SR-502-001
EPWM:CP:GB:BJ:NS/WaterEfficiencyFund.final.doc
Council Meeting: January 13, 2004 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Modification of the Water Efficiency Revolving Loan Fund to the Water
Efficiency Competitive Grant Program
INTRODUCTION
This report recommends that the City Council modify the Water Efficiency Revolving
Loan Fund to become the Water Efficiency Competitive Grant Program, for purposes of
funding exterior water efficiency projects.
BACKGROUND
In fiscal years 1996/97 and 1998/99, the City established and funded the Water
Efficiency Revolving Loan program to pay for the installation of water saving devices for
residents and businesses. The Water and Wastewater Funds funded the program since
they would both benefit from the long-term reductions in water demand and wastewater
flows. The available balance in the Water and Wastewater Fund accounts is currently
$851,251.
The original goal of the loan program was to fund zero-interest loans to Santa Monica
water customers who wanted to replace water inefficient systems and devices, such as
toilets and irrigation systems, but lacked funds for the purchase and installation. It was
intended that the loan program would provide the initial capital to customers, who could
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then repay the loan within two to three years with the money saved on their water utility
bill from reduced water consumption. To date, ten projects have been funded.
DISCUSSION
Throughout the 1990s, the foundation of the City?s successful water conservation
program was the Bay Saver Retrofit Program, which substantially subsidized the
replacement of interior plumbing devices, such as toilets, faucet aerators and
showerheads. Based upon recent research, this program has reached its saturation
point for the residential sector. The commercial sector never widely embraced the
program. Informal surveys of the business community suggest that the program?s
limited success in the commercial sector is likely due to the low cost of water relative to
the overall cost of business operations. Water conservation technologies and activities
are consequently assigned a low priority for capital investment.
In 2002, the Environmental Programs Division (EPD) completed the Water Efficiency
Strategic Plan (Plan), which included an evaluation of the City?s past and present water
conservation programs. The Plan?s overall goal is to reinvigorate the City?s water
conservation program while maximizing the contribution of numerous federal, state and
Metropolitan Water District (MWD) rebate and grant programs.
The Plan found that exterior water use (residential and commercial) offers significant
water savings opportunities. These findings are consistent with the research of the
Metropolitan Water District and other water providers in Southern California. In this
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region, it is estimated that over 50% of urban water use is exterior. In Santa Monica, an
estimated 35-40% of water use is exterior. These proposed projects will contribute to
the City?s goal of 20% reduction in water use by 2010.
The facilitation of exterior water efficiency projects thru grant incentives will benefit the
community by providing on-going cost savings to local residents and businesses
through reduced water demand as well as reducing the amount of potable water the
City produces or purchases. Further, the community will benefit from the reduced urban
runoff impacts associated with landscape irrigation, which will contribute to a healthier
Santa Monica Bay and beaches. For these reasons, staff proposes to convert the
former loan program to a competitive grant program for exterior water efficiency
projects.
Program Description
The goal of the proposed program is to fund projects that produce the greatest and
most cost-effective long-term water savingsTwo principle objectives are to facilitate a
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shift away from traditional spray irrigation systems to more efficient technologies, and to
shift the traditional use of water-thirsty landscaping to native and other drought-tolerant
species. Staff will maintain a database of funded projects to track and evaluate their
impacts and contributions towards meeting the water-savings goal.
The proposed program would distribute one-time grants from the existing accounts in a
competitive process until the funds are exhausted. It is anticipated that the program
would consist of two funding cycles per year and a total program duration of from three
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to five years until existing funds are exhausted. Residential, commercial and public
properties would be eligible to compete for grant awards that would fund up to 50% of
the total cost for selected projects, including the design, demolition and construction and
installation phases. Funds would be disbursed on a reimbursement basis, contingent
upon the submittal of invoices for completed work and inspection by City staff.
Project proposals will be evaluated and ranked for funding approval by a review
committee comprised of representatives from Community and Cultural Services
Department and the Water Resources, Engineering and Architecture and Environmental
Programs Divisions of the Environmental and Public Works Management Department.
Any proposed project that requires approval and/or permitting from City departments will
be required to satisfy such requirements prior to grant funding approval.
Staff will complete development of detailed administrative processes and procedures to
support the program, including grant applicant eligibility criteria, required
documentation, funding priorities, project evaluation and ranking guidelines. Staff will
publicize the grant program through the City?s public outreach resources, such as the
City web site, Seascape, CityTV and utility bill inserts. The proposed program can be
incorporated into the duties of existing staff and existing budget authority. Contingent
upon City Council approval, staff anticipates that grant funds could begin to be
disbursed by July, 2004.
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BUDGET/FINANCIAL IMPACT
Funds for the program in the amount of $481,614 are available in Water Fund account
C25008299.589000 and in the amount of $369,637 in Wastewater Fund account
C31008299.589000.
RECOMMENDATION
This report recommends that the City Council approve the modification of the Water
Efficiency Revolving Loan Fund to the Water Efficiency Competitive Grant Program to
fund exterior water efficiency projects on private and public properties.
Prepared by: Craig Perkins, Director, Environmental and Public Works Management
Gil Borboa, Manager, Utilities Division
Brian Johnson, Manager, Environmental Programs Division
Neal Shapiro, Senior Administrative Analyst
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