WATER DEMAND COMMITTEE
ITEM:		ACTION ITEMS
2.	REVIEW AND DISCUSS DRAFT CONCEPT ORDINANCE—ADDING A PROCESS FOR SUB-POTABLE WATER USE CREDITS TO THE DISTRICT’S RULES AND REGULATIONS
Meeting Date:			October 16, 2007
From:			David A. Berger,
			General Manager
Prepared by:			Stephanie Pintar

SUMMARY: At the September 17, 2007 Board meeting the General Manager of the Monterey Regional Water Pollution Control Agency made a presentation on the recycled water component of the agency’s proposed Regional Urban Water Augmentation (RUWA) Project. Following the presentation, the Board discussed the concept of allowing Sub-potable Water Use Credits as a potential incentive for owners of Monterey Peninsula parks, golf courses, and other open spaces to switch irrigation of these facilities from potable to RUWA or other sub-potable water sources. The Board directed the Water Demand Committee and staff, with input from the Policy and Technical Advisory committees, to develop an ordinance that would allow for the establishment and transfer of Sub-potable Water Use Credits. A copy of a draft ordinance with no transfer provision was provided in the agenda materials related for the September 17 presentation and Board discussion item, and is attached (Exhibit 2-A). The draft ordinance was previously reviewed by the Water Demand Committee on August 14, 2007.

The Water Demand Committee is expected to discuss: 1) preparation of a revised concept ordinance that includes Sub-potable Water Use Credit transfers; (2) what level of California Environmental Quality Act (CEQA) review will be required before the ordinance can be considered by the Board; and (3) the fiscal consequences of expanding the concept ordinance to include a transfer provision. District General Counsel, David Laredo, will address CEQA as it pertains to potentially including in the concept ordinance a provision that would allow consideration of transferring Sub-potable open space Water Use Credit, as requested by the Board on September 17. The Sub-potable Water Use Credit first reading draft ordinance reviewed on August 14 by the Water Demand Committee, previously known as No. 130, did not contain a transfer provision. Staff completed and circulated an initial study and proposed negative declaration analyzing the potential environmental effects of that version of the ordinance, in compliance with CEQA, and written comments thereon were received from attorney Michael Stamp and staff of the Monterey County Department of Environmental Health (Exhibit 2-B). Since the draft first reading version of the ordinance was not considered by the Board, staff has not responded to the CEQA comments. At a minimum, a new initial study would be necessary to address the potential direct and cumulative environmental impacts of allowing consideration of applications to transfer Sub-potable Water Use Credits created under the draft concept ordinance.

RECOMMENDATION: The Water Demand Committee should review and comment on the draft Concept Ordinance (“Adding a Process for Sub-potable Water Use Credits”), including a revision to the ordinance that would enable consideration of Sub-potable Water Use transfers, including the CEQA review required for same; and provide guidance to staff and legal counsel regarding processing of the Concept Ordinance for future consideration by the Board.

BACKGROUND: (Note: The text of the following section of this staff report is substantively the same as the Background section in the report provided for the August 14, 2007 Water Demand Committee meeting.) The draft Concept Ordinance, as written, provides an incentive for replacing existing Non-Residential Potable water irrigation with Sub-potable Water. This ordinance adds the new definition “Sub-potable Water Use Credit” to the District’s Rules and Regulations. The prerequisite for a Sub-potable Water Use Credit is the permanent replacement of Non-Residential Potable water irrigation (originating from the Monterey Peninsula Water Resource System or Seaside Groundwater Basin) with: (1) Sub-potable Water originating from outside the Monterey Peninsula Water Resource System and the Seaside Groundwater Basin, or (2) Recycled or Reclaimed Water from the Carmel Area Wastewater District or Monterey Regional Water Pollution Control District wastewater treatment facilities.

The cost of re-plumbing existing Irrigation Systems to accommodate Sub-potable Water can be daunting. For this reason, at the May 9, 2007, Water Demand Committee meeting, staff requested the committee’s input on preparation of an ordinance that would allow a Water Use Credit for conversion of Potable irrigation water to Sub-potable Water. The Water Demand Committee consensus was to draft an ordinance that would offer an On-Site Water Use Credit incentive for irrigation conversion from Potable to Sub-potable water, as an incentive for participation by the Monterey Peninsula in the RUWA Project. The committee consensus included permanently setting aside a percentage of the previous Potable water use as conservation savings.

The draft Concept Ordinance enacts a process similar to the one set forth in Rule 25.5 for Water Use Credits: Sub-potable Water Use Credits would be available for the permanent replacement of all Potable water irrigation with Sub-potable Water. A Sub-potable Water Use Credit would be non-transferable and would allow reuse of up to 75 percent of the Potable water reduction on the Site. A Sub-potable Water Use Credit can be applied to future water use on that Site at any time within a period of 60 months. After the 60th month, the Sub-potable Water Use Credit is renewed only after verification that some or all water savings represented by that credit are current (i.e. no Water Permit or other use of the Water Use Credit has occurred). If all savings are not current, a pro-rata reduction occurs. A single renewal period of 60 months is allowed; thereafter any remaining unused Sub-potable Water Use Credit expires. A Sub-potable Water Use Credit on a Redevelopment Project Site is allowed to have its expiration date extended for two (2) additional periods of sixty (60) months each, providing a maximum period of two hundred forty (240) months to use a credit on a Redevelopment Project Site.

Landscape Water Budgets are the basis for the Sub-potable Water Use Credit calculation. Rather than using actual water consumption records for the Site, which can be higher or lower depending on a number of factors, the Landscape Water Budget, required of most of the potential conversion Sites, is the method proposed for calculation of the Sub-potable Water Use Credit. Landscape Water Budgets are based on reasonable and efficient irrigation practices and considers the type of landscaping and other factors. Landscape Water Budgets are prepared by Landscape Irrigation Auditors who have been trained to assess the water needs of various plants based on soil types, Irrigation System efficiency criteria, location, etc. The use of the Landscape Water Budget for establishing the Sub-potable Water Use Credit will ensure that artificial inflation of Potable water use can not occur, and that the credit reflects a reasonable amount of water required for the specific Landscaping. The procedure for documenting a Sub-potable Water Use Credit is proposed in Section 5-G of the draft Concept Ordinance.

A number of checks are put into place in this ordinance to ensure that any use of a Sub-potable Water Use Credit could not exceed the prior Potable use and would result in water savings. The ordinance limits the source of Sub-potable Water to (1) either an On-Site well or other Water Distribution System with a Source of Supply outside the Monterey Peninsula Water Resource System and the Seaside Groundwater Basin, or (2) Reclaimed or Recycled Water from the Carmel Area Wastewater District (CAWD) or Monterey Regional Water Pollution Control Agency (MRWPCA). The ordinance further limits the amount of credit to 75 percent of the original Potable use as determined using the Landscape Water Budget (i.e., Estimated Applied Water) developed for the existing Landscaping and verified with both On-Site inspection and by review of orthophotography of the Site to verify that all Landscaping has been permitted by the District (if required). The remaining 25 percent of the saved water is permanently reserved as conservation savings to reduce overall local water consumption.

Potential for Sub-potable Water Use Credit

The potential for Sub-potable Water Use Credits is somewhat limited. There are two tertiary treatment facilities that have existing Recycled Water distribution systems that serve or will serve a portion of the general Monterey Peninsula. CAWD supplies Reclaimed Water to the golf courses and open space in Del Monte Forest via a Water Distribution System and Forest Lake Reservoir owned by the Pebble Beach Community Services District, with limited potential for future use of surplus Recycled Water elsewhere on the Peninsula[1]. The Carmel Area Wastewater District/Pebble Beach Community Services District (CAWD/PBCSD) Wastewater Reclamation Project has no current plan to expand the project beyond the existing users. Currently, Golf Courses and irrigated open space in the Del Monte Forest area of Pebble Beach utilize this Recycled Water for irrigation. To date, due to water quality issues, the project has not been able to replace 100 percent of the pre-project irrigation water needs of the users. This shortfall is in the process of being eliminated by improvements to the CAWD treatment facility and by storage of treated Recycled Water in the recently rehabilitated Forest Lake Reservoir, which facilities are expected to be complete by mid-2008. Under specified conditions, up to 20 AFY or possibly more of “surplus” Recycled Water is expected to be available for other beneficial uses on the Monterey Peninsula[2].

MRWPCA has proposed the Regional Urban Recycled Water Distribution Project which would provide Recycled Water to replace current Potable and Sub-potable Water uses within the Marina Coast Water District, former Fort Ord, and the California American Water Monterey Division service area. According to RBF Consulting in the July 2003 document Regional Urban Recycled Water Distribution Project^[3], the project would provide 300 acre-feet of Recycled Water to customers on the Monterey Peninsula.

MRWPCA has identified a number of potential Sites in the City of Seaside, City of Monterey and Unincorporated County that could convert to Recycled Water from the Regional Urban Recycled Water Distribution Project. The approximate total existing water use of these irrigated areas subject to District regulation is 440 AFY. Assuming the maximum 300 AFY is converted from Potable to Sub-potable Water use as a result of this draft Concept Ordinance, 225 AFY could be documented as “Sub-potable Water Use Credit” and reused on the same Sites. Most of the Sites identified in the Regional Urban Recycled Water Distribution Project report are unlikely to have major development as their current uses include parks, Golf Course (Del Monte Golf Course), etc. On these Sites, there is some potential for reuse of saved water for negligible uses such as restrooms, drinking fountains, etc. Other Sites, such as Monterey Peninsula College (approximately 29 AFY of current irrigation) and several Public schools in Seaside (identified in the RBF Consulting document), could reuse 75 percent of the saved water capacity for expansion of the campus facilities.

Small Water Distribution Systems (water Wells) are located throughout the District that pump water from water sources not connected to either the Monterey Peninsula Water Resource System or the Seaside Groundwater Basin, both of which are under legal pumping constraints. Conversion of Non-Residential Potable water irrigation to Small Water Distribution System Sources of Supply outside the regulated systems would qualify for credit under the proposed ordinance. As the ordinance limits credit to Non-Residential uses, the number of Sites that could potentially qualify is limited.

Restricting the Sub-potable Water Use Credit to 75 percent of the converted demand, and limiting qualification for a Sub-potable Water Use Credit to Non-Residential use, reduces the potential for consumption above the Landscape Water Budget. Furthermore, as discussed above, the potential for On-Site reuse is limited. The ordinance does not allow transferring Sub-potable Water Use Credits to another Site, thereby eliminating any possibility for relocation of the former use.

District Regulation XIII

District staff has identified two scenarios where reduced water savings within the District may occur as the result of this project.

Currently, District Regulation XIII controls the use of Sub-potable Water. Under Rule 131, the MPWMD Board can declare the availability of Sub-potable Water as an alternative to irrigating Greenbelt areas with Potable water. Rule 11 defines Greenbelt to include cemeteries, Golf Courses, parks, and highway Landscaping. Rule 132 describes the process by which the Board declares that Potable irrigation is Water Waste.

Rule 131 is patterned after California Water Code Section 13550, which declares the use of Potable domestic water for nonpotable uses as Water Waste or an unreasonable use of water within the meaning of Section 2 of Article X of the California Constitution, if Recycled Water is available that meets certain conditions.

Creation of Sub-potable Water Use Credits saves about 25 percent of the Potable irrigation, whereas implementation of Rules 131 and 132, as well as Water Code Section 13550, would save 100 percent.

Similarly, State Water Resources Control Board Order No. WR 95-10 ordered California American Water to “obtain water from other sources of supply and make one-for-one reductions in unlawful diversions from the Carmel River.” Creation of Sub-potable Water Use Credits by the District helps address this as a replacement supply, but in a lesser amount than total replacement with Sub-potable Water.

An argument for adoption of this ordinance as it relates to the potential substitution of 300 AFY of Potable water with Recycled Water from MRWPCA without District Board action to implement Rules 131 and 132 is the cost of moving Recycled Water from MRWPCA into the District. That cost could be as high as $3,000 per acre-foot[4]. In conversations with staff from the City of Monterey, District staff was informed that the high cost of installing infrastructure to facilitate a Recycled Water Distribution System on the Monterey Peninsula was an obstacle to its participation in the project. An alternative would be to secure federal or state funding to underwrite these costs. Prior to consideration of Rules 131 and 132, the ability to obtain a Sub-potable Water Use Credit could provide motivation for Jurisdictions to participate in the Recycled Water project.

The second scenario identifies the impact to community water use due to the potential for Non-Residential water use that could otherwise be stopped during water rationing or emergencies by prohibitions on water use for irrigation. Stages 6 and 7 Water Rationing of the District’s Expanded Water Conservation and Standby Rationing Plan contain a provision whereby Non-Residential outdoor water use and operation and maintenance of ornamental water uses could be prohibited[5]. Allowing reuse of 75 percent of the water saved for new or expanded Non-Residential uses on the Site reduces the water savings associated with these rules and could potentially impact the amount of water available to other Non-Residential water users. Using the MRWPCA capacity (300 AFY) as an example, the maximum potential loss in water savings is 225 AFY during Stages 6 and 7. The loss of this savings could impact Non-Residential water users who would be rationed together as a group.

EXHIBITS

2-A Draft Concept Ordinance--Adding a Process for Sub-potable Water Use Credits

2-B Written Comments Received on Initial Study/Proposed Negative Declaration for Concept Ordinance (formerly know as No. 130)

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[1] Per Amended and Restated Reclamation Project Construction and Operation Agreement (2004), between CAWD, PBCSD, MPWMD and Pebble Beach Company.

[2] Agreement for Sale of Recycled Water between MPWMD and each of the five entities receiving the recycled water (December 15, 2004)

[3] Regional Urban Recycled Water Distribution Project, prepared by RBF Consulting for Marina Coast Water District and the Monterey Regional Water Pollution Control Agency, July 2003

[4] Presentation by MRWPCA, April 16, 2007, titled “Interest in Providing Recycled Water to the Monterey Peninsula.”

[5] District Rule 166-M, Rule 166-O, and Rule 167-L, found in the Rules and Regulations of the MPWMD.