Meeting Date:

December 13, 2010





Darby Fuerst,




General Manager

Line Item No.:




Prepared By:

Stephanie Pintar

Cost Estimate:



General Counsel Review:  N/A

Committee Recommendation:  The Water Demand Committee recommended an ordinance be developed to suspend credit expiration during a CPUC approved moratorium (September 30, 2010).  The Policy Advisory Committee (PAC) and Technical Advisory Committee (TAC) supported the concept ordinance (October 25, 2010).

CEQA Compliance: N/A


SUMMARY:  At the November 15, 2010 meeting, staff recommended that the Board delay a scheduled first reading of draft Ordinance No. 146 until after a thorough California Environmental Quality Act (CEQA) review has been conducted.  As part of the recommendation, staff indicated that they would report back at the next meeting with an estimate on the resources needed to conduct the CEQA evaluation and the timing of a new first reading for the ordinance.  The Board postponed first reading pending further CEQA evaluation.  Ordinance No. 146 suspends or “tolls” the expiration date of a Water Use Credit during a California Public Utility Commission (CPUC) ordered moratorium.


DISCUSSION:  Staff initially had concerns that the effort to locate and verify all documented Water Use Credits would potentially take up to six months to complete and that assistance of additional staff would be necessary to undertake the effort.  However, during the past month, the Water Demand Division has assigned two staff people to this project and the documented credits for Residential Water Use Credits have been mostly compiled and verified.  As of December 6, 2010, staff has completed verification of Residential Water Use Credits for the period of 2000-2008 and should complete the remaining two years within the next two weeks before moving to verification of Non-Residential Water Use Credits.


Staff anticipates completion of the Water Use Credit verification process by mid-to-late January 2011.  At that time, an Initial Study will be completed to determine the environmental impacts of the Ordinance before the ordinance is returned to the Board for first reading.   At this time, it appears that a first reading may be scheduled in February 2011, following a 20-day CEQA comment period.  The ordinance would then have a second reading in March and would be effective in April 2011. 


At the November 2010 Board meeting, Director Brower expressed a concern that a CPUC-ordered moratorium could occur before the ordinance was in place, and that there was the possibility that some Water Use Credit holders could be essentially “cut off” from use of their credit. In reviewing the Residential Water Use Credits on file at the District, staff checked to see how many credits expire between January and May 2011, and found that there are eleven Water Use Credits totaling 0.0063 acre-feet of water.  The amount of Non-Residential Water Use Credits still needs to be evaluated.


RECOMMENDATION:  No Board action is required.  Staff recommends that the in-house review effort continue before preparing an Initial Study on Ordinance No. 146.  Staff will update the Water Demand Committee on the Initial Study in February 2011.


BACKGROUND:  Water Use Credits and Water Credits are documented when (1) there is a Permanent Abandonment of Use, (2) following the installation of Ultra-Low Water Use Technology not required by the District, or (3) when there is a temporary removal of a use, such as a Change of Use.  The credit process allows the reuse of the reduced increment of water on the same Site.  Credits may be transferred to other Sites pursuant to Rule 28.  Water Use Credits resulting from a Permanent Abandonment of Use (i.e., demolition or permanent removal of plumbing or fixtures, or replacement of fixtures with state-of-the-art equipment or high efficiency appliance credits) allow the reuse of the reduced increment of water on a Site for up to ten years (up to 20 years at Redevelopment Project Sites).


On May 24, 2010, California American Water (CAW) filed an Application for an Order Authorizing and Imposing a Moratorium on Certain New or Expanded Water Service Connections in its Monterey District (A1005020) with the California Public Utilities Commission (CPUC).  In August 2010, staff met with representatives of the parties involved in CAW’s request for a moratorium to comply with the State Water Resources Control Board (SWRCB) Cease and Desist Order 2009-0060 (CDO).  The CPUC is presently considering CAW’s moratorium request and a decision is anticipated in early 2011.  Information obtained in August 2010 indicates there is considerable uncertainty about what projects would be impacted by a moratorium. 


On October 18, 2010, District staff recommended the Board consider the potential effects of a CPUC-ordered moratorium on properties that have a Water Use Credit or an On-Site Water Credit.  Draft Ordinance No. 146 responds to the Board’s direction to prepare an ordinance that amends the District’s Rules to suspend or “toll” a credit’s expiration date if the credit is subject to a CPUC-ordered moratorium.  The District’s Expanded Water Conservation and Standby Rationing Plan suspends credit expirations in Stages 6 and 7 (Water Rationing), but the plan does not consider a moratorium by the CPUC that impacts credits in earlier stages.


The Water Demand Committee discussed this item on September 30, 2010, and recommended that the Board direct staff to prepare an ordinance to toll the expiration dates of Water Credits that are impacted by a CPUC-approved moratorium.  The District’s Policy Advisory Committee (PAC) and Technical Advisory Committee (TAC) recommended approval of a concept ordinance. 


IMPACT ON STAFF/RESOURCES:  The review of Water Use Credits documented through correspondence with the District is requiring approximately 40 staff hours per week.  This effort is anticipated to continue through January 2011.  This has an impact on other functions of the Water Demand Division, such as data migration.  However, staff does not believe that the Water Use Credit review can be undertaken by someone unfamiliar with the District’s permit process and database system.