WATER DEMAND COMMITTEE
ITEM:		ACTION ITEM
2.	REVIEW PRELIMINARY DRAFT ORDINANCE AMENDING THE REBATE PROGRAM AND PROVIDE DIRECTION TO STAFF
Meeting Date:			July 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: Prior to first reading
Committee Recommendation: N/A
CEQA Compliance: The replacement of existing facilities is a categorical exemption under Class I, §15301 of the California Environmental Quality Act (CEQA).

SUMMARY: At the June 22, 2011, Water Demand Committee meeting, staff was directed to draft an ordinance that increased the amount of Rebate for High Efficiency Clothes Washers (HECW) and that considered four scenarios that modify the Rebates for Lawn removal and Synthetic Turf. The draft ordinance (Exhibit 2-A) also corrects an oversight from Ordinance No. 147, adds a definition for Commercial HECW (CHECW), deletes the Rain Sensor Rebate, and limits CHECW to a maximum of 20 Rebates on a Site.

DISCUSSION:

High Efficiency Clothes Washer Rebate

The Water Demand Committee was in agreement that the Rebate amount for HECW should be increased. The committee discussed and agreed that an appropriate increase would be from $250 to $500: HECW can presently be purchased for upwards of $500. As part of the draft ordinance, staff has also proposed an increase in the amount of Rebate for CHECW from $450 to $1,000. These machines cost more than $2,000 to replace and include coin-operated washers used in commercial laundromats and in apartment complex common laundry rooms. They are designed for heavier use and are more expensive than the residential models. As proposed, a Site would be limited to Rebates for no more than 20 CHECW, with a provision that the applicant could request a formal variance to the limit from the Board.

There was concern noted at the June 22, 2011, Water Demand Committee meeting that increasing the amount of the Rebate could result in abuse of the program. To address this concern, staff added rule 141-D-9, giving the General Manager discretion in approving requests for multiple HECW at a Site. Staff does not believe this will be a problem but will monitor the program carefully for signs of abuse. The following “security” measures are in place to reduce potential for abuse:

1. Ownership of a property is verified upon receipt of the Rebate application. If the applicant is not the property owner, the applicant must secure the property owner’s written permission to receive the Rebate.

2. All Rebates are limited to the actual price of the Qualifying Device.

3. Rebates are only available for the initial purchase of a Qualifying Device, except for HECW where tenants may have moved. To address this situation, two actions have been added to Rule 141: The first addition is that applicants for repeat Rebates of High Efficiency Washing Machines may be required to provide evidence of conditions that merit successive Rebates. In most cases, this would occur in a tenant-occupied building where the landlord is already required to consent to the Rebate. In other cases, this would occur following a Change of Ownership or Use and the District would have a record of the property. The second amendment specifies that the General Manager has discretion in approving a Rebate for multiple HECW on a Site. This determination can be appealed to the Board.

4. Rebates for CHECW are limited to 20 per Site.

5. The CHECW Rebate Program will only be available until December 31, 2012, when retrofit to CHECW becomes a District mandate.

6. Applicants agree to install the fixutre on the property shown on the application and attest to the information on the application under penalty of perjury.

7. Applicants agree to a provision that the District may conduct an inspection of the Rebate Site to verify installation of the Qualifying Devices.

Rebates for Lawn Removal and Synthetic Turf

The Water Demand Committee discussed a variety of Lawn removal Rebate and Synthetic Turf Rebate situations at its June 2011 meeting. At the conclusion of the meeting, staff was given four possible scenarios to address in the draft ordinance:

1. Reduce the Rebates for Synthetic Turf and Lawn removal;
2. Eliminate the Rebate for Synthetic Turf;
3. Eliminate the Rebate for Synthetic Turf and reduce the Rebate for Lawn removal;
4. Eliminate both Rebates.

Staff has highlighted the sections of the ordinance that would be modified by any of these scenarios. Rather than creating four different versions of the ordinance for review, staff requests that committee consider the following summaries of the possible amendments and provide direction to staff. The committee can then select the option that is preferred, and staff will complete the ordinance with the recommended scenario.

1. Reduce the Rebates for Synthetic Turf and Lawn Removal. Staff used this scenario in the draft ordinance. Staff recommends reducing the Rebate for Synthetic Turf (currently $2/square-foot (sf)) to $1/sf, and the Rebate for Lawn removal from $1.25/sf to $1/sf. Reducing the amount of the Rebate for both items affects the following Rules: Rule 141-B-10 (as amended) and Rule 141-B-11 (as amended). The proposed Rebate of $1/sf is common among agencies offering a Rebate for Lawn removal.

The committee also discussed reducing the maximum square-footage that can be rebated for Synthetic Turf and Lawn removal. The Synthetic Turf Rebate is currently limited to 2,000 square-feet and the Lawn removal Rebate is limited to 5,000 square-feet. The Lawn Rebate area was increased from 2,000 square-feet to 5,000 square-feet by Ordinance No. 144, adopted August 16, 2010. Staff recommends that the current area limits remain in place to provide sufficient incentive for people to install water efficient groundcovers.

2. Eliminate the Rebate for Synthetic Turf. This requires little explanation. Deleting the Rebate for Synthetic Turf would impact rules 141-A-11, 141-B-11 (as amended), 141-C-6-b, 141-C-6-f, 141-C-6-g, 141-D-7, 141-D-7-d, 141-D-7-h, 141-D-7-i and 141-D-7-j and 141-E-3.

3. Eliminate the Rebate for Synthetic Turf and Reduce the Rebate for Lawn Removal. In this scenario, staff recommends the Rebate for Lawn removal be reduced to $1/sf. This option would amend the rules cited in option 1 (above) and would also affect Rule 141-B-10 (as amended).

4. Eliminate Both Rebates. Staff does not recommend eliminating the Lawn removal Rebate. However, should the committee provide direction to eliminate both Rebates, the following rules would be affected: 141-A-10, 141-A-11, 141-B-10 (as amended), 141-B-11 (as amended), 141-C-6 (and all subparagraphs except 141-C-6-a), 141-D-1, 141-D-7 (including all subparagraphs), 141-E-2, 141-E-3, 141-F-2 (including all subparagraphs).

Property-specific information regarding the Rebates issued for Lawn removal and for Synthetic Turf installation is shown as Exhibit 2-B. There were a total of 81 properties that received a Rebate for Lawn removal. Twenty-three properties (28 percent of those receiving a Rebate) both removed the Lawn and replaced it with Synthetic Turf. Fifty-seven properties removed the Lawn and replaced it with low water use plants or permeable surfaces, and two properties received a Rebate only for Synthetic Turf. These data indicate that Synthetic Turf is being used as an alternative to the Lawn that is being removed, and since Synthetic Turf does not require any irrigation, it is more water efficient than installing low water use plants.

Rain Sensors

Staff has eliminated the Rebate for Rain Sensors. The elimination of the Rain Sensor Rebate was agreed upon by MPWMD, California American Water (CAW) and the California Public Utilities Commission’s Division of Ratepayer Advocates (DRA) during discussion regarding the 2012-2014 General Rate Case. A requirement that Rain Sensors be installed on all automatic Irrigation Systems prior to Change of Ownership, Change of Use or Expansion of Use was added to the District Rules effective January 1, 2010. Rain Sensors are available at the District at no charge for property owners who want to voluntarily install them. CAW is also about to implement a Rain Sensor installation program where a CAW contractor will install a free Rain Sensor on high water use properties. Due to these new programs, continuation of a Rebate for Rain Sensors was discouraged.

RECOMMENDATION: The Water Demand Committee should direct staff on the CHECW Rebate, the Lawn removal and Synthetic Turf Rebates and make a recommendation to the Board regarding the first reading of Ordinance No. XXX on August 15, 2011. The draft ordinance will be reviewed by the Technical Advisory Committee in August. Both CAW and DRA will also be given an opportunity to review and comment on the ordinance prior to first reading.

IMPACT ON STAFF/RESOURCES: The increase in the Rebate for HECW will increase participation in the Rebate Program and in the level of staff effort required to process the applications. The Rebate Program is administered by staff in the Water Demand Division. Implementation of the Rebate Program will increase the workload in the Water Demand Division [when funding becomes available].

EXHIBITS:

2-A Preliminary Draft Ordinance No. 149

2-B Spreadsheets of Rebates Issued for Lawn Removal and Synthetic Turf

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