ITEM:		PUBLIC HEARINGS
18.	A.		CONSIDER FIRST READING OF ORDINANCE NO. 148 -- AN ORDINANCE OF THE MONTEREY PENINSULA WATER MANAGEMENT DISTRICT AMENDING THE REBATE PROGRAM
Meeting Date:				March 21, 2011	Budgeted:	N/A
From:				Darby Fuerst,	Program/	N/A
				General Manager	Line Item No.:
Prepared By:				Stephanie Pintar	Cost Estimate:	N/A
General Counsel Review: Yes
Committee Recommendation: Water Demand Committee reviewed a draft ordinance on March 9, 2011, and recommended adoption.
CEQA Compliance: The replacement of existing facilities is a categorical exemption under Class I, §15301 of the California Environmental Quality Act.

SUMMARY: Draft Ordinance No. 148 (Exhibit 18-A) amends Rule 141, Water Conservation Rebates, to implement new policies related to Lawn removal Rebates adopted in Resolution 2011-04 and amends Rule 141 to address unavailability of funds in the Rebate Account. As funding for rebates is presently in the California American Water system, time is of the essence. This ordinance also amends portions of the Rebate Program to strengthen conditions of approval, clarify that Sites must comply with applicable District rules before Rebates are issued, disqualify Qualifying Devices mandated by local, State or Federal water conservation programs, reorder language related to Ultra High Efficiency Toilets in Rule 141-C, and delete reference to a list of Weather Based Irrigation Controllers maintained by the District. This ordinance also clarifies deed restriction requirements allowing access to water records for recipients of Weather Based Irrigation Controller Rebates, Lawn removal Rebates, and Synthetic Turf Rebates.

Ordinance No. 148 is proposed for first reading on March 21, 2011, to address recent information from the Division of Ratepayer Advocates that Rebate Program funding from the 2012-2014 California American Water General Rate Case cannot be applied retroactively to retrofits that occur in 2011. The current language of Rule 141 states that applications are held in the order received pending future funding. As future funding cannot be utilized, this provision must be stricken.

The California American Water Rebate Account is projected to be depleted by May 2011. As of March 13, 2011, approximately $155,000 remains in the Rebate Account. Resolution 2011-04 strengthened and clarified the eligibility requirements for a Lawn removal Rebate and must be implemented by ordinance at the direction of the Board. The Resolution reinstated the former Lawn removal Rebate application processes, which has been unclear, until the new guidelines can be added to the rule by ordinance. The new guidelines must be implemented to ensure water savings from those participating in the program.

DISCUSSION: Staff seeks direction on processing approximately 58 incomplete Lawn removal applications that have the potential to result in Rebates of approximately $84,000. As the applications are incomplete (i.e., the applicant has not completed the process), the applications

would be subject to the rules in effect at the time the complete application is submitted. However, given that the applicants may complete their application within 120 days, under Rule 141, staff has provided optional language to allow a reasonable time for completion of the application before the applicant is subject to the new rules. Staff proposes 30 days to complete the application before it is subject to the new rule. During the 30-day period, staff recommends the District reserve Rebate funds sufficient to fund these potential Rebates. The following text is inserted in Ordinance No. 148 to achieve this result.

Section Four: Applications in Process

Lawn removal Rebate applications on file at the District as of March 21, 2011, that have been verified by the District to have a quantified Lawn area to be removed, shall complete the application by April 30, 2011 or be subject to Rule 141 as amended.

RECOMMENDATION: Staff recommends the Board hold the first reading of Ordinance No. 148 to amend Rule 141 to address the process for Rebate applications when the Rebate Account is depleted and to address ambiguities in the current Rule 141 related to Lawn removal Rebates. Staff further recommends the Board add the proposed Section Four to the draft ordinance.

The ordinance would be brought back for second reading and adoption at the April Board meeting if approved on first reading, and would take effect following adoption. Urgency ordinances require further Board review within one year of adoption, pursuant MPWMD Meeting Rule 122.

This ordinance is exempt from CEQA. Upon adoption, staff will file a Notice of Exemption with the County Clerk. Replacement of existing facilities is a categorical exemption under Class I, §15301 of the California Environmental Quality Act.

BACKGROUND: On January 27, 2011, the Board suspended the receipt and processing of Lawn removal Rebate applications pending approval of revised program guidelines by the General Manager and the renewed availability of Rebate funds. The suspension was lifted upon adoption of Resolution 2011-04 on February 24, 2011. At the February meeting, the Board clarified that the guidelines adopted in Resoution 2011-04 were not to be implemented until they were codified in the Rules. This ordinance implements that direction.

The Lawn removal Rebate went into effect January 1, 2010. Eligible applicants may receive up to $1.25/square-foot for removing and replacing up to 5,000 square-feet of Lawn with drought-tolerant plants or permeable surfaces. During the first twelve months of the program (January-December 2010), 77 applications totaling $130,500 were approved for removal of three acres of Lawn with estimated savings of about 11 acre-feet each year. Lawn Rebates are deed restricted for 15 years, ensuring continuing water savings over a significant period of time.

IMPACT ON STAFF/RESOURCES: Adoption of Ordinance No. 148 will require staff time to contact pending Lawn removal Rebate applicants and to respond to their questions. Staff is currently tracking the Rebate Account on a daily basis. Notice of the change in process regarding holding Rebate applications when funding is depleted will be posted to the District’s websites and at its office. Staff will also provide notice to the local retailers and wholesalers of Qualifying Devices, the Monterey County Association of Realtors and the AIA Monterey Bay.

EXHIBITS

18-A Ordinance No. 148 U:\staff\word\boardpacket\2011\20110321\PubHrg\18\item18A.docx