumbing layout and type of IAHWS installed. IAHWS are required in all new construction, and Monterey County requires IAHWS for remodels when the hot water heater is located over 10’ from the outlet. The current rebate is $100 for installation of a hot water demand pumping system, which is one type of IAHWS. Staff is proposing that rebates be offered for all IAHWS installations, other than those required in new construction. Based on the discussion of the Water Demand Committee on June 26, staff is proposing the following rebates for IAHWS:

· Staff recommends the rebate for installation of a recirculating Instant-Access Hot Water System be $200 per Site or the actual cost, whichever is less.

· Staff recommends the rebate for installation of an on-demand pump or point-of source water heater as part of an Instant-Access Hot Water System shall be $100 per component, to a maximum of two components per Site.

· Water savings of up to 50 percent can be anticipated with replacing older dishwashers with ultra-low consumption models. Older dishwashers use between 9-12 gallons per load at an average of 2.3 loads per week, where ultra-low consumption dishwashers use less than 8 gallons per load. Staff is proposing the rebate for purchase and installation of an ultra-low consumption dishwasher increase from $100 per appliance to $125 per appliance. Ultra-low consumption dishwashers cost approximately $650.

· Cisterns are currently rebated according to storage capacity. The cistern rebate varies from $25 for 100 gallons of storage to $750 for 3,000 gallons of storage. No change is proposed to the maximum cistern rebate.

RECOMMENDATION: It is recommended that the Board approve the first reading of Ordinance No. 129. If approved, second reading and adoption will be scheduled for the August 20, 2007 meeting.

IMPACT ON STAFF/RESOURCES: The cost impact of amending the Rebate Program is contemplated in the adopted Water Demand Division 2007/08 budget.

EXHIBITS

14-A Draft Ordinance No. 129

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