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HomeMy WebLinkAbout02/00/1990, 3 - REVIEW OF MANDATORY WATER CONSERVATION METHODOLOGY 1 MEETING DATE: Cllr/ Of San Lula OBISPO - February COUNCIL AGENDA REPORT REM NU ER: FROM: William T. Hetland, Utilities Director ^' Allen Short, Water Division Manager SUBJECT: Review of Mandatory Water Conservation Methodology RECOMMENDATION: Reviewthe analysis of the mandatorywater conservation methodologies and provide staff appropriate direction. SUMMARY: The City's Water Operational Plan Policy Statement establishes a procedural method to monitor surface water supplies. The plan implements either voluntary or mandatory water conservation measures at predetermined reservoir storage levels. Staff investigated several water conservation programs and methods before selecting the current mandatory water conservation program. Council adopted the percentage reduction with a seasonal allotment method. Because of concerns about the equity of the existing program and the potential that the City may need to implement greater levels of conservation, this report reviews the current program suggesting changes and discusses two alternative per capita conservation methods. The key issues that the Council needs to address are: 1. Should the current water conservation method be modified? 2. If the method is to be changed, what method should be selected? 3. When should the changes be implemented? BACKGROUND: In 1985, the City adopted the Annual Water Operational Plan Policy Statement. The plan establishes a procedural method to monitor the City's surface water supplies. Additionally, the plan implements either voluntary or mandatory water conservation measures at predetermined reservoir levels. The City Council on April 5, 1989 adopted an ordinance and policy resolution declaring a water shortage emergency condition imposing a mandatory water conservation program. The program was designed to achieve an over-all reduction in consumption of twenty percent (20%). To accomplish this a percentage reduction, seasonal allotment method with a life-line allowance was implemented. There have been minor adjustments to the program to correct inequities that have developed. The City's surface supplies are approaching the severe level. Based upon the current policy, water consumption should be reduced by 35%. Concern has been expressed that the existing mandatory water conservation program has inequities that should be eliminated before more stringent conservation measures are implemented. Therefore, it is appropriate that the mandatory water conservation program be reviewed. Current Program Review The mandatory water conservation program was the first carried out by the City. Staff reviewed what other utility companies and cities had experienced. The goal was to identify pitfalls and learn from the experiences of others. However, staff realized it was not possible to develop a perfect program. Any program would require review and modification to customize it to the needs and concerns of the water customers of San Luis Obispo. I , I�► ��i���iIIIII�II ���U city of san h.. oBispo COUNCIL AGENDA REPORT Water Conservation Methodology Page 2 The City Council authorized a seasonal allotment method which includes the following features: • Adjustment for seasonal usage. • Target reductions by the type of user. • Lifeline allowance of 21 units and a ceiling of 40 units for single family residences. • Allocation adjustment process. The present system sets target allocations based upon 1987 consumption records. If in that year there was high usage, the target allocation will be high. If conservation measures were implemented during or before the base year, the target allocation will be low. As a result, the same size families with similar houses and yard sizes could have different water allocations based on their water use habits during the 1987 base year. An allocation adjustment process was developed and lifeline and ceiling amounts for residential accounts were established to better develop equity among the different water consumers. This program also considers class of user(residential vs commercial)and establishes an adjustment process. The adjustment process includes guidelines which consider household size, base year, medical needs, and redistribution of the existing allocation. Due to these added equity features, the current mandatory water conservation program is relatively complex in nature. This makes it more difficult to communicate to the public and to administer by the staff, but it does significantly improve equity. Review of Conservation Methods Though there are many different types of mandatory water conservation methods, staff's investigation shows none of them have universal acceptance as being the preferred method. As mentioned before, several water conservation methods were reviewed before implementation of the current program. Those included: 1. Percentage Reduction 2. Percentage Reduction with a Seasonal Allotment 3. Uniform Allocation per Type of Dwelling Unit 4. Individual Allowance (Per Capita) This report will provide further review of two basic methods most appropriate to the City, based on our experience to date. Those two methods with options are: A. Percent Reduction Method B. Per Capita Method 1. Survey Based Option 2. Household Based Option Criteria for Analyzing Methodology During the initial development of the mandatory water conservation program, City staff developed a list of criteria guide in the selection of the method which would be best for the City of San Luis Obispo. The criteria are summarized below in order of priority. 1. Considered to be a fair. 2. How well can it be understood and communicated to the public. 3. Can it be administered with minimal costs and staffing requirements. These are the same criteria which should be used for reviewing any changes to the existing program. 3—� II�n��,�N►mll�llll��►��u�i �U city of San LUIS OBISPO AHMM;d COUNCIL AGENDA REPORT Water Conservation Methodology Page 3 A. PERCENTAGE REDUCTION The percentage reduction with seasonal adjustment method assigns each customer class a consumption reduction goal as a percentage of the consumption level used in a similar billing period during a normal season. The seasonal allotment adjusts this goal during the year to allow for the increased usage due to irrigation during the summer months and a reduced level of consumption during the winter months. If it is decided to use this method for the 350/0 conservation target, staff recommends some modifications to improve the equity and achieve a greater level of conservation. These are: • Continue target reductions by the type of user. • Reduce lifeline allowance to 10 units and ceiling to 25 units for a single family residence. • Continue allocation adjustment process for special cases. • Eliminate seasonal adjustment. • Increase percentage of reduction from the commercial/industrial sections. • Continue excess water surcharges of 100% and 200%. Under a revised program staff would recommend a reduction of the ceiling limit to 25 units, based upon the following: 1. A large portion of the reduction would be obtained from those customers who used more than of 25 units. 2. Most of the excess over 25 units comes from irrigation. 3. Establishing a ceiling level which would comply with the mandate of 35% percent reduction in consumption while providing savings which could be allocated back to those customers for whom further reductions would provide extreme hardship. I The "lifeline" allowance of 10 units per billing cycle is recommended. The 10 units sets a floor below which no excess use surcharge will occur. This lifeline level, in combination with a lower ceiling, will place a greater demand on the higher use consumers to conserve more water. It will also continue to give a break to the lower water consumers. Due to the greater size of the required reduction at a 35% conservation level, there is.no significant savings that can be achieved by assigning seasonally adjusted targets. Therefore staff recommends elimination of the seasonal adjustment. This will also help communication of the proposed program. To ensure compliance with the mandatory conservation program, an excess water use surcharge will be imposed if the customer's allotment is exceeded. The current surcharge structure is recommended to continue: a 100 percent surcharge is applied when there is an increase in usage above the target allocation. If the customer exceeds the base year consumption, the surcharge will be 200 percent of the total water bill. This plan is proposed in Table I. Analysis Trained staff for program implementation is in place. The City's water conservation "hotline" staff is experienced and knowledgeable in the adjustment process. The computer program which generates the target allocations, water bills and surcharges is in place. Reprogramming to implement a change from 20% to 35% is achievable at an additional cost of less than $10,000. I Most of water conservation would occur in a reduction of irrigation by higher use consumers. No census is required, thereby saving cost, time and staff. The largest water users are reduced the �3 1i�61�1ti6vllllll��►i����I► city of san tins mspo WMEMN COUNCIL AGENDA REPORT Water Conservation Methodology Page 4 Table I Percent Target Reduction Cateeory Percent I. Residential A. Single Meter 3540 B. Multi-Family 30% II. Commercial/Industrial 25% II1. Institutional 50% IV. Landscape 700 i most. Variations in individual needs for laundry facilities and personal needs will be accounted for. The proposed program is a minor change to the existing program and therefore familiar to the consumers, making the changes easier to communicate. This method is perceived as being less equitable than others. Some customers with equal size households and landscaping may receive allocations higher than similar customers simply because of their past water usage habits. It does not have a seasonal adjustment, greatly impacting landscape irrigation. It is still a relatively complex program. The number of individuals in each dwelling is not directly considered. I B. PER CAPITA METHOD j I i The per capita allocation method provides that all residential occupants receive the same amount of water per day with some decrease in allocation as the number of residents increase in the living unit. Commercial/industrial accounts reductions would still be based on a percentage reduction basis since there is no simple way to calculate a per capita amount for those accounts. Staff has surveyed nine cities and water agencies throughout California that have water rationing programs. Monterey Peninsula Water Management District and the City of Santa Cruz Water Department are the only agencies that have implemented a mandatory water conservation program using a per capita allocation method. Monterey's program is a combination program using both per capita and per cent reduction depending on which method provides the most water to the customer. � The Santa Cruz program is not currently being implemented. Based on a review of those programs staff developed two options for a per capita program for San Luis Obispo. The first option is to perform a census of individuals in each household by a survey. The second is to assume a fixed per capita amount for each household with an adjustment process available for those households which do not meet the basic assumption. Option 1 - Survey Based Under the per capita method you must know how many people live in a household. Census forms would be developed and sent either with the water bill or independently to each customer, basically asking how many people reside in each residence. A sample census form is attached. Additional information could be placed on the survey form. All information requested which relates to the water conservation program would be mandatory. Additional information would only be voluntary. Staff recommends that the forms be kept as simple as possible and not include a lot of miscellaneous information. All water customers would be responsible for returning the census form. If a customer did not respond, a life-line allocation would be assigned to their account. This system is based upon I��n���HilVllllllllll°a���N city of san lu. , oBispo SlaZe COUNCIL AGENDA REPORT Water Conservation Methodology Page 5 the honesty and integrity of our customers, therefore spot verifications by field representatives would be conducted only if an occupant's response seemed high or unreasonable, based on records. Monterey Peninsula Water Management District hired McGraw-Hill, an outside consulting firm, to coordinate their initial census. Their approximate cost for the census form, information disks, and consultation fee was $13,000. They are currently putting together an estimate to perform a similar contract for the City of San Luis Obispo. In Monterey a staff of ten (10) was required to process and implement the results of the census. Santa Cruz Water District census program has been in effect i for 13 years. Their staff reports that it is impossible for them to determine the initial cost of the program. Since the initial census, it is standard operating procedure to maintain the data base at no additional cost or manpower requirements. The percentage reduction method would continue to be used to achieve mandatory water conservation levels for the commercial and industrial accounts. The Monterey Peninsula Water Management District provides an option to the commercial/industrial accounts. Businesses can choose the percentage reduction allotment method or can request an optional baseline standard where the District has established a table listing types of businesses and estimated usage in acre feet per year during mandatory water conservation. The City would have to establish a similar table to use if this option. Staff estimates the time required to implement the per capita survey option from concept approval to complete data base is approximately 3 to 5 months depending on how the new system is coordinated with the billing cycles and on the level and timing of publicity. Analysis Some members of the community have voiced support for a per capita based program. It is perceived as more equitable than the percentage.reduction method because it considers the number of people in a household and can be adjusted when that number changes. It is easy to explain that the water target is based on a specific amount of water for each individual in a household. Implementation time will be greater as will staffing requirements. To establish individual allocations would require that a census be made to determine the number of people in each living unit in the City of San Luis Obispo. The accuracy of such a census may be subject to question, especially when people feel they may be further rationed in the future. Due to many changes in occupancy during the year, it would be a continuing problem to update census information. Other agencies found that many customers misunderstood the intent of the census. Otrtion 2 - Household Based In the household based per capita method, each• residential account would be given a per capita allocation for a family of two, If the customer has more than two individuals residing within the household, an adjustment would be granted upon independent verification. A census would not be required, as all residential accounts would initially have the same allocation. Water customers requiring an increase in allocation would be responsible for returning a completed water allocation adjustment form with the proper documentation verifying the request for a water allocation adjustment. This documentation could consist of (but would not be limited to) rental agreements, billing records, tax returns, escrow summary etc. The estimated costs and manpower requirements for implementation of this option are about the same as the implementation of the 20 percent mandatory water conservation program. Since most of the program is currently in place, the estimated time required for actual implementation would be 300 3r City of San Luis osispo - WRIZA COUNCIL AGENDA REPORT Water Conservation Methodology Page 6 to 90 days based on billing cycles and the level and timing of publicity. Analysis Staffing, guidelines and applications are presently in place so implementation would proceed relatively quickly. A request for a water allocation increase will be subject to the same set of criteria and requirements which are currently in place. There would probably be an increase in allocation i adjustment requests. There would be decreased program implementation costs as compared to the survey method.and increased ease of communication to the public are also expected. Those individuals who have only one person in the household will receive a slightly higher allocation. This inequity could be overcome by setting the initial allocation based on a single person household but it would then result in greater numbers of adjustments and increased processing time. Per Capita Amounts Regardless of which option is selected to determine the target allocation under the per capita method, a single per capita amount would be used. Staff determined a base residential per capita amount of 103 gallons/person/day (8.3 billing units) is the city's current level of consumption assuming no conservation. This amount would then be reduced by the conservation level established in the water operational plan action levels. Those values are presented in Table 11. Table I1 Per Capita Water Allotments i Action Level Per Capita Amount Gal/Per/Day Billing Units Base - 0°% conservation 103 8.3 I Minor - 5% Conservation 98 7.9 Moderate - 15% Conservation 88 7.1 Serious - 25% Conservation 77 6.2 Severe - 35% Conservation --67 5.4 Critical - 50% Conservation 52 4.2 i Multiplying these per capita amounts by the number of residences in a household would determine the water target allocation for that account. If the target allocation was exceeded then an excess surcharge of 100% would be added to that bill. .A 200% surcharge could be charge if the usage exceed either a historical usage amount or a fixed percentage of the per capita amount. Comparison of Per Capita and Percent Reduction Methods The following is a summary of the two proposed methods in terms of billing units for number of residents and how much water per person in gallons/person/day. Percent reduction method - This method with proposed modifications, has a lifeline of 10 billing units and a ceiling of 25 units. The City has set 13.5 units as the average for a family of 3. This includes a large base allocation for the house and then adds 2.0 billing units for each additional person in the household. t i �I�n��1Nip�lllllll���A�����► City of San 1LAiS OBISpO ONZO COUNCIL AGENDA REPORT FPage7 nservation Methodology Cent Reduction Method Billing Units Number of Residents Gallons/Person/Day 10 10 1 124.7 15 2 62.3 l7 3 62.3 4 53.0 19 5 47.4 i Per capitamethod - This method is based on equal amounts of water for each resident of a household. At 35% conservation that would equal 67 gallons/person/day or 5.4 units/person/billing cycle. billing I Billing Units Number of Residents Gallons/Person/Day 5.3 1 67 10.7 2 67 16.1 3 67 21.5 4 67 26.9 5 67 This comparison shows that for a typical family of 2 to 3 persons that the water allocation would be about 65 gallons/person/day under either Program. Under the percent reduction program a 1 household of 1 would receive a larger per capita allotment while a larger family would receive a smaller per capita allotment. PROHIBITIONS In addition to water use surcharges, specific acts or uses of water will continue to be prohibited. Existing code provisions forbid "gutter flooding" and other wasteful practices. Violations of these prohibitions are infractions punishable by fine imposed by the Municipal Court. The City's basic Policy is to let the consumer decide how best to use their water allotment with a minimum of j restrictions. That policy has worked well and it's continuance is supported by staff. If Council wished to add additional prohibitions, they might consider no washing of, cars limit filling or j swimming pools, restrict residential irrigation during daylight hours, and prohibit use of water for air conditioning. PROGRAM ENFORCEMENT i Additionally, the City has in place the drought patrol, whose function is to patrol the streets of the City, educate and enforce the existing codes which prohibits the wasteful use of water. Based on the current program, the estimated annual cost of continuing the mandatory program is $230,000. Staff recommends the drought patrol and customer service program be continued at the current staffing levels. IMPLEMENTATION SCHEDULE A change in the water conservation program can be made at any time. The actual date for beginning the program would depend on which program was selected. To implement a new program would first require that a change in the ordinance be approved. This would require about 45 days. To implement a modification to the percent reduction program would require 30 to 90 days. To � 7 I�� ��rH►iVillllll�lii��lll city of San tins OBISpo NNIZO COUNCIL AGENDA REPORT Water Conservation Methodology Page 8 implement a new per capita program would require 90 to 150 days. Some of this time could overlap with the ordinance revision. Another issue is coordinating the implementation of a revised program with the adoption of stricter water conservation levels. The City is currently at a 20% conservation level. It is estimated that we may reach the 35% level next fall or winter. Staff will be able to predict that better in April. The existing program may be adequate for the current level of conservation but not for greater levels of conservation. FINANCIAL IMPACTS i The financial impact of the 35% water conservation program will be significant. Currently, the City's rate structure is designed to fund a conservation effort of 25 percent. To meet all operational and financial obligations under a 35% conservation effort, a rate increase of approximately 50% would be required. The financial analysis presented here is an order of magnitude analysis and will require a more through analysis at such time a greater level of conservation is implemented. The supporting information for the required rate increase is provided in Attachments 3 and 4 summarized as follows: Attachment 3 - This schedule summarizes the water system's overall annual revenue needs based on I the 1989-91 Financial Plan and Mid-Year Budget Request. Included in these numbers is the i estimated annual cost of the mandatory conservation program and operation o1. the new wells. As reflected in this summary, the cost for operations and maintenance, pay-as-you-go capital projects, and debt service is $5.2 million over the next 12 months. Reducing this cost by non-water rate revenues ($555,500) results in net water rate requirements of $4.6 million. ; I Attachment 4 - This schedule shows the City's existing rate structure and the projected revenues assuming 35% conservation is accomplished. The schedule also shows the rate structure required to generate sufficient revenues to meet the water system's operating and capital needs as developed in Attachment 3. As seen in this schedule, the existing rate structure will only generate $3.1 million assuming 35% conservation. In order to generate the $4.6 million required to meet the system's financial needs, an increase of 50% is required. Sections of the local economy that will be impacted by this program include: 1. The building industry. 2. Landscape businesses. 3. Nursery businesses. 4. Restaurants, hotel/motels, laundries and other businesses. The unit cost of water would go up 50% under a 3.5% conservation level. However, the actual bill to each household meeting its target allocation would not increase by that much because of the conservation requirement of decreased water use. RECOMMENDATION Review the analysis of the mandatory water conservation methodologies and provide staff appropriate direction. iAttachments: 1. Summary of the Current and Proposed Conservation Program 2. Sample Survey Form 3. Water Revenue Requirements Summary 4. Summary of Water Rate Base Revenue Projections �_Z Water Conservation Methodology C Page 9 ATTACHMENT 1 MANDATORY WATER CON ERVATION METHODOLOGIES SUMMARY COMPARISON Current Program Alternative #1 Alternative #2 Conservation Goal 20% 35% 35% Type of Program. Percent Reduction Percent Reduction Per Capita Lifeline Allowance 21 units 10 units none Ceiling 40 units 25 units none Base Year 1987 1987 N/A Percentage Reductions or Winter Summer All Year Long All Year Long Per Capita Single Family 30% 10% 35% 67 gals/day Multi-family 15% 10% 30% 67 gals/day Commercial/Industrial 10% 10% 25% 25% Institutional 40% 10% 50% 50% Landscape 70% .50% 70% 70% Surcharge Exceeds target 100% 100% 100% 100% Exceeds 1987 200% 200% 200% 200% Water Conservation Yes Yes Yes Adjustment Board Required Rate Increase Adequate 50% 50% ATTACHMENT 2 WATER RATIONING CENSUS TO CHANGE YOUR WATER RATIONING CENSUS INFORMATION, PLEASE FILL OUT THIS FORM AND RETURN IT TO THE CITY OF SAN LUIS OBISPO WATER CONSERVATION OFFICE, 990 PALM STREET, SAN LIIIS OBISPO, CA 93401. . PLEASE NOTE THAT ADDRESSES FOR WHICH WE DO NOT HAVE A CENSUS FORM ON FILE WILL BE ASSIGNED THE LOWEST SINGLE RESIDENT RATION AMOUNT (// GALLONS PER DAY) . Name Mailing Address City Water Account Number* Service Address* +Information from your water bill. Number of full:titae occupants at the' above address :16 Check here if you wish to receive an allocation adjustment form. Increases in allocations may be granted only for medical or other extenuating circumstances. I declare under penalty of making a false statement that the information contained herewithin is complete and accurate. I agree to inform the city within ten days of any change in the above information. Signature Signed at (city/state) Printed Name Date Daytime Telephone Number ( ) Home Telephone Number ( ) PLEASE RETURN THIS FORM TO: City of San Luis Obispo Water Conservation Office 990 Palm Street San Luis Obispo, CA 93401 FOR ASSISTANCE, CALL (805) 549-7132. 3-f D ATTACHMENT 3 Y m L m L m Y m L m L O L V d m C O O O r O O O O O r O r 0 0 6 0 0 0 r O : ON O r p p o r O O O O pp I O r O O O O O O r O r O II O I� r P r c 0 0 0 0 0 r O r N I' m Ym A fL R� AA Or •O r O O 1/� N O 11'1 11 > P A 'M7 �t I� •O P �O N In �O 11 P L �O •O d •O N N N_ : 1fl •O 11 m M M 11 r Y 11 11 11 mL i i r r T > Y O m Laa = m Q m m f i C O L a cc m +m+ aC y d w m �U0 O y r i�mp •^ O pmWt 7 qC0� (0 m S C m S > a K d E C Y m N OI u LL u Y G m m L m yE I m = V C {T{�� Y Y COm N M w r>41 'a m b m u C •7 P m W Z O. 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