SR-502-006-01 (4)
EPWM:adm/staffrpt/07-08-03/XENERGYBaySaver03-05
Council Meeting: July, 8, 2003 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Extension of Contract #7997 (CCS) with KEMA-XENERGY for Services
Related to the Bay Saver Water Conservation Program for Fiscal Years
03-04 and 04-05
INTRODUCTION
This report recommends that the City Council authorize the City Manager to extend for
two years the contract with KEMA-XENERGY (formerly XENERGY), which provides
monthly administrative and inspection services for the City?s Bay Saver Water
Conservation Program. The cost of services is $115,000 per fiscal year.
BACKGROUND
Since 1989, the City of Santa Monica has implemented effective water conservation
programs. The Bay Saver Program provides incentives to residents and businesses to
install ultra low-flow (ULF) water efficiency devices through rebates or direct install.
The Bay Saver Water Conservation Program also includes the Retrofit Upon Sale
ordinance. This program is largely responsible for the City?s reduction in water and
wastewater, and contributes to the Resource Conservation goals of the Sustainable
City Plan.
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A portion of Bay Saver incentives are provided by MWD, with the remainder budgeted
from City funds. Residential ratepayers can avoid a monthly Bay Saver Fee ($4/billing
cycle for single-family dwellings and $2.60 per unit/billing for multi-family dwelling)
when they install water-saving devices.
To date, almost 47,000 ULFTs (toilets) have been installed in homes and businesses,
and the City has achieved a permanent reduction in water usage and wastewater
generation of 1.6 million gallons per day (MGD), representing a 13 percent reduction in
Santa Monica?s total daily water demand and an 18 percent reduction in average daily
wastewater flows. These figures exclude savings from the installation of low-flow
aerators and showerheads, which are more difficult to accurately quantify.
Based upon the Water Efficiency Strategic Plan 2002, City staff concluded that the Bay
Saver Residential Toilet Retrofit Incentive (Direct Install and Rebate) Program should
be terminated on June 30, 2003, because of the high saturation rate for this sector.
The short-term cost to maintain this aspect of the program exceeds the long-term water
savings benefit, and these fiscal resources can be directed to new water conservation
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programs that produce greater long-term water savings. As of July 1, the public will
have to pay the entire cost of installing residential ULFTs. The Retrofit Upon Sale
continues and additional water efficiency programs including rebates for residential
high efficiency washing machines have been added to the Bay Saver menu of
programs, again based on the 2002 Water Plan.
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DISCUSSION
The City has employed a contractor to assist in the program?s administration and
implementation since its inception. Following a 2001 program evaluation, staff
recommended that the City continue with this approach. An RFP was distributed and
bids reviewed. In the August 14, 2001, staff report approved by Council, a 2-year
contract was authorized with XENERGY to administer the Bay Saver Program through
June 30, 2003. The contractor provides customer service, data and financial
management, and inspection services.
The staff recommends the continuation with KEMA-XENERGY at this time for a number
of reasons: (1) an RFP was completed less than two years ago; (2) the initial contract
is less than 2 years old; (3) KEMA-XENERGY is doing an outstanding job in
maintaining the Bay Saver program and serving our clients; (4) switching contractors at
this stage would be disruptive to the administration of the program?s efficiency,
especially given the new water conservation programs that are being implemented,
which are derived from the 2002 Water Efficiency Strategic Plan, and the City?s
aggressive goal to reduce water consumption by 20% in less than 10 years; and (5)
establishing a new contractor would be time consuming and divert critical resources
away from the Strategic Plan.
The proposed contract for fiscal years 03-04 and 04-05 includes modifications in the
vendor?s scope of work to reflect the recent changes in the Bay Saver Program and
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based upon experiences and feedback to date from customers, KEMA-XENERGY and
City staff.
BUDGET/FISCAL IMPACT
The estimated monthly fee for KEMA-XENERGY services is $9,500. Funds in the
amount of $115,000 will be required in both FY03-04 and FY04-05. This contract is
contingent upon Council?s adoption of the necessary expenditure budgets in each fiscal
year. For FY03-04, funds are available at operating account 31662.544390, Water
Efficiency and Conservation.
RECOMMENDATIONS
This report recommends that the City Council authorize the City Manager to extend the
contract with KEMA-XENERGY, which provides monthly administrative and inspection
services for the City?s Bay Saver Water Conservation Program, for fiscal years 03-04
and 04-05.
Prepared by: Craig Perkins, Director, Environmental & Public Works Management
Brian Johnson, Manager, Environmental Programs Division
Neal Shapiro, Senior Environmental Analyst, Water Resources Section
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