Loading...
HomeMy WebLinkAbout07/19/2011, C 13 - RESPONSE TO THE GRAND JURY REPORT, ""RATE SETTING AS A WATER CONSERVATION TOOL""" council M`°°°°'t 7-19-2011 j ac en as Repoat CITY OF SAN LUIS OBISPO FROM: Came Mattingly, Utilities Director Prepared By: Gary W. Henderson, Water Division Manager SUBJECT: RESPONSE TO THE GRAND JURY REPORT, "RATE SETTING AS A WATER CONSERVATION TOOL" RECOMMENDATION Direct the City Manager to submit a response to the Grand Jury Report titled, "Rate Setting as a Water Conservation Tool" to the Presiding Judge of the San Luis Obispo Superior Court, with a copy to the Grand Jury,by September 8, 2011. DISCUSSION Background The San Luis Obispo County Grand Jury prepared a.report titled "Rate Setting as a Water Conservation Tool" (Attachment 1). The report includes a total of six findings and six recommendations. The City of San Luis Obispo is required to respond to two of the findings and two of the recommendations. These findings and recommendations are discussed below. A draft letter has been written in response to the Grand Jury's report and is attached for the Council's consideration (Attachment 2). Grand Jury Findings and Recommendations: City Response The City of San Luis Obispo is required to respond to Grand Jury findings and recommendations 3 and 5. Each finding and recommendation is listed with the recommended response. Finding 3: Only Atascadero MVC bills show rate tiers, tier consumption and tier charges. Recommended Response: The City agrees with this finding. The City's existing utility billing system is not capable of showing rate tiers,tier consumption, and tier charges. Recommendation 3: Arroyo Grande, Grover Beach, Morro Bay, Pismo Beach, San Luis Obispo, Cambria CSD, Heritage Ranch CSD, Los Osos CSD, Nipomo CSD, San Miguel CSD, and Templeton CSD should consider revising water bills to show rate tiers, water usage for each tier and the charges for each tier. Recommended Response: This recommendation will be implemented in 2012. The City is in the process of replacing its existing.utility billing system and anticipates the new system will be operational in early 2012. With the implementation of the new system, enhancements to the information displayed on the utility bills will occur. The new utility billing software will require C13-1. Grand Jury Report on Water Conservation Rate Setting Page 2 modifications to display the level of detail that is recommended by the Grand Jury. There is project funding currently identified specifically for custom reports, one of which meets the level of detail outlined by the Grand Jury. Finding 5: Apartment buildings in the seven cities and urban areas outside of the cities typically do not have water meters that register indoor water use for individual unit. Recommended Response: The City agrees with this finding. Typically apartment buildings have one water meter that serves the entire complex. There is often a separate meter for landscape irrigation purposes. Recommendation 5: The cities and the county should consider adopting an ordinance that would require new apartment buildings to have meters that register indoor water used by individual units. To reduce costs, meters could be a type intended only for use by apartment building owners, instead of those supplied by water provider for water service hook-ups. Recommended Response: Although this recommendation will not be implemented, the City of San Luis Obispo has been strongly encouraging new apartment buildings to provide individual meters in the sidewalk area along street frontage for each unit. For smaller apartment complexes, this recommendation has been implemented on several projects. It should be noted that there is not a significant cost impact relative to the cost of the water meters in these cases. The City of San Luis Obispo charges water and sewer impact fees based on the number of apartment units in a new complex, not the number of water meters. The actual cost of the individual water meters are less than$100 but would require additional piping from the meter into each apartment. For large apartment complexes, requiring separate water meters along the street right-of-way in the sidewalk may prove much more difficult. Based on City policy, the City is responsible for the water system up to and including the water.meter for each unit. For large complexes, the City requires one large meter along the street right-of-way to limit future responsibility for onsite water systems. The City will continue to encourage the installation of separate water meters for each individual apartment for new projects where reasonable. Individual "sub-meters" could be recommended onsite for the individual property owner's apportionment of the water bill. There is legislation (AB 19) being proposed that would require all new multi-unit residential structures, or newly constructed multi-unit residential and commercial structures, to have individual water meters to each unit. Attachment 3 is a copy of the proposed legislation. The requirements outlined in the proposed legislation demonstrate the complexities associated with requiring sub-meters. Issues such as periodic testing of the meter accuracy, reading meters to coincide with the date that the City would read the master meter, and who would pay for the costs for reading the sub-meters and processing the bills are challenging and will require thorough discussion to ensure equity among all parties involved. C13-2 o � Grand Jury Report on Water Conservation Rate Setting Page 3 It is anticipated that AB 19 will likely be acted on in 2012. There will need to be much more discussion and modification to the requirements of the proposed legislation to build consensus among all parties affected by this.legislation. Based on the discussions above, the City of San Luis Obispo will not be evaluating an option to amend the Municipal Code, at this time,to require individual meters for all new apartment units. FISCAL IMPACT There is no fiscal impact associated with this letter of response to the Grand Jury. ALTERNATIVE The Council may choose to modify the attached response letter to the Grand Jury and Presiding Judge. ATTACHMENTS 1. Grand Jury Report—"Rate Setting as a Water Conservation Tool" 2. City Council response to the Grand Jury's report 3. Draft Assembly Bill No. 19 C13-3 RATE SETTING AS A WATER CONSERVATION TOOL "INTRODUCTION/PURPOSE. The State of California(State) is subject to periodic drought conditions. The Central Coast and San Luis Obispo County(County) are among the drought-prone areas. The State advocates a number of.wAter conservation plans, among which is a method of pricing water and sewer services using rates that will encourage conservation. This Grand Jury investigation examines the pricing of residential water services in the County and the disclosure of pricing on bills to determine if they do, in fact, promote water conservation.' The Grand Jury report includes a limited review of sewer service pricing related to volume of water used. The report also includes a limited review of whether or not a link between water usage and sewer charges is disclosed on customer bills. ORIGIN This investigation was initiated by the Grand Jury. PROCEDURE The Grand Jury reviewed pricing of water service by most public providers within the County to determine if rate structures are designed to promote water conservation. Providers included in this report are six of the County's seven cities, the Atascadero Mutual Water Company(MWC), ' Conservation can result in reduced revenue to cover fixed costs. However, without conservation there could be greater costs for additional water and infrastructure. 2010-2011 San Luis Obispo County Grand Jury C13-4 Page 1 and nine community services districts (CSDs). The Grand Jury also reviewed a comprehensive sampling of customer bills to determine how effectively customers are notified of potential cost savings when using less water. The effectiveness of pricing methods in achieving conservation was examined, as well. Finally, the Grand Jury reviewed information related to sewer service pricing. This Grand Juryinvestigation included review of: Best Management Practices of the California Urban Water Conservation Council (CUWCC) Water and sewer rate structures and sample bills Water rate studies Various reports and data supplied by providers and the CUWCC Information from the internet.and news articles BACKGROUND In 1977, the California Public Utilities Commission, which is responsible for consumer pricing of services by utilities,2 responded to drought conditions with emergency actions that included distribution by utilities of water conservation kits. California's passage of the 1983 Water Management Planning Act required urban water suppliers with more than 3,000 customers to implement water management plans for conserving water. A 2009 amendment to the California Water Code (SB7)ties State water grants and loans to providers for facility upgrades to implementation of recommended Best Management Practices. Pricing of water and sewer services according to the volume of water consumed can affect customer decisions about conservation, according to the CUWCC. Z Utilities are privately owned companies serving 200 or more customers. Water utilities within San Luis Obispo County are:Golden State Water Company-serving parts of Nipomo Mesa, Los Osos and Edna Valley; Rural Water Company-serving part of Nipomo Mesa'Nacimiento Water Company-serving Oak Shores. 2010-2011 San Luis Obispo County Grand Jury C13-5 Page 2 The CUWCC has formed partnerships among urban water agencies and other entities to increase efficient use of water statewide.3 Providers enter into a Memorandum of Understanding,to implement, when feasible, CUWCC's Best Management Practices. One of the 14 Best Management Practices° is retail pricing, including tiered water rates, which encourages water conservation. In addition to CUWCC encouragement of conservation pricing, setting prices based on water volume consumed is specifically highlighted by the Public Utilities Commission as a way to encourage water conservation. Conservation of water resources is mandated by the State (SB 7)to achieve per capita urban water reduction of 20% by 2020, a goal reflected in the County's General Plan Conservation Element. One of the Conservation Element Policies, WR 4.2, is to "Support water-pricing structures to encourage conservation by individual water users . . . " The Conservation Element, adopted in.2010, cautions that water resources in the County are at a critical juncture as demand approaches sustainable supplies. DISCUSSION Retail Conservation Pricings Water service pricing and billing methods designed to foster conservation are based on customer awareness of the link between increased cost and increased consumption, especially if the cost escalates in atiered fashion as more water is consumed. Similarly, sewer rates based on water consumption can motivate conservation. The amount of water piped into a building is the 3. The cities,community services districts and mutual water company surveyed for this Grand Jury investigation which reported memberships in the CUWCC are: Cities of Paso Robles,Pismo Beach and San Luis Obispo; CSDs for Cambria,Nipomo and Templeton; Atascadero MWC. Some local providers that do not belong to the CUWCC have, nonetheless, implemented its best management practices. ° The CUWCC's Best Management Practices are: retail conservation pricing of water and sewer;conservation practices for utilities;residential plumbing retrofits; water surveys for efficient usage; leak detection and repair; water metering;.landscape conservation and incentives;high-efficiency clothes washer incentives; public information programs; school education programs;non-residential conservation programs;designate conservation coordinator;water waste prohibition;residential ultra-low flow toilet replacement. s Conservation pricing means charging for services based on water volume consumed. 2010-2011 San Luis Obispo County Grand Jury Page 3 C13-6 amount piped out for sewer disposal,minus water for outside use. The CUWCC recommends that both water supplied and water disposed of be priced according to volume of water consumed. CUWCC assumes that the incentive to conserve water is greater when both water and sewer are volume priced. The focus of this report is on water service pricing with a concentration on residential customers. Residential customers, overall, consume the majority of urban water. Water Rate Structures According to the CUWCC (Best Practice 11), "Conservation pricing provides economic incentives(a price signal) to customers to use wafer efficiently. Because conservation pricing requires a volumetric rate, metered water service is a necessary condition of conservation pricing. " CUWCC staff advises that, while a uniform.rate structure which prices each unit of water the same promotes conservation, because higher usage means higher cost, a tiered rate structure which escalates pricing as total volume 'increases, is preferable for achieving conservation. Rate structures usually contain abase rate, sometimes referenced as a capacity fee, for the fixed costs of providing service. The base rate is charged whether or not water is used during the billing cycle. Base rates can be uniform or vary by category of customer. Some rate structures include a fixed quantity of water in the base rate with a charge for excess usage. Water providers rely on rate studies to develop rate structures that meet various goals. These goals typically involve a secure supply of water affordable to customers,financial stability for the provider and incentives for customers to conserve. Local Water Rate Structures The table below describes the water rate structures for all surveyed providers. All have rate structures that are volume-based. Most rate structures have tiered pricing; a few have a uniform volume rate. 2010-2011 San Luis Obispo County Grand Jury C13-7 Page.4 WATER RATE STRUCTURES Water Provider Residential Notes Cities ARROYO GRANDE base+4 tiers ATASCADERO MWC base+4 tiers Base includes minimum water volume base+5 tiers,SF 5`h tier,added during drought,has been retained GROVER BEACH base+4 tiers MORRO BAY base+escalating scale Base includes minimum water volume Rates unchanged since 1994 PASO ROBLES. (2) base+volume Base expected to be eliminated soon PISMO BEACH base+2 tiers,SF base+volume,MF SAN LUIS OBISPO (1)3 tiers Community Services Districts AVILA BEACH(2) . base+volume Base includes minimum water volume CAMBRIA base+9 tiers Base includes minimum water volume HERITAGE RANCH base+2 tiers Base includes minimum water volume . LOS OSOS base+4 tiers NIPOMO base+2 tiers OCEANO base+2 tiers SAN MIGUEL base+3 tiers Base includes minimum water volume SAN SIMEON(2) base.+volume TEMPLETON base+4 tiers Base includes minimum water volume SF-Single Family Residential MF-Multi=Family Residential (1) No Base Rate (2) No tiers 2010-2011 San Luis Obispo County Grand Jury C13-8 Page 5 . In 2009,the MWC added a rate tier that targets high users among single family residential customers,its largest customer category. This tier addressed the fact that 25% of single family customers accounted for 57%of total water demand in the peak consumption summer months.6 Although not reflected in the above table, both Atascadero MWC and Cambria CSD temporarily increased rates during the drought. Water rate structures are reviewed by providers with varying frequency. Some are adopted with . automatic annual rate increases spanning several years. The rate schedule for the City of.Morro Bay is the least current of providers surveyed, unchanged since 1994. Water Bills It would seem logical that water conservation due to tiered pricing is most effective when . customers are aware of how water services are priced and'can readily understand the cost benefit of reducing water use. Such awareness can be promoted by billing methods that highlight the higher unit costs experienced as usage increases. Also, information about sewer charges based on water volume would illuminate the potential savings available through reducing water usage. Of the providers surveyed,Atascadero MWC employs a billing system that most actively encourages conservation. Water bills.show the base rate, tier rates, tier volume usage, and tier charges. Arroyo Grande shows water rate tiers on most of its bills and, although its system does not.compute tier usage,this can be done by customers based on the data furnished. Other, providers using water rate tiers do not show them on bills. In addition, those providers of both water rates and water volume-based sewer rates do not indicate this on bills, with the exception of the City of San Luis Obispo. 6 The provider's data management capabilities include water demand by number of lots of various sizes to facilitate implementation of State requirements for conserving landscape water. Residential sewer service provided by Arroyo Grande,Grover Beach,Morro Bay, San Luis Obispo,Avila Beach CSD,Cambria CSD, Heritage Ranch CSD,and San Simeon CSD is based on volume of water consumed. Atascadero, Paso Robles,Pismo Beach,Nipomo CSD,Oceano CSD, San Miguel CSD,and Templeton CSD do not base residential sewer rates on water volume. 2010-2011 San Luis Obispo County Grand Jury -9 Page 6 While an ideally informative water bill would be customized to show customers the potential cost saving from avoiding higher tier usage, doing so involves computer software capabilities that may not be available or affordable. Determining the data capability of providers is outside the scope of this investigation. The following table highlights features of water bills and categorizes these features as informative or not informative. WATER BELLS Not Informative Informative Cities ARROYO GRANDE Water tier consumption not shown Shows water tiers for residential Compares current&past usage ATASCADERO MWC Shows tier rates,usage and charges Compares,current and past usage monthly water conservation tip GROVER BEACH Water tiers and tier consumption not shown 12 months usage history MORRO.BAY No reference to rate scale. PASO ROBLES 12 months usage history monthly conservation message PISMO BEACH Water tiers and tier consumption not shown 12 months history SAN LUIS OBISPO Water tiers and tier consumption not shown Compares current and past usage Community Services Districts AVILA BEACH CSD Rate for water not shown CAMBRIA CSD. Water tiers and tier consumption not shown Compares current and past usage HERITAGE RANCH CSD. Water consumption not shown Water tiers and tier consumption not shown 12 months usage history LOS OSOS CSD-water only Water tiers and tier consumption not shown 12 months usage history NIPOMO CSD Water tiers and tier consumption not shown Compares current and past usage Message box unused Message box OCEANO CSD Water consumption not shown 12 months usage history Water tiers and tier consumption not shown SAN MIGUEL CSD Water tiers and tier consumption not shown SAN SDJEON CSD Rate for water not shown TEMPLETON CSD Water tiers and tier consumption not shown Compares current and past usage 2010-2011 San Luis Obispo County Grand Jury C13-10 Page 7 Gauging Effectiveness of Conservation Water Pricing The State's experience during the drought periods that plagued California in the 1980s showed that doubling the price of water drove overall.household consumption down by one third; but, households earning under$20,000 cut consumption by one half while those earning more than $100,000 reduced use by only 10%.8 In response to the most recent drought conditions, some water providers, such as Arroyo Grande, implemented extensive water conservation incentives and imposed stringent conservation requirements. A success rate of around 20% reduction in water usage was reported. However, this overall success rate does not measure the success of individual conservation measures. Thus, the specific success of the water rates vis-a-vis the total effort is not known. The effect of conservation pricing was not evaluated prior or subsequent to the drought by Arroyo Grande and other providers. There is one probable exception to the unknown effectiveness of conservation pricing: During the drought,the City of San Luis Obispo did not experience a water shortage because it has several sources of water, including an expanding use of reclaimed water. Also, City water conservation programs had been ongoing for many years prior to the drought. In 2008, the City established water conservation sewer pricing for single family residential customers, at which time these customers had average water use of eight units. In each of the next two years, the water use was reduced by one unit, for a total reduction of 25°/x.9 The Utility Conservation representative for the City attributes the reduced water use to water conservation pricing of sewer service,together with information provided to customers about the opportunity to reduce the cost by reducing water use. s Newsweek, 10/18/10,pp 46,47 9 Among the surveyed providers, San Luis Obispo uses a unique sewer rate structure for single-family residential customers. Each has an annual water"cap"or base that is determined by the customer's water usage averaged over a three-month winter period when usage is typically lowest. This cap establishes the annual sewer base rate, effective each July. Volume above this base is charged at a uniform rate. At the end of summer,owners of single Emily residences are advised by the City to reduce landscape irrigation and are informed that the average water use over a three-month period in the winter will affect their monthly sewer charge for a year. Single family residential bills indicate the connection between sewer charges and water use.. 2010-2011 San Luis Obispo County Grand Jury C13-11 Page 8 Water Meters The CUWCC emphasizes that conservation pricing is dependent on water meters. The Grand Jury learned that the 176 water customers of S & T Mutual Water Company in the Los Osos area have no water meters. This company is among at least 125 small water companies, defined as having 15-199 connections, in the County that lack meters for individual connections.to The Grand Jury additionally learned that apartment buildings typically have only one master water meter for the building and a separate landscape meter, instead of having meters for individual apartment units. Without residents knowing how much water they consume or having to pay according to usage,there is no incentive to conserve on the basis of potential cost savings. Metering individual apartment units of new buildings could add considerably to construction costs and retrofitting meters would be even more costly. Water providers charge several thousand dollars for a meter to cover hook-up and other administration costs. Metering individual units would likely result in increased costs to tenants. An additional consideration is that apartment tenants have more turnover than residents of other types of housing and, therefore, collections for apartment unit water bills would probably be more difficult. There is an alternative to individual apartment units being metered for hook-up to'a water service Provider. Relatively inexpensive flow meters can be purchased independent of a water provider and unconnected to a water service for billing. The purpose of this additional metering would be to enable apartment building owners to determine the actual water usage of individual units, in order to bill the tenants. An expected outcome would be conserved water by tenants to reduce their costs, with a result that metered apartments could have a competitive rental advantage. Owners of buildings with individually metered units would have an option of charging tenants for the actual water they consume. No County ordinance requires water meters for urban development outside of cities that are served by a water company. Also, no ordinance of either the County or the seven cities requires 10 Effective 6130/11,the State requires metering of source wells for systems serving 15 or more connections. 2010-2011 San Luis Obispo County Grand Jury 013-12 Page 9 individual apartment units within a building to have metered water usage. However,parallel County.ordinances promote water conservation for urban development outside of cities: • For Los Osos,retrofits of water fixtures upon change of property ownership and retrofits for existing development to offset water use for new development are required • For Nipomo, retrofits of water fixtures upon change of property ownership and low water use landscaping standards for new development are required CONCLUSION A few water service providers have not incorporated tiered pricing into their rate structures. Of those providers using tiered rates, only two indicate tiers on customer bills and only one shows usage by tiers. Thus, water bills are underutilized for promoting conservation. Several sewer service providers base charges on volume of water used, but only one clearly indicates this on customer bills. Therefore, sewer bills are also underutilized for promoting water conservation. Additional opportunities for water conservation exist through metering of both small water system customers and individual apartment units. 2010-2011 San Luis Obispo County Grand Jury C13-13 Page 10 FINDINGS & RECOMMENDATIONS FINDING 1: Mono.Bay has not revised its water rate schedule since 1994. RECOMMENDATION 1: Morro Bay should review its water rate schedule. FINDING 2: Paso Robles, Avila Beach CSD, and San Simeon CSD have uniform water rates that do not increase unit cost as consumption increases. RECOMMENDATION 2: Paso Robles, Avila Beach CSD, and San Simeon CSD should consider adopting tiered water rates that target high volume users. FINDING 3: Only Atascadero MWC bills show rate tiers, tier consumption and tier charges. RECOMMENDATION 3e Arroyo Grande, Grover Beach, Morro Bay,Pismo Beach; San Luis Obispo, Cambria CSD, Heritage Ranch CSD, Los Osos CSD, Nipomo CSD, Oceano CSD, San Miguel CSD, and Templeton CSD should consider revising water bills to show rate tiers, water usage for each tier and the charges for each tier. FINDING 4: Water meters are not used for all urban development outside of cities served by a water company. RECOMMENDATION 4: The County should consider adopting an ordinance for urban development outside of cities served by a water.company, which would require that new development be metered and that existing developments be metered upon ownership transfer. 2010-2011 San Luis Obispo County Grand Jury Cj3-j4 Page I I FINDING 5: Apartment buildings in the seven cities and urban areas outside of the cities typically do not have water meters that register indoor water use for individual units. RECOMMENDATION 5: The cities and County should consider adopting an ordinance that would require new apartment buildings to have meters that register indoor water used by individual units. To reduce costs, meters could be a type intendedonly for use by apartment building owners, instead of those supplied by water providers for water service hook-ups. FINDING 6: Residential sewer providers that base charges on volume of water consumed do not clearly indicate on their bills that water volume affects sewer charges, with the exception of the City of San Luis Obispo RECON 4ENDATION 6: Arroyo Grande, Grover Beach, Morro Bay, Avila Beach CSD, Cambria CSD, Heritage Ranch CSD, and San Simeon CSD should consider.revising sewer bills to. show that water usage affects sewer charges. REQUIRED RESPONSES The Board of Supervisors of San Luis Obispo County is required to respond to Findings 4 and 5 and Recommendations 4 and 5. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The Department of Planning and Building of San Luis Obispo County is required to respond to Findings 4 and 5 and Recommendations 4 and 5. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by August 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. 2010-2011 San Luis Obispo County Grand Jury C13-15 Page 12 The City of Arroyo Grande is required to respond to Findings 3,°5 and 6 and Recommendations 3,-5 and 6. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The Atascadero Mutual Water Company is required to respond to Finding 5 and Recommendation 5. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The City of Grover Beach is required to respond to Findings 3, 5 and 6 and Recommendations 3, 5 and 6. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011.: Please provide a paper copy and an electronic version of all responses to the Grand Jury; as well. The City of Morro Bay is required to respond to Findings 1, 3, 5 and 6 and Recommendations 1, 3, 5 and 6. The responses shall be submitted to the Presiding.Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The City of Paso Robles is required to respond to Findings 2 and 5 and Recommendations 2 and 5. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses:to the Grand Jury, as well. The City of Pismo Beach is required to respond to Findings 3 and 5 and Recommendations 3 and 5. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. 2010-2011 San Luis Obispo County Grand Jury C13-16 Page 13 The City of San Luis Obispo is required to respond to Findings 3 and 5 and Recommendations 3 and 5. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury,as well. The Avila Beach Community Services District is required to respond to Findings 2 and 6 and Recommendations 2 and 6. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The Cambria Community Services District is required to respond to Findings 3 and 6 and Recommendations 3 and 6. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011: Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The Heritage Ranch Community Services District is required to respond to Findings 3 and 6 and Recommendations 3 and 6. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The Los Osos Community Services District is required to respond to Finding 3 and Recommendation 3. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The Nipomo Community Services District is required to respond to Finding 3 and Recommendation 3. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. 2010-2011 San Luis Obispo County Grand Jury C13-17 Page 14 The Oceano Community Services District is required to respond to Finding 3 and Recommendation 3. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The San Miguel Community Services District is required to respond to Finding 3 and Recommendation 3. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011.. Please.provide a paper copy and an electronic version of all responses-to the Grand Jury, as well. The San Simeon Community Services District is required to respond to Findings 2 and 6 and Recommendations 2 and 6. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronicversion of all responses to the Grand Jury, as well. The Templeton Community Services District is required to respond to Findings 3 and 6 and Recommendations 3 and 6. The responses shall be submitted to the Presiding Judge of the San Luis Obispo Superior Court by September 14,2011. Please provide a paper copy and an electronic version of all responses to the Grand Jury, as well. The mailing addresses for delivery are: Presiding Judge - Grand Jury Presiding Judge Charles S. Crandall Superior Court of California San Luis Obispo County Grand-Jury P.O. Box 4910 1050 Monterey Street San.Luis Obispo, CA 93402 San Luis Obispo, CA 93408 The email address for the Grand Jury is: GrandJurynco.slo.ca.us 2010-2011 San Luis Obispo County Grand Jury C13-18 Page 15 �flti►IIl�illlllllh I� �� Cly, of sAn tutS OBISPO 879 Morro Street•San Luis Obispo, CA 93401 July 20, 2011 Honorable Judge Charles S. Crandall Superior Court of California 1050 Monterey Street San Luis Obispo, CA 93408 Dear Judge Crandall, On July 19, 2011, the San Luis Obispo City Council reviewed the Grand Jury's report "Rate Setting as a Water Conservation Tool". The City Council concurs with the findings in the report and one of the two recommendations relative to the City of San Luis Obispo as detailed in the enclosed staff report. The City of San Luis Obispo is a leader in the State and County relative to water conservation practices and has been ever since the late 1980's when our community faced a very challenging drought period and limited water resources. The City is planning to implement recommendation #3 in the Grand Jury's report by the end of this year. Recommendation #5 relative to separate water meters for apartment buildings is much more complex. The City will not be pursuing this recommendation at this time. Please refer to the enclosed staff report for more detailed discussion on the two recommendations. The Council appreciates the findings made by the Grand Jury and its efforts to conserve water resources in the County. If there are questions or comments regarding the City's response to the report, please do not hesitate to contact Gary Henderson, Water Division Manager, at 781-7237. Respectfully submitted, Katie Lichtig City Manager Enclosure: July 19, 2011, Council Agenda Report c: San Luis Obispo County Grand Jury O The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. ACk �� Telecommunications Device for the Deaf(805)781-7410 '4k13-19 X2_19 AMENDED IN ASSEMBLY APRIL 15,2011 AMENDED IN ASSEMBLY MARCH 23, 2011 AMENDED IN ASSEMBLY MARCH 17,2011 CALIFORNIA.LEGISLATURE-2011-12 REGULAR.SESSION ASSEMBLY BILL No. 19 Introduced by Assembly Member Fong December 6, 2010 An act to add.Chapter 4.2 (commencing with Section 1963.010) to Title S of Part 4 of Division 3 of the Civil Code, and to add Chapter 8.5 (commencing with Section 537) to Division 1 of the Water Code, relating to water. LEGISLATIVE COUNSEL'S DIGEST AB 19,as amended,Fong.Building standards:water meters:multiunit Structures. The Water Measurement Law requires every water purveyor to require, as a condition of new water service on and after January 1, 1992, the installation of a water meter to measure water service. That law also requires urban water suppliers to install water meters on specified service connections, and to charge water users based on the actual volume of deliveries as measured by those water meters in accordance with a certain timetable. This bill would require a water purveyor that provides water service to a newly constructed multiunit residential structure or newly constructed mixed-use residential and commercial structure, including a structure that is part of a common interest development, that submits an application for a water connection after January 1, 2014, to-either adopt a general pehey to require the installa.fien of either a WrAer meter, 96 C13-20 AB 19 —2— as defined,or a submeter,as defined;to mettsure water supplied to eaeh or to inform, on _YYpL_.._aC_rnew water sa___hethe_- � .. aawc ___ __meter _ _ . require the installation of a water meter or submeter to measure the water supplied to each individual dwelling unit as a condition of new water service. The bill would require the owner of the structure to ensure that a water submeter installed for these purposes complies with laws and regulations governing installation, approval of meter type, maintenance, reading, billing, and testing of water submeters. The bill would-exeefl exempt certain buildings from these requirements. Existing law governs the hiring of dwelling units. The bill would impose prescribed requirements, including requirements for billing and disclosure, on landlords for submetered water service to individual dwelling units. Voter majority. Appropriation; no. Fiscal committee: no. State-mandated local program: no. The people of the State of California do enact as follows: 1 SECTION 1. Chapter 4.2(commencing with Section 1963.010) 2 is added to Title S of Part 4 of Division 3 of the Civil,Code, to 3 read: 4 5 CHAPTER 4.2. WATER SERVICE 6 7 1963.010. It is the intent of the Legislature in enacting this 8 chapter to do both of the following: 9 (a) To encourage the conservation of water in multifamily 10 residential rental buildings through means either within the 11 landlord's or the tenant's control. 12 (b) To ensure that the practices involving the submetering of 13 dwelling units for water service are just and reasonable, and 14 include appropriatesafeguards for both tenants and landlords. 15 1963.020. As used in this chapter: 16 (a) "Billing agent"means a person or entity who contracts to 17 provide submetering services to a.landlord, including billing. 18 (b) "Landlord" includes all agents of the landlord, billing . 19 agents, successors in interest to the real property interests of the 20 landlord, and persons and entities with which the landlord 96 C13-21 -3— AB 19 1 contracts for billing, meter reading, meter maintenance or repair, 2 or other services in connection with imposing water or sewage 3 service charges. "Landlord"does not include a tenant who rents 4 all or a portion of a dwelling unit to subtenants. 5 (c) "Property" means real property containing two or more 6 dwelling units that is served by a single meter. 7 (d) "Rental agreement"includes afixed-term lease. 8 (e) "Renting" includes leasing, whether on a periodic or 9 . fixed-term basis. 10 "Submeter"means a device that measures water consumption 11 ofan individual rental unit within a multiunit residential structure 12 or mixed-use residential and commercial structure, and which is 13 owned and operated by the landlord "Submeter includes 14 submeters, if more than one submeter is being used to measure 15 water usage in a particular dwelling unit.. 16 (g) "Water service" includes any charges for other services, 17 including sewage or storm water services, that are based on 18 charges for water service. 19 (li) "Water purveyor" means a water purveyor as defined in 20 Section 512 of the Water Code. A landlord complying with the 21 provisions of this chapter shall not be considered a water purveyor. 22 1963.030. A landlord shall not charge tenants separately for 23 water service unless the water and submetering system is installed, 24 operated, and maintained as follows: 25 (a) The submeter is certifiedfor commercial purposes pursuant 26 to law, including, but not limited to, Section 12500.5 of the 27 Business and Professions Code. 28 (b) The installation conforms.to all laws, including, but not 29 limited to, regulations established pursuant to Section 12107 of 30 the Business and Professions Code. 31 (c) The installation was performed by a licensed service 32 provider. 33 (d) The submeter is operated in compliance with regulations 34 established pursuant to Section 12107 of the Business and 35 Professions Code. 36 (e) The submeter for a dwelling unit measures only water that 37 is supplied for the exclusive use of the particular dwelling,unit 38 and only to an area within the exclusive possession and control 39 of the tenant of the dwelling unit. 96 C13-22 A Ui MET�T. AB 19 —4- 1 (fl The primary submeter indicator or remote reader may be 2 easily accessed and read by the tenant of the dwelling unit, and 3 read by the owner landlord without entering the dwelling unit. 4 (g) Each submeter is reinspected and recalibrated within the 5 time limits specified in law or regulation. 6 (h) The plumbing fixtures conform to all laws regarding 7 habitability of dwellings and water conservation. 8 (i) This section.shall not be construed to require a water 9 purveyor to assume responsibility for ensuring compliance with 10 any law or regulation governing installation, certification, 11 maintenance,and testing of water submeters and associated onsite 12 plumbing. 13 1963.040. Prior to executing a rental agreement, the landlord 14 shall clearly disclose the following to the tenant, in writing, in at 15 least 10 point.type, which may be incorporated into the rental 16 agreement: 17 (a) The tenant will be billed for water usage separately from 18 the rent. 19 (b) The average bill for water usage for units at the property 20 over the most recent calendar year, or portion thereof if the 21building is less than one year old. 22 (d) The frequency of submeter readings. 23 (e) The due dates and payment procedures for bills. 24 (1) If a billing agent is used, the name, address, e-mail address, 25 normal hours of operation, and toll-free telephone number of the 26 agent. 27 (g) The date the submeter was last tested and calibrated.and 28 the date by which it must be retested and recalibrated under law 29 (h) A statement in substantially the following form: 30 The landlord(or name of landlord) shall charge you (or name 31 of tenant, or term used in the rental agreement for the tenant)for 32 water use at the same rate that the (purveyor) bills its customers 33 for residential use. Tofind out what the rate charged by(purveyor) 34 is, contact(purveyor) at(address), (telephone number). 35 (i) A statement that the tenant shall only be charged for actual 36 water usage at the exact rates) charged by the water purveyor 37 servicing the building for volumetric water usage, and that no 38 other administrative, connection, disconnection, billing, or other 39 periodic fee or charge may be assessed, other than a late fee. If 96 C13-23 TC1�Gb}*��o�T —5 AB 19 1 the landlord reserves the right to charge a late fee, the amount 2 and terms of the late fee shall also be disclosed. 3 0) The location of the submeter, and the directions for the tenant 4 to read the submeter. 5 1963.050. (a) A landlord shall bill a tenant only for volumetric 6 usage of water. The landlord shall not impose any periodic, 7 connection,termination,orotherfee,however denominated,except 8 for late fees or testing fees as provided in this chapter. 9 (b) The amount of the bill shall be calculated by multiplying the 10 water volume, as determined by the submeter for the billing period . 11 in question, times the rate(s)for volumetric usage established by 12 the water purveyor for residential use. 13 (c) If the rates established by the water purveyor change, the 14 bill shall be prorated to reflect the time each rate was in effect.At 15 the landlord's option, the landlord may assess charges for the 16 entire billing period based on the lower rate. 17 (d) If a beginning or ending submeter reading is, in good faith, . 18 not available, the landlord may bill the tenant 75 percent of the 19 amount originally disclosed to the tenant under subdivision.(b)of 20 Section 1963.040. 21 (e) No charges shall be imposed under this chapter if readings 22 have been unavailable for more than three months. 23 1963.060. (a) .The billing cycle shall match.that of the water 24 purveyor. 25 (b) Submeters shall normally be read at the same point in each 26 billing cycle. Submeters may be read within three days of the . 27 normal date. 28 (c) Bills shall be due at the same point in each billing cycle. 29 However, bills shall be due no earlier than five days after mailing, 30 f mailed, or one day after personal delivery. 31 (d) Bills shall include the following information: 32 (1) The beginning and ending submeter readings, the dates 33 read, and the indicated consumption. 34 (2) The unit of measure for the readings and usage. 35 (3) The rate(s) charged per unit of measure. 36 (4) The amount of the current charges. 37 (5) A separate entry showing past due amounts, if any. 38 (6) A separate entry showing any previously-imposed late 39 charges. 40 (7) The total amount due. 96 C13-24 AB 19 —6- 1 (8) The due date for the bill. 2 (9) A statement of the amount of late charges, if any, and when 3 the late charges would apply. Late charges shall be imposed 4 pursuant to Section 1963.110. 5 (10) The name, mailing address, e-mail address, telephone 6 number, and the regular business hours of the person or persons 7 the tenant may call with questions or concerns, and who is 8 authorized to make any necessary adjustments. If a billing agent 9 is used, the name of the entity shall be disclosed and the telephone 10 number shall be toll free. 11 1963.070. If a tenancy begins or ends on a date more than 12 three days from than a normal reading, the submeter shall be read 13 within three days of the beginning or end of the tenancy, and the 14 first and last bills calculated accordingly. Tenancies beginning or 15 ending within three days of a normal reading may be billed based 16 upon the normal reading,for the first or last bills. 17 1963.080. (a) A landlord shall not charge or recover, or allow 18 to be charged or recovered, any of thefollowing: 19 (1) Any additional servicing, administrative, establishment, 20 maintenance, meter reading, meter testing, billing, or submetering 21 fee or other fee whatsoever,however denominated, including those 22 charged by a billing agent. 23 (1) Any fees billed to the landlord by the water purveyor, billing 24 agent, or any other person for any deposit, disconnect, reconnect, 25 late payment, or other similar fees. 26 (3) Any charges by the water purveyor not directly based on 27 volumetric usage, including any base charges, customer service 28 charges, or monthly, bimonthly, or other periodic charges assessed 29 regardless of the volume consumed. 30 (b) This section does not prohibit a landlord from recovering 31 any costs listed in subdivision (a) that are incorporated into the 32 rent for a dwelling unit, if the rent is a fixed amount per rental 33 period,the charges are not listed separately,and the rental charges 34 are otherwise lawful. 35 1963.090. The landlord shall maintain and make available in 36 writing, at the tenant' request, within seven days after the request, 37 the following: 38 (a) All installation and maintenance records of the submeter in 39 the tenant's dwelling unit, including the name, license number, 96 C13-25 -7— AB 19 1 and contact information of the service provider who installed or 2 serviced the submeter. 3 (b). The most recent test results of the submeter in the tenant's 4 dwelling unit. 5 (c) The method and sources used to determine the rate at which 6 the tenant is charged for water. 7 1963.100. (a) If the water system in a dwelling unit does not 8 function properly, including leaks,a fixture allowing unnecessary 9 water consumption, or a malfunctioning submeter, the tenant may 10 request the landlord to repair the problem. The. landlord shall 11 make the repairs within seven days. 12 (b) A tenant may request that a landlord have a submeter tested 13 for accuracy. The landlord shall respond to the request within 14 seven days, and the test shall .be carried out as soon as is 15 practicable. The test shall be performed by a service provider or 16 other person authorized by law to perform the test.If the test shows 17 that the submeter is inaccurate beyond the tolerances established 18 by law, the landlord shall repair or replace it..If the test shows the 19 submeter was indicating more usage than the true amount, beyond 20 established tolerances, the landlord shall refund the estimated 21 overcharge to the tenant within 30 days of receipt of the results. 22 (c) The landlord shall pay for the cost of the test if either: 23 (1) The tenant requests the test because the submeter has 24 indicated that water usage has increased more than 25 percent 25 for two consecutive billing periods over the previous three billing 26 periods. 27 (2)`The submeter is found to be inaccurate beyond the tolerances 28 established by law 29 (d) The tenant shall pay for the test in all other cases, up to a 30 maximum offifty dollars ($50). 31 (e) The landlord is not required to test a submeter under 32 subdivision (b), ,if the submeter was tested and found accurate 33 within two years prior to the tenant's request, and the landlord 34 provides the written results of the test to the tenant. However, the 35 tenant may require the meter. to be tested if the tenant pays in 36 advance for the entire cost of the test. 37 1963.110. (a) A landlord may impose a late fee of up to 5 38 percent for any bill not paid within 20 days of its due date. If the 39 20th day falls on a Saturday, Sunday, or holiday, the late fee shall 40_ not be imposed until one day after the extended time for payment. 96 C13-26 AB 19 —8— 1 (b) (1) Notwithstanding Section 1950.5, if a bill remains unpaid 2 after the time described in subdivision (a) expires, the landlord 3 may, in lieu of a late fee, deduct the amount due from the tenant's 4 security deposit. The landlord may require an additional deposit 5 of security following a deduction, if the deposit would be otherwise 6 lawful under Sections 827 and 1950.5. 7 (2) The landlord may also deduct a water bill from the security . 8 deposit upon the ending of a tenancy,provided that the last water 9 bill showing the amount due is attached to the documentation 10 required by Section 1950.5, and all the other requirements of that 11 section are met. 12 (c) If a bill remains unpaid for 30 days after its due date, the 13 nonpayment shall constitute a curable breach of a material lease 14 obligation. The landlord may commence actions to remedy the 15 breach, as provided in the Code of Civil Procedure. 16 (d) Water charges under the chapter shall not constitute rent. 17 (e) A landlord shall not shut off the water or otherwise interfere 18 with the provision of water service to a dwelling unit for any 19 reason, including nonpayment of a bill assessed pursuant to this 20 chapter. 21 1963.120. A tenant renting to subtenants may opt not to comply 22 with this chapter, if the sum total of any separate water charges 23 assessed to the subtenants does not exceed the amount paid by the 24 master tenant to the landlord under this chapter. 25 1963.130. In addition to actual damages sustained by the tenant 26 for a violation of this chapter, the tenant may recover from the 27 landlord three times the amount of actual damages,a civil penalty 28 equal to one month's rent, reasonable attorney's fees, and court 29 costs. However, the landlord is not liable for a civil penalty if the 30 landlord proves that the violation was a good faith, unintentional 31 mistake. 32 1963.140. A city, county, or district may enforce this chapter. 33 1963.150. The rights or obligations established under this 34 chapter shall not be waived.Any purported waiver is void. 35 SEGT�tivm'1. . 36 SEC. 2. Chapter 8.5 (commencing with Section 537) is added 37 to Division 1 of the Water Code,to read: 96 C13-27 -9= AB 19 1 CHAPTER 8.5. MULTIUNIT STRUCTURES 2 . 3 537. (a) The following definitions govern the construction of 4 this chapter- 5 , mew a meter t6f measures water wage 6 7 areas, and is read by the water purveyor. 8 (2) 9 (1) "Meter"has the same meaning as"water meter"in Section 10 516 of the Water Code. 11 {� 12 (2) "Submeter"means a device that measures water consumption 13 of an individual unit within a"mter-metered sftetwe multiunit 14 residential structure or mixed-use residential and commercial 15 structure,and is read by the owner of the structure or the owner's 16 agent. 17 (b) Structures in all of the following categories shall be exempt 18 from the provisions of this chapter: 19 (1) Low-income housing: For purposes of this paragraph, 20 "low-income housing"means a residential building financed with 21 low-income housing tax credits, tax-exempt mortgage revenue 22 bonds, general obligation bonds, or local, state, or federal loans 23 or grants, for which the rents of the occupants in lower income 24 households,as defined in Section 50079.5 of the Health and Safety 25 Code, do not exceed rents prescribed, by deed restrictions or 26 regulatory agreements pursuant to the term_ s of the financing or 27 financial assistance,and for which not less than 25 percent of the 28 dwelling units within the building aredesignated for occupancy 29 by lower income households,as defined in Section 50079.5 of the 30 Health and Safety Code. 31 (2) Student dormitories. 32 (3) Long-term health care facilities,as defined in Section 1418 33 of the Health and Safety Code. 34 (4) Time-share property, as. defined in subdivision (aa) of 35 Section 11212 of the Business and Professions Code. 36 (c) This chapter does not apply to a structure that is greater than 37 four stories in height above grade if the owner,or his or her agent, 38 demonstrates to the satisfaction of the water purveyor that the 39 structure's plumbing configuration incorporates multiple points 96 C13-28 AB 19 —10— 1 of entry in each dwelling unit and renders the installation of 2 submeters infeasible. 3 (d) A-ffieter-er submeter used to measure water supplied to an 4 individual residential unit that is required to be installed by a water 5 purveyor pursuant to this chapter, shall be of a type approved 6 pursuant to Section 12500.5 of the Business and Professions Code, 7 and shall be installed and operated in compliance with regulations, 8 established pursuant to Section 12107 of the Business and . 9 Professions Code. 10 538. . (a) Each water purveyor that sells,leases,rents,furnishes, 11 or delivers water service to a newly constructed multiunit 12 residential structure or newly constructed mixed-use residential 13 and commercial structure for which an application for a water 14 connection,or more than one connection,is submitted after January 15 1,2014,shall require the installation of a water meter or submeter 16 to measure the water supplied to each individual dwelling unit as 17 18 determine il pro 19 20 22 of the pokey. 23 .(2) E)n an ittdMdtwA 24 basis, , i , tod 25ohe�er 26 meter or submeter is required to be installed to measure Mt 27 a 28 condition of new water service. 29 (b) (1) If the water purveyor requires installation of submeters 30 pursuant to subdivision(a),the owner of the structure shall ensure 31 that each submeter installed complies with all laws and regulations 32 governing installation, approval of meter type, maintenance, 33 reading,billing, and testing of water submeters. 34 (2) This subdivision does not require a water purveyor to fund 35 or assume responsibility for ensuring compliance with any law or 36 regulation governing installation, approval of submeter type, 37 maintenance,reading,billing, and testing of water submeters and 38 associated onsite plumbing. 39 40reet4y ' or 96 C13-29 -11- AB 19 1 , earmeetion; or me of a 2 submeter that is insWled by the owner or his or her agent. 44tis 3 4 fees or ehftes for meters or eenneetion 5and iflstAftfien of wat&perveym to eelleet meters,or other fees or eharges asseei6ted wi . 6 Providing and maii�water serviee;as deseribed in the wate 7 purveyor's 8 (d) 9 (c) This section shall not restrict the authority of a water 10 purveyor to adopt and implement a program for the use of water I1 meters or submeters for multiunit residential structures or 12 mixed-use residential and commercial structures that promotes 13 water conservation, at least as stringently, as the requirements of 14 . this section. 15 539. Each water purveyorthat sells, leases, rents,furnishes; 16 or delivers water service to a multiunit residential structure or 17 mixed-use residential and commercial structure that is part of a 18 common interest development for which an application for a water 19 connection, or more than one connection, is submitted after 20 January 1, 2014,shall require the installation of a water meter to 21 measure water supplied to each individual dwelling unit as a 22 condition of new water service. 23 539- 24 540. It is the intent of the Legislature that this chapter should. 25 not be construed to impose costs on any local government agency, 26 except to the extent that the local government agency is a water 27 purveyor 0 96 C13-30