EXHIBIT 18-A

2nd Reading Draft

ORDINANCE NO. 140

AN ORDINANCE OF THE BOARD OF DIRECTORS

OF THE

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

AMENDING THE REBATE PROGRAM AMOUNTS, DELETING 1.6 GALLON PER FLUSH TOILETS FROM THE REBATE PROGRAM, AND ADDING REBATES FOR LAWN REMOVAL, SYNTHETIC TURF INSTALLATION, AND OTHER COMMERCIAL/INDUSTRIAL/INSTITUTIONAL RETROFITS

FINDINGS

1. The Water Management District is charged under the Monterey Peninsula Water Management District Law with the integrated management of the ground and surface water resources in the Monterey Peninsula area.

2. The Water Management District has general and specific power to cause and implement water conservation activities as set forth in Sections 325 and 328 of the Monterey Peninsula Water Management District Law.

3. The Water Management District approved a toilet replacement Rebate Program when it adopted the Action Plan for Water Supply Alternatives in February 1996. The Action Plan addressed the need for water supply projects to meet the water supply needs of the Monterey Peninsula following voter rejection of District financing for the New Los Padres Water Supply Project in November 1995.

4. California State Water Resource Control Board (SWRCB) Order No. WR 95-10, issued in July 1995, ruled that California American Water did not have a legal right to take approximately 69 percent of the water supplied to California American Water users at that time. The SWRCB has set specific goals to reduce water diversions from the Carmel River Basin.

5. Under SWRCB Order No. WR 95-10, California American Water was ordered to reduce its historical diversion from the Carmel River Basin by 20 percent beginning with Water Year 1997 and in each subsequent year.

6. California American Water v. City of Seaside, et al, Case No. M66343, resulted in a decision which determined the initial Operating Safe Yield for the Seaside Basin is 5,600 Acre-Feet (Coastal Subarea is 4,611 Acre-Feet and 989 Acre-Feet for the Laguna Seca Subarea). “Operating Safe Yield” is the maximum amount of Groundwater resulting from Natural Replenishment which can be produced from each Subarea for a finite period of years as these terms are defined in the decision. Water conservation is a component to achieving Operating Safe Yield.

7. The Rebate Program contributes to water savings throughout the MPWMD. It is estimated that as of October 1, 2009, the Rebate Program saves 226 Acre-Feet Annually.

8. California American Water is a co-sponsor of the Rebate Program. Funding for this program is made available through rates paid for water approved by the California Public Utilities Commission (CPUC).

9. Retrofitting of properties located in the Monterey Peninsula Water Resource System benefits the Monterey Peninsula by reducing over-pumping of Groundwater that leads to environmental degradation.

10. Retrofitting of properties receiving water from the Seaside Groundwater Basin benefits the Monterey Peninsula by reducing over-pumping of Groundwater that leads to environmental degradation.

11. The Rebate Program supports the MPWMD’s Mission to manage, augment and protect water resources for the benefit of the community and the environment.

12. The Rebate Program supports the District’s legislative function to conserve water.

13. The current cost (August 2009) of producing one acre-foot of water in the California American Water Distribution System is $1,200. The cost of water shall be used to determine the appropriate rebate for Commercial/Industrial/Institutional (CII) Rebates not specifically identified in this ordinance.

14. This ordinance shall delete the rebate for Ultra-Low Flush Toilets, as the State of California standard for water efficient toilets is changing to High Efficiency Toilets (HET) and the District supports the state-of-the-art proven technology of HET. Beginning in 2010 the legislation (AB 715) will require 50% of all toilets sold in California to meet the new flush standards, ramping up to 100% in 2014.

15. Funding for the Rebate program in the California American Water system is provided through CPUC.

16. Funding for Rebates is one component of a conservation plan and budget approved by the CPUC in 2009. The conservation plan goal is to save 400-800 acre-feet of water between 2009 and 2012.

17. Funding for the Rebate program in other areas of the MPWMD is provided by MPWMD funds and may be augmented by other Water Distribution Systems.

18. This ordinance shall amend and republish District Rule 11, Definitions; District Rule 141, Water Conservation Rebates; Table 1 Residential Fixture Unit Count Values; and Table 4, Ultra Low Consumption Appliance Credits.

19. This ordinance adds the following definitions to Rules 11, Definitions: Cooling Tower Conductivity Controller, Consortium for Energy Efficiency, High Efficiency Urinal, Lawn, Pint Urinal, Rotating Sprinkler Nozzle, Synthetic Turf, Water Broom, Water Efficient Ice Machine and Water Factor.

20. This ordinance shall amend the following terms as used throughout the Rules and Regulations of the District: High Efficiency Toilet, Ultra-Low Consumption Appliance Credit, Ultra-Low Consumption Dishwasher and Ultra-Low Consumption Washing Machine.

21. The replacement of existing facilities is a categorical exemption under Class I, §15301 of the California Environmental Quality Act (CEQA). A Notice of Exemption has been filed in compliance with CEQA.

NOW THEREFORE be it ordained as follows:

ORDINANCE

Section One: Short Title

This ordinance shall be known as the 2009 Rebate Program Amendment Ordinance of the Monterey Peninsula Water Management District.

Section Two: Statement of Purpose

The Monterey Peninsula Water Management District enacts this ordinance to expand the standards for the Rebate Program as set forth in Regulation XIV with the goal of providing an incentive to encourage water saving retrofits that might not otherwise occur and by incentivizing retrofits prior to mandatory deadlines. Participation in the Rebate Program is voluntary. The Rebates offered by this program are available only to the extent budgeted and may be modified or rescinded by action of the Board of Directors.

Section Three: Definitions

1. Unless the context specifically indicates otherwise, the following words or phrases shall be given the definitions set forth below and shall be permanently added to or deleted from Rule 11, Definitions, of the Rules and Regulations of the District. New and revised text is shown in bold italics (bold italics) and deleted text is shown in strikeout (strikeout). Numbering is provided for ease of review.

a. COOLING TOWER CONDUCTIVITY CONTROLLER – “Cooling Tower Conductivity Controller” shall mean a device to measure the conductivity or Total Dissolved Solids (TDS) of water in a cooling system that controls incoming feed and outgoing bleed or discharge water in cooling systems.

b. CONSORTIUM FOR ENERGY EFFICIENCY – “Consortium for Energy Efficiency” (CEE) shall refer to the nonprofit public benefits corporation that develops initiatives for its North American members to promote the manufacture and purchase of energy-efficient products and services. CEE members include utilities, statewide and regional market transformation administrators, environmental groups, research organizations and state energy offices in the U.S. and Canada. Also contributing to the collaborative process are CEE partners – manufacturers, retailers and government agencies. The U.S. Department of Energy and Environmental Protection Agency both provide support through active participation as well as funding.

c. HIGH EFFICIENCY TOILET (HET) – “High Efficiency Toilet” or “HET” shall mean a toilet that is designed to flush at 20 percent below a 1.6-gallons-per-flush Ultra-Low Flush Toilet. A High Efficiency Toilet shall have an maximum average flush of less than 1.283 gallons.

d. HIGH EFFICIENCY URINAL – “High Efficiency Urinal” shall mean a Urinal designed to flush with a maximum of 0.5 gallon per flush.

e. LAWN – “Lawn” shall mean an area of land planted with live, healthy grass which is regularly maintained, irrigated and groomed at a low, even height.

f. PINT URINAL – “Pint Urinal” shall mean a Urinal designed and manufactured with a maximum of one pint (0.125 gallons per flush) of water.

g. ROTATING SPRINKLER NOZZLE – “Rotating Sprinkler Nozzle” shall mean a multi-trajectory, revolving stream spray head that applies Irrigation System water at a slower rate and more uniformly than conventional sprays.

h. SYNTHETIC TURF – “Synthetic Turf” shall mean a grass-like permeable surface covering that replicates lush natural grass in appearance and function. 

i. ULTRA-LOW CONSUMPTION HIGH EFFICIENCY APPLIANCE CREDIT – “Ultra-Low Consumption High Efficiency Appliance Credit” shall mean a Water Use Credit granted for the installation of ultra-low consumption water efficient appliances in Residential uses.

j. ULTRA-LOW CONSUMPTION HIGH EFFICIENCY DISHWASHER - “High Efficiency Ultra Low Consumption Dishwasher” shall mean a Dishwasher designed to use a maximum of 7.66 5.8 gallons during every complete per cycle. A High Efficiency Dishwasher shall have Energy Star certification.

k. ULTRA-LOW CONSUMPTION HIGH EFFICIENCY WASHING MACHINE CLOTHES WASHER - “Ultra-Low Consumption High Efficiency Clothes Washer (or HEW) Washing Machine” shall mean a Washing Machine Clothes Washer designed to use a maximum of 28 gallons during every complete cycle with a Water Factor of 5.0 or less.

l. WASHING MACHINE CLOTHES WASHER – “Washing Machine Clothes Washer” shall mean an appliance for washing clothing or other textiles.

m. WATER BROOM – “Water Broom” shall mean a water efficient broom-like cleaning device that uses a combination of water and air to clean hard surfaces with no runoff. 

n. WATER EFFICIENT ICE MACHINE – “Water Efficient Ice Machine” shall mean a commercial ice machine that meets or exceeds Energy Star standards for air-cooled Ice machines.

o. WATER FACTOR – “Water Factor” shall mean a rating of water efficiency established by the U.S. Environmental Protection Agency and the U.S. Department of Energy through the Energy Star program. The Water Factor is the number of gallons per cycle per cubic foot that the washing machine uses. The lower the water factor, the more efficient the washer is.

2. Revisions to definitions shall apply throughout the Rules and Regulations of the District. All defined terms shall be replaced with revised terms as adopted in this ordinance.

3. District Rule 24, Table 1, Residential Fixture Unit Count Values and District Rule 25.5, Table 4, shall be amended to reflect water use criteria for High Efficiency Dishwashers, High Efficiency Toilets and High Efficiency Clothes Washers.

Section Four: Retroactive Rebates for Lawn Removal and Installation of Synthetic Grass, High Efficiency and Pint Urinals, and Rotating Sprinkler Nozzles

Rebates for Lawn removal, Synthetic Turf and Qualifying Devices added by this ordinance shall be available retroactively to November 1, 2009, subject to the time limitation and eligibility criteria outlined in the Rebate Eligibility guidelines of Rule 141-C, as amended. Increases in Rebate amounts shall apply only to purchases made after the effective date of the ordinance.

Section Five: Amendment of Rule 141 – Water Conservation Rebates

Rule 141 shall be amended as shown in bold italics (bold italics) and strikeout (strikethrough).

RULE 141 – WATER CONSERVATION REBATES

A. REBATES QUALIFYING DEVICES

Rebates are available for completion of any of the following actions purchase of the following Qualifying Devices within the boundaries of the Monterey Peninsula Water Management District. The following is the list of Qualifying Devices:

1. Replacement of a non-Ultra-Low Flush Toilet with an Ultra-Low Flush Toilet;

21. Initial installation of an Ultra-Low Consumption High Efficiency Dishwasher;

32. Initial installation of an Ultra-Low Consumption High Efficiency Washing Machine Clothes Washer for Residential Use;

43. Initial installation of an Instant-Access Hot Water System;

54. Initial installation of a High Efficiency Toilet;

65. Initial installation of a Zero Water Consumption Urinal;

76. Initial installation of a One or more Cisterns to store water installed as a component of an Irrigation System. Maximum available Rebate shall be for 3,000 gallons of Cistern storage capacity on a Site;

87. Initial installation of a Smart Controller;

98. Initial installation of a Rain Sensor appurtenant to a Smart Controller or to a conventional automatic Irrigation System controller;

109. Initial installation of Soil Moisture Sensors that control the irrigation cycles of a conventional automatic Irrigation System controller or Smart Controller. Gypsum block Soil Moisture Sensors shall not be included on the list of Qualifying Devices.

10. Removal of established Lawn and replacement with low water use plants or permeable surfaces to a maximum of 2,000 square-feet (requires pre and post inspection);

11. Synthetic Turf (maximum of 2,000 square-feet);

12. High Efficiency Urinal;

13. Pint Urinal;

14. Rotating Sprinkler Nozzle;

15. Water Broom. Maximum available Rebate shall be for two Water Brooms per Site;

16. High Efficiency Clothes Washer designed and manufactured for Non-Residential uses;

17. Cooling Tower Conductivity Controller;

18. Water Efficient Ice Machine;

19. X-ray film processor recirculation system.

B. REBATE AMOUNTS

The following Rebates shall be issued by the District on a first-come, first-served basis as long as funds remain available. In the event that funds are expended, applications shall be filed in the order received. If all eligibility criteria has been met and additional funding is made available, Rebates shall be first funded for applications on file pending Rebate, with all subsequent applications taken in a first-come, first-served order as long as funding remains available.

At no time shall the Rebate amount exceed the price of the Qualifying Device., except as allowed for related costs as provided below:

1. The Rebate for replacement of a non-Ultra-Low Flush Toilet with an Ultra-Low Flush Toilet shall cover the cost of the toilet, seat, wax seal, supply line, angle stop, plumbing permit, sales tax and installation by a licensed plumber, not to exceed $100 per toilet or the actual cost per toilet, whichever is less.

21. The Rebate for initial installation of a High Efficiency Toilet shall be $150200 per toilet or the actual cost per toilet, whichever is less.

32. The Rebate for an Ultra-Low Consumption High Efficiency Dishwasher shall be $125 per appliance.

43. The Rebate for an Ultra-Low Consumption High Efficiency Clothes Washer Washing Machine with a maximum water usage of between 18.1 and 28 gallons per load shall be $150250 per appliance.

5. The Rebate for an Ultra-Low Consumption Washing Machine with a maximum water usage of 18.0 gallons per load shall be $200 per appliance.

64. The Rebate for installation of an recirculating Instant-Access Hot Water System shall be $200 per Site or the actual cost, whichever is less.

75. 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.

86. The Rebate for Zero Water Consumption Urinals shall be $200 300 per urinal.

97. The Rebate for a Smart Controller shall be $100 for up to four stations. An additional $10 shall be available per station up to twenty (20) stations or the actual cost, whichever is less. The District shall maintain a list of qualifying Smart Controllers.

108. The Rebate for a Rain Sensor attached to an Irrigation System controller shall be $25 or the actual cost, whichever is less.

119. The Rebate for installation and use of one or more Soil Moisture Sensor(s) on a conventional automatic Irrigation System shall be $25 per sensor or the actual cost, whichever is less. Gypsum block Soil Moisture Sensors shall not qualify for Rebate.

102. The Rebate for Cistern water tanks shall be $25 per 100 gallons of water storage capacity, up to a maximum storage capacity of 3,000 gallons per Site.

11. The Rebate for Lawn removal and replacement with low water use plants or permeable surfaces shall be $1.25 per square-foot to a maximum of 2,000 square-feet per Site.

12. The Rebate for Synthetic Turf shall be $2.00 per square-foot, to a maximum of 2,000 square-feet per Site.

13. The Rebate for a High Efficiency Urinal shall be $200.

14. The Rebate for a Pint Urinal shall be $250.

15. The Rebate for a Rotating Sprinkler Nozzle shall be $0.50.

16. The Rebate for a Water Broom shall be $150.

17. The Rebate for a High Efficiency Clothes Washer for Non-Residential use shall be $450. For the purpose of this Rebate, a Multi-Family Residential Site with a common laundry room shall be considered a Non-Residential use;

18. The Rebate for a Cooling Tower Conductivity Controller shall be $1,000;

19. The Rebate for a CEE Tier II Water Efficient Ice Machine shall be $400;

20. The Rebate for an X-ray film processor recirculation system shall be $2,000.

C. REBATE ELIGIBILITY

1. Rebates shall be issued only for installation of Qualifying Devices installed on Sites located within the District that are served by Water Distribution Systems regulated by the District.

2. No Rebate shall be issued for installation of Qualifying Devices that are required to be installed and maintained by Regulation XIV of the District and no Rebate shall be issued for installation of Qualifying Devices that have been used to obtain a Water Permit. Rebates shall be available for all retrofits until the date the retrofit becomes mandatory, such as the date a Change of Ownership occurs, a Water Permit is issued, or the date a Non-Residential retrofit is required pursuant to Regulation XIV This includes but is not limited to:

3. Properties subject to Rule 142 (Plumbing Fixtures for New Construction), Rule 143 (Retrofit of Existing Commercial Uses) and Rule 144 (Retrofit Upon Change of Ownership or Use) at the time the Rebate application is processed.

4. Properties required to install Ultra-Low Flush Toilets as a condition of a water rationing variance (Rule 92).

5. No Rebate shall be issued for Ultra-Low Flush Toilets when the District’s records indicate that a Water Permit was issued between 1985 and 1987 and a Connection Charge reduction occurred as a result of the Applicant’s agreement to install Ultra-Low Flush Toilets.

43. Rebates shall be available only for the initial purchase installation of a Qualifying Devices. Rebates shall not be issued for replacement of an existing Qualifying Device with the exception of Clothes Washers that have been removed from the Site by a previous owner/tenant.

54. Rebates shall be available for a maximum of twenty (20) toilets on a Non-Residential Site.

65. Rebates shall not be issued for more than 3,000 gallons of Cistern storage capacity on a Site.

6. Rebates for Lawn removal and Synthetic Turf shall be available only to Sites irrigated with water from the Monterey Peninsula Water Resource System.

7. Applicants for Rebates for Synthetic Turf should inquire about local codes with the Jurisdiction prior to purchase and installation.

8. A Site may qualify for both a Lawn removal Rebate and a Synthetic Turf Rebate.

9. Water Efficient Ice Machines shall be listed as CEE Tier II.

10. An X-ray film processor recirculation system shall be listed as a qualifying model by the California Urban Water Conservation Council Resource Center.

D. CONDITIONS OF APPROVAL

1. Applications for Rebates shall be submitted within 90 days of purchase of Qualifying Devices.

2. Applicant agrees to install the fixture and/or appliance at the property listed on the application form.

3. Applicant shall certify under the penalty of perjury that the information on the application is true and complete.

4. Rebates shall only be granted for Qualifying Devices that meet the definitions as provided in Rule 11.

5. Applicant agrees that the District may conduct an inspection of the Rebate Site to verify installation of Qualifying Devices.

6. Rebates shall only be granted for Smart Controllers that meet minimum quality and dependability requirements as determined by product testing conducted by the Irrigation Association. Smart Controllers that meet these criteria shall be named on a list of qualifying Smart Controllers on file at the District offices. A copy of this list shall be posted on the District’s website and shall be updated as new Smart Controllers meet the Irrigation Association criteria.

7. In addition to other requirements, Sites for Rebate for installation of Smart Controllers shall meet the following minimum requirements:

a. Irrigation System shall be a fully operational in-ground Irrigation System operated by an automatic sprinkler timer, and shall be efficiently designed, or modified if necessary, to include proper distribution uniformity, matched spray heads or emitters with similar precipitation rates, efficient hydrozoning, and proper spacing.

b. Site shall include at least 1,500 square-feet of automatically irrigated Landscaping.

c. Property owner agrees to release historical and future water usage data for statistical purposes.

d. Smart Controller must be installed and operational at the installation Site.

8. Lawn removal and replacement at a Qualifying Property shall be subject to annual visual verification by the District.

9. Determinations of eligibility for Lawn removal and replacement Rebates shall be at the discretion of the General Manager.

10. Rebates for Lawn removal and replacement with low water use plants or permeable surfaces and for Synthetic Turf installation shall require a free pre-inspection by the District to document existing conditions before removal/installation and shall have a follow-up inspection to document removal of Lawn and replacement with low water use plants or permeable surfaces and/or installation of Synthetic Turf. The follow-up inspection verifying Lawn removal and replacement shall occur within six (6) months of the pre-inspection.

11. Lawn removal and Synthetic Turf Rebates shall require recordation of a deed restriction on the title of the property prior to release of Rebate funds. The deed restriction shall specify that the property is restricted to the changed landscaped area for a period of fifteen (15) years. The deed restriction shall be rescinded upon repayment to the District of the full Rebate amount and any processing fee required pursuant to Regulation VI, Fees.

E. APPLICATION

1. A completed application for Rebate shall include the name and address of the Applicant, property owner’s name, telephone numbers, address of property where the fixture and/or Qualifying Device is being installed, Assessor’s Parcel Number, water company account number, date of retrofit, brand and model of toilet or other appliance Qualifying Device installed, name of installer and receipt for the purchase of the appliance. The application shall also request information about how the applicant learned of the Rebate program.

2. Applications for Rebate for installation of an Ultra-Low Flush Toilet shall include a receipt for installation costs and any parts associated with installation of an Ultra-Low Flush Toilet if these items fall within the $100 maximum Rebate for Ultra-Low Flush Toilets shall include either the original or a full copy of the receipt for purchase.

3. Written authorization of the current property owner shall be required for Applicants who are not the owners of the property for which a Rebate is requested. The authorization must indicate the property owner’s consent to the Applicant receiving a Rebate for installation of the Qualifying Devices. Applications submitted without owner approval will be denied.

F. PROCESS

1. Upon receipt of an application, the District shall verify completion and accuracy of information and shall verify the purchase of the Qualifying Device(s) by reviewing the purchase receipt(s).

2. The District shall search its records for previous retrofit requirements. If no match is found, a Rebate shall be processed if funds are available in the Rebate Account. In the event that funds are not available, the application will be kept on file pending augmentation of the Rebate Account.

3. Information contained on the application will be added to the District’s records for future use in assessing water savings achieved through the Rebate Program.

4. When funds are available in the District’s Rebate Account, a Rebate check will be processed and mailed to the Applicant.

Section Six: Publication and Application

The provisions of this ordinance shall cause the amendment and republication of Rule 11 and Rule 141 to the permanent Rules and Regulations of the Monterey Peninsula Water Management District.

Section Seven: Effective Date

This ordinance shall be given effect at 12:01 a.m. on January 1, 2010.

Section Eight: Sunset

This ordinance shall not have a sunset date.

Section Nine: Severability

If any subdivision, sentence, clause, or phrase of this ordinance is, for any reason, held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the remaining portions of this ordinance, or of any other provisions of the Monterey Peninsula Water Management District Rules and Regulations. It is the District’s express intent that each remaining portion would have been adopted irrespective of the fact that one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared invalid or unenforceable.

On motion of Director _________, and second by Director ________, the foregoing ordinance is adopted upon this _______ day of _____________, 2009, by the following vote:

AYES:

NAYS:

ABSENT:

I, Darby W. Fuerst, Secretary to the Board of Directors of the Monterey Peninsula Water Management District, hereby certify the foregoing is a full, true, and correct copy of an ordinance duly adopted on the ______ day of ____________, 2009.

Witness my hand and seal of the Board of Directors this ____ day of _________, 2009.

________________________________

Darby W. Fuerst, Secretary to the Board

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