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ITEM: |
PUBLIC HEARINGS |
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18. |
B. |
CONSIDER
ADOPTION OF RESOLUTION 2011-07, SUSPENDING RECEIPT OF LAWN REMOVAL REBATE
APPLICATIONS |
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Meeting Date: |
March 21, 2011
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Budgeted:
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N/A
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From: |
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Program/ |
N/A |
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General Manager |
Line Item No.: |
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Prepared
By: |
Stephanie Pintar |
Cost Estimate: |
N/A |
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General Counsel
Review: Yes
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Committee
Recommendation: Water Demand Committee discussed this topic
and recommended continuing the program.
However, new information has been received from the CPUC since the
Water Demand Committee meeting.
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CEQA
Compliance: The replacement of existing facilities is a categorical exemption
under Class I, §15301 of the California Environmental Quality Act. |
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SUMMARY: Resolution 2011-07 (Exhibit 18-B) suspends the receipt of applications for Lawn removal Rebates. This action is proposed to address the limited funding available in the California American Water Rebate Account and to enable adoption and implementation of Ordinance No. 148 with the Lawn Rebate guidelines approved in Resolution 2011-04.
DISCUSSION: Funding for Rebates in the California American Water service area is nearly depleted. The Rebate Account is expected to be exhausted by May 2011. As of March 13, 2011, approximately $155,000 remains in the California American Water Rebate Account. There are approximately 58 incomplete Lawn removal applications that have the potential to result in Rebates of approximately $84,000. The applications are presently incomplete (i.e., the applicant has not completed the process). Continued acceptance of Rebate applications under the current rules (i.e. pre-Ordinance No. 148) increases the potential for funding Rebates that may not result in water savings.
Resolution 2011-04, adopted February 24, 2011, established guidelines to strengthen and clarify the eligibility requirements for a Lawn removal Rebate. However, the Board directed that staff continue processing Lawn removal Rebates under the current rules. The guidelines adopted in Resolution 2011-04 must be implemented by ordinance at the direction of the Board to ensure water savings from those participating in the program. The Resolution also reinstated the former Lawn removal Rebate application processes, which are confusing, until the new guidelines can be added to the rule by ordinance.
Suspension of receipt of applications for Lawn Rebates is prudent given 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 used, Ordinance No. 148 strikes this language. However, Ordinance No. 148 must be effective before the provision is removed. Therefore, given that Lawn Rebates are the greatest expenditure of Rebate funds and have the longest and most complex approval process, continued acceptance of applications puts the District at risk of exceeding available funding.
Lawn Rebates are not funded until the application is complete and deed restrictions are recorded. In the interim, the District receives approximately 10 Rebate applications each day. Continuing the Lawn Rebate program at this time will deplete funding much faster than other Rebates due to the size of the average Lawn Rebate. Rebates for Lawn removal average about $2,500. Other Rebates are in the range of $100-300. By suspending Lawn removal Rebates, the program will be able to continue longer before funding is expended. Continuing the program is desirable in that shutting down the Rebate program will result in a loss of the momentum that has made the program so successful. Funding for Rebates from the CPUC will not be available until at least January 2012.
RECOMMENDATION: Staff recommends the Board adopt Resolution 2011-07. Upon adoption, staff will post notice in the District office on the District’s websites.
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 Resolution 2011-04 were not to be implemented until they were codified in the Rules.
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: This resolution does not have significant staffing impacts.
EXHIBITS
18-B Resolution
2011-07
U:\staff\word\boardpacket\2011\20110321\PubHrg\18\item18B.docx