SR-11-24-2015-4B
City Council
Report
City Council Regular Meeting: November 24, 2015
Agenda Item: 4.B
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To: Mayor and City Council
From: Dean Kubani, Sustainability Manager, Office of Sustainability and the
Environment
Subject: Proposal for Water Neutrality Ordinance
Recommended Action
Staff recommends that the City Council review and comment on options f or creation of a
water neutrality ordinance for new development, tenant improvement projects and major
remodels, and provide staff with direction on how to proceed.
Executive Summary
At a time when frequent drought conditions are widely predicted to be "the new normal,"
City Council has directed staff to look at replacing our current Water Demand Mitigation
(WDM) fee with a policy to require new development to completely offset the added
water demand above the baseline of previous water use on the site. Staff believes that
this can be achieved through implementation of a water neutrality ordinance requiring
developers to achieve this goal by installing water efficiency retrofits elsewhere in the
community; through a modification of the WDM fee; or a combination of both. While
many other cities are moving in this direction, there are no "off the shelf" models that
fully ensure that water efficiency measures eliminate the need for additional water
generated by new development. Santa Monica would be breakin g new ground; there
are practical advantages as well as disadvantages to the various options, including
paying for start-up costs for implementation, ranging from $25,000 to $340,000;
potential reductions between $235,000 and $300,000 in future Water Fund revenues
from WDM fees under the direct offset approach; and possible annual reductions in
Capital Facility Fee revenues of between $375,000 and $475,000 .
Background
On October 28, 2014 during City Council’s discussion of the Water Shortage Response
Plan and the Sustainable Water Master Plan, Council directed staff to look into the
feasibility of developing requirements to offset or eliminate new water demand related to
new development in Santa Monica and report back on what forms those requirements
might take. Council also asked staff to look into options for modifying the City’s existing
Water Demand Mitigation (WDM) Fee to further incentivize water conservation.
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Water Demand Mitigation Fee
On February 26, 1991, Council approved an ordinance authorizing the WDM Fee
(Ordinance Number 1571 (CCS), codified in SMMC Section 7.16.050). On March 19,
1991 Council adopted Resolution No. 8196 (CCS) setting the fee amount and specifying
that it would be used to retrofit water inefficient plumbing fixtures in the City. The intent
of the fee was to mitigate the increase in water use of new and substantial remodels in
single-family, multi-family and commercial projects during a water shortage. It is a one -
time fee charged to new development intended to mitigate the total daily water
consumption rate projected for the development. The total daily water demand for the
project is calculated using standard water demand factors which were developed by
City staff. The fee is set at $3.00 for each gallon of daily wat er demand which must be
mitigated. The fee amount and formula for calculating it has not been updated since the
fee was adopted.
Payment of the fee is triggered by the following:
Single-Family Residence -- for construction of a new residence or wheneve r
adding 50% or greater to the square footage.
Multi-Family -- for construction of a new building or whenever new units are
added.
Non-Residential -- for construction of a new building or whenever there is a
change of use, changing or adding plumbing fixtu res, or adding restaurant seats
or square footage.
The WDM fee generates approximately $300,000 in revenue annually which is used to
fund a variety of water efficiency upgrades to public infrastructure throughout the city,
including installations of water-efficient plumbing, landscaping, rainwater and
stormwater capture and reuse equipment, and indoor plumbing fixtures.
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Similar Actions by Other Cities
A number of cities and utility districts, primarily in the most drought impacted areas of
California, have adopted policies designed to offset water use related to new
development. These include the cities of Lompoc, Morro Bay, Napa, and St. Helena;
San Luis Obispo County; and water districts in Cambria, Monterey and Soquel Creek.
In general these policies either require a developer to directly offset the new water
demand of their development project through the installation of water efficiency retrofits
elsewhere in the community, or pay an in -lieu fee (similar to Santa Monica’s WDM fee)
which is used by the city, county or water agency to fund water efficiency offsets.
Discussion
Staff from the Office of Sustainability and the Environment (OSE) have reviewed similar
ordinances and regulations adopted by other cities, interviewed staff in the cities of
Napa, CA and Morro Bay, CA about implementation and effectiveness of their
ordinances, and worked with staff from Planning and Community Development, the City
Attorney’s Office, Public Works, and the City Manager’s Office to develop the options
presented in this report. The City’s Task Force on the Environment and Water Advisory
Committee have also provided input on the proposals. The Task Force on the
Environment adopted the following motion at their October 19, 2015 meeting regarding
water neutrality:
The Task Force on the Environment recommends that City Council develop and
approve a W ater Neutrality Ordinance that requires all new projects and major
remodel projects must offset any water demand that exceeds the current water
use on the project property.
(Note: this motion replaces a similar motion adopted by the Task Force on February 23,
2015 regarding water neutrality)
Options for Achieving Water Neutrality
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As noted above, the two primary mechanisms currently in use to promote water
neutrality for new development are either 1) requirements for developers to directly
offset the calculated new water demand prior to construction of the new development
through the replacement of inefficient water fixtures or irrigation systems on existing
properties in other parts of the jurisdiction with more water efficient fixtures or systems,
or 2) requirements that in-lieu fees be paid to a jurisdiction to complete water offsets.
Both of these approaches have positives and negatives and require costs to effectively
administer in order to achieve water neutrality. These are discussed below.
Direct Offset Approach
Following review of similar water neutrality regulations and discussion with staff in other
jurisdictions it was clear that the most effective way to ensu re that all water demand
related to new development is completely offset is to institute the direct offset
requirement. Below is a description of how this approach could be implemented in
Santa Monica.
Applicability: For all projects that require development review permits,
development agreements and all projects over a certain size (e.g. 7500 square
feet) that require a change-of-use permit (such as tenant improvement projects),
any increase in water demand on the project site would have to be offset. I n
other words, credit would be given for the existing water use baseline on the site,
but any additional water demand would need to be offset on a 1:1 basis. This
ratio could also be adjusted to require a greater than 1:1 offset in order to
generate overall water demand reductions in the event that prolonged drought
conditions necessitate a higher offset. Projects in the Paso Robles and Los
Osos Water Basins in San Luis Obispo County and within the Soquel Creek
Water District are currently required to achieve a 2:1 offset ratio. It is important
to note that these areas are currently impacted by either restricted water sources,
salt water intrusion, or intensive agricultural uses that are not experienced to the
same extent in Santa Monica.
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Calculate Net New Water Demand: The amount of water demand to be offset
would be determined during the plan check process either by requiring a
developer to submit information regarding the type and number of water fixtures
(toilets, sinks, showers, cooling towers, irrigation systems, etc.) in the new
development, or by applying a standardized water use calculation based upon
the size and use of the building. In both cases, City staff would be required to
review the plan submittals and calculate the projected usage from the
development. The projected water demand minus the existing water use at the
site (determined by taking the average of water use at the site over the previous
three years), or, alternatively, an imputed reasonable allocation based upon the
existing zoning allowed for development permitted by right, is the amount that the
developer would be required to offset. The developer would have an incentive to
design the project to be as water efficient as possible in order to reduce the offset
requirement.
Offsets: Eligible offsets would need to be identified in other locations in Santa
Monica where water use could permanently be reduced, and then developers
would be responsible for implementing those offsets and demonstrating to the
City that they have been completed prior to receiving a Certificate of Occupancy.
Offsets could include retrofitting toilets in existing buildings, replacing lawns and
other high water use landscaping, or upgrading irrigation systems or other
infrastructure. Because Santa Monica has a significant amount of older multi-
family apartment buildings it is believed that replacing 1.6 gallon per flush toilets
with more efficient toilets (1.28 gpf or less), along with efficient faucet fixtures and
showerheads, in existing buildings could provide offset opportunities for several
years based on the anticipated near term levels of new development and
remodels. An offset program could be managed and administered by City staff,
by an outside vendor contracted by the City or, as is the case in Morro Bay, CA,
a developer could be directly required to identify the offset opportunities,
complete the retrofits, and demonstrate to the City that the offsets have been
completed. Each of these alternatives, and their associated costs and trade -offs
are discussed in more detail below.
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Estimated Volume of Projects
There are presently 32 projects (26 development agreements and 6 development
review permits) that are pending review that could be subject to a water neutrality
ordinance requiring direct offsets as described above. Table 1 presents the estimated
potential water demand of the pending projects, as analyzed in the 2010 LUCE Final
EIR. The total estimated water demand of pending projects equals 695,463 gallons per
day, which equates to annual water use of 780 acre-feet per year. The current citywide
water demand is approximately 14,000 acre -feet per year so the projected new demand
would equate to an increase of about 5.5% beyond current demand. It should be noted
that this projected demand does not take into account recently adopted water efficiency
standards which would likely result in a smaller increase in water demand than was
projected in the LUCE EIR.
It should also be noted that for development agreement projects, negotiations have
typically included performance standards for water efficient fixtures and a minimum
percentage below CalGreen baseline for interior and exterior water use, resulting in
projects that would likely have lower demand than presented below.
Table 1: Pending Projects Estimated Water Demand
Use Residential Retail Office Hotel Cultural Hospital
Amount 1,802 units 402,988 sf 106,800 sf 921 rooms 13,700 sf 799,000 sf
Estimated Water
Demand Factors* 124 gpd/unit 0.15 gpd/sf 0.10 gpd/sf 130 gpd/room 0.11 gpd/sf 0.35 gpd/sf
Estimated Water
Demand (gpd) 223,448 60,448 10,680 119,730 1,507 279,650
*From 2010 LUCE Final EIR
Sample Offset Calculation and Cost for Compliance
In order to determine a rough estimate of the potential cost to developers to fully offset
their water demand, staff evaluated a small sample of newly built mixed-use and multi-
family properties to determine their actual water usage. These water use figures were
compared to the previous water use at each site to determine the amount that would be
required to be offset in order to achieve water neutrality for that property. The cost of
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the offset was determined by calculating the average water savings for the replacement
of an existing toilet with a more water efficient model and then dividing the amount of
water to be offset by the amount of savings per toilet to determine the number of toilets
that would need to be replaced in order to meet the offset requirement. Toilet
replacement was used for this estimate because it is the most cost effective way to
reduce water usage and would likely be the method chosen by most developers to
offset new water demand.
The buildings evaluated for this estimate had between 36 and 122 individual residential
units. The annual water use in the buildings sampled averaged about t wo million gallons
per year with the per unit water usage averaging about 32,500 gallons per year.
Based on a current contract with a plumbing company to install high -efficiency toilets,
the cost to replace an existing residential type toilet is approxim ately $350. There would
also be a cost for administration which would be determined based on the projected
number of new projects, plan review, verification, certification, and database
management. The administration cost could add approximately 25% to 30% to the total
cost of the retrofit project. The full costs for retrofitting and administering this type of
program would need to be determined through a fee study.
For the example below staff chose an existing office building which was replaced with a
Tier 2 mixed-use property with 40 residential units. This represents a typical project
constructed in the downtown area in the past several years. It is important to note that
the potential water offset requirement for any project is highly variable depen ding on the
previous water usage on the property.
Sample Offset Calculation and Cost - Mixed Use Building with 40 Residential Units
Previous
Water Use at
Site
(Gallons Per
Proposed
Water Use of
New
Development
Water Use in
Gallons to be
Offset Per
Year
Number of
Toilets to be
Retrofitted
Cost to
Retrofit
Toilet
(doesn’t
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Year) (Gallons Per
Year)
include
admin fee)
34,229 1,300,000 1,265,771 1,084 $379,400
Proposed New Development: 40 residential units
Average Water Use per Unit: 32,500 gallons/year
Proposed Annual Water Use (entire project): 32,500 x 40 units = 1,300,000 gallons/year
New Water Demand to be Offset: 1,300,000 (new development demand) - 34,229
(existing water use at site) = 1,265,771 gallons/year
Average Water Savings for each 1.6 gallon per flush (gpf) toilet replaced with a 1.28 gpf
toilet: 3.2 gallons per day x 365 days = 1,168 gallons
Number of Toilet Replacements Required:
1,265,771/1,168 = 1,084 Toilets
Estimated Cost:
1,084 toilets x $350 (cost to retrofit a residential style tank toilet) = $379,400 to offset
1,265,771 gallons per year
Based on the above example (and other estimates calculated but not shown here) and
factoring in estimated administrative fees, it is anticipated that the cost to a developer to
offset 1000 gallons per year of new water demand would be approximately $350 - $500
if the retrofit were accomplished through the replacement of toilets. As noted above,
there are many variables that have been used to arrive at this rough estimate and it is
only provided to help with discussion.
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Implementation and Costs for Direct Offset Options
1. City Administered Program – This option would be entirely administered by the
City of Santa Monica’s Office of Sustainability and the Environment . Staff would
identify existing properties throughout the city whose owners are interested and
willing to have their plumbing fixtures upgraded with more efficient fixtures to
offset the additional estimated water use of applicable new development or
improvement commercial projects; approve applicable project offset
requirements; hire and assign plumbers to install the devices; and track the
installations and water offsets. The developer/applicant would pay the City
directly for all expenses related to the offset process. This option wou ld require
the hiring of one full time staff person. Ongoing annual costs (including staff
salary costs) would be approximately $150,000. In addition, first year program
start-up costs would be approximately $115,000 for a new staff work station and
office equipment, computer software upgrades, and miscellaneous expenses.
Alternately, if this option were completed using existing staff , the start-up and
ongoing staffing costs would be avoided, however, OSE’s ability to provide water
consultations to residents and businesses and effective enforcement of water
efficiency regulations would be reduced. This would negatively impact OSE’s
drought response efforts and would make it more difficult to achieve the City’s
water conservation goals. A City administered program would allow for accurate
tracking and verification of achievement of water neutrality goals but is also the
most staff intensive and costly.
2. Applicant Administered Program – For this program, the City’s involvement would
be minimal. The developer/applicant would be required to identify offset options
in the community, negotiate with the property owner where the offsets would be
obtained, complete installation of the offset equipment using their own installer,
and pay all costs. OSE staff would oversee the verification process with costs for
verification able to be recovered through the collection of a permitting and
processing fee paid by the developer/applicant. This option would not likely
require the hiring of additional staff however if the volume of offset applications is
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significant this would impact the ability of existing staff to complete other job
responsibilities, including water consultations to residents and businesses and
effective enforcement of water efficiency regulations, in a timely manner. One-
time costs would likely be approximately $25,000 for computer software
upgrades and ongoing costs for computer maintenance would be approximately
$5000 per year. This option would shift the burden for compliance to the
developer, and could become onerous for small development projects to
complete.
3. Vendor Administered Program – this option would be similar to option 1 except
that the City would hire a vendor to administer all aspects of the program. Staff
estimates that the annual cost to complete this scope of work would be
approximately $150,000 for an outside vendor, with an additional $25,000 for first
year start-up costs.
Options 1 and 3 above would provide the best quality control and tracking of water
offsets but would require significant start-up costs to administer. It is anticipated that
costs could be recovered through permitting and processing fees, however funds would
need to be identified in order to initiate the program. In addition, all options would likely
result in a net loss to the City due to a decrease in Water Fund revenues.
Implementation of a water neutrality requirement for new development could also result
in the reduction in development-related revenues that currently accrue to the Water
Fund. New developments are currently required to pay connection fees and capital
facility fees to the City in order to connect to the City’s water system. Accrual of these
fees based on anticipated future development in Santa Monica was factored into the
calculation of the City’s current water rates. Capital facility fees generate approximately
$375,000 to $475,000 per year in revenue depending upon the level of development
from year to year. The capital facility fees are charged to help offset increased capacity
requirements to the water infrastructure that the project will create. If a developer
offsets the water demand from a new project, it would be difficult to calculate and
charge a capital facility fee for that project. However, while the total water demand in
the City would be unaffected, the new development would still be increasing the water
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demand within its localized area, with a concurrent decrease in the area where the
offsets were installed. This localized increase in demand could require localized
infrastructure upgrades which would require a new source of funding. An alternative fee
mechanism to account for these anticipated costs would need to be developed in order
to adequately fund future infrastructure and capacity upgrades.
Timeline for Direct Offset Program Development and Launch
Staff estimates that a City- or vendor-administered direct offset program could be
established and ready for implementation within 11 months. The following steps would
be involved in the program development process:
• Select water-saving devices
• Establish water use savings for selected devices
• Establish ConserveTrack software update specifications
• Amend contract with ConserveTrack to perform software update and provide on-
going maintenance
• Create applicant checklist
• Research top water users
• Invite top water users to apply for the program
• Open up the program to the public
• Select plumbers through a competitive bid process and award contracts
• Develop checklist for plan submittal
• Complete fee analysis to allow for recovery of administrative costs
• Possibly modify the existing connection and capacity fee structure
• Establish plan check process
• Establish installation verification process
If Council directs staff to proceed with development of a Water Neutral ity Ordinance
requiring direct offsets, staff anticipates that a draft ordinance could be brought back to
Council for first reading by February 2016.
In-Lieu Fee Approach
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As noted above, the City’s current WDM fee is intended to offset water demand from
new development. It is a one -time fee charged to new development to mitigate the total
daily water consumption rate projected for the development, and applies to new
development and major remodels of single family, multi -family and non-residential
projects. The fee generates approximately $300,000 per year and is used to fund City
water efficiency infrastructure upgrades, including replacement of irrigation systems in
parks and public landscapes, rainwater catchment and reuse systems, and installation
of water efficient fixtures in public facilities. The fee amount was developed in 1991 and
is based on the estimated cost to offset a gallon of water demand at that time. For
single family and multi-family residential projects, the fee is based on estimated water
use for a typical project of each type. For non -residential projects the projected water
use is estimated based on the project square footage and building type.
Staff was not able to identify any jurisdiction that is effectively using an in -lieu fee option
to offset 100% of projected water demand from new development projects. The primary
reason for this is that these fees are often times generated by many small projects in
small amounts and, because jurisdictions typically use the fees to fund inf rastructure
projects which are often large and expensive, these improvements may happen months
or years after a development is completed. Staff was unable to find a jurisdiction that
carefully tracks water savings from projects funded by water demand miti gation or in-
lieu fees and links them back to the projects that generated the funds. This is not to
suggest that in-lieu fees are not effective at producing water savings, but rather that it is
difficult to directly track those water savings back to a specific development to
demonstrate that the new demand from that development was completely offset.
The WDM fee could be used on its own or in conjunction with a Direct Offset program to
address water neutrality in new developments and major redevelopments. If used on its
own the WDM fee would continue to apply to all development projects. If a Direct Offset
option is preferred by Council, for smaller projects that would not require development
review or change of use permits, such as single family residen tial and very small
commercial and multi-family projects, Council could require that those projects pay the
WDM fee to ensure that new water demand is indirectly offset for those projects as well.
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Alternately, Council could exempt these small projects from paying the fee. Because of
their small size these projects generate relatively little new water demand. Collectively
they currently generate approximately 22% of the WDM fee revenues however they
represent 76% of the projects that are subject to the fe e.
If Council directs staff to pursue either of these options, staff recommends that the
WDM Fee be reevaluated and updated to reflect current costs to offset water use and
more accurately reflect projected water demand from new projects. This process would
require a new nexus study, further fee analysis and Council action if the amount of the
fee were increased. A tracking procedure could also be established to provide better
correlation between the water savings achieved by the projects funded by the fee and
the increased water demand generated by the projects that paid the fee. The estimated
costs and trade-offs for these various approaches are discussed below.
Implementation and Costs for In-Lieu/WDM Fee Options
If Council wishes to continue using the WDM Fee, either as the sole means to address
and offset new water demand, or in conjunction with a Direct Offset program, staff
recommends that a fee analysis and nexus study be completed. This would cost
approximately $75,000 and take approximately six months to complete. In conjunction
with the adoption of a new fee, staff could develop a tracking system in-house at a
minimal cost. This would however increase staff workload to continually monitor and
regularly report on the offsets.
If the WDM Fee were used in conjunction with a Direct Offset program and restricted to
single family residential and small multi-family and commercial projects, the annual
revenues from WDM Fees would be reduced from approximately $300,000 to $65,000.
If Council decides to eliminate the WDM Fee moving forward this would result in a
$300,000 reduction in revenues to the Water Fund , eliminating this source of funding for
water efficiency upgrades to the City’s infrastructure.
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Summary of Water Neutrality Options
1. Continue with Water Demand Mitigation Fee Only For All Projects
Advantages:
The fee and the process to collect it is already established.
Fee currently generates approximately $300,000 per year which funds
water efficient City infrastructure upgrades.
Challenges:
No tracking system has been established to directly link water offsets to
particular development projects and ensure that 100% of new water
demand has been offset. Tracking system would need to be developed
if Council wanted to demonstrate that new water demand was
completely offset by upgrades funded by the WDM Fee.
New water demand would not likely be offset in advance of occupation of
new developments due to the way the WDM funds are expended.
Fee methodology and amount was developed in 1991 and requires
updating.
New nexus study and fee analysis should be completed if the fee is
continued to be used. Council action needed to adopt a new fee.
Estimated costs:
Approximately $75,000 to complete a Fee analysis/ Nexus study
Minimal costs to develop tracking system
2. Create Direct Offset Program and continue using WDM Fee for small projects
Advantages:
Direct offset program can ensure that new water demand is completely
offset prior to occupation of a new development.
Developers could complete Direct Offsets through the retrofit of older,
private multi-family housing, which would permanently reduce water use
and costs to those properties and their owners and occupants.
Retaining the WDM Fee option for single family homes and smaller
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developments and tenant improvement projects could help to ensure
that new water demand from smaller projects continues to be offset
while simplifying the offset requirement process for these smaller
projects.
Challenges:
Establishment and Implementation of a Direct Offset Program would
take approximately 11 months and require upgrades to existing
computer programs, development of a submittal and verification
process, and modification to the City’s existing plan check process.
Staff would need to develop an alternate fee calculation to ensure that
new developments contribute to the cost of upgrading and maintaining
local water infrastructure.
A tracking system would need to be developed if Council wanted to
demonstrate that new water demand from smaller developments not
subject to the Direct Offset requirement was completely offset by
upgrades funded by the WDM Fee.
New water demand from the smaller developments not subject to the
Direct Offset requirement would not likely be offset in advance of
occupation of new developments due to the way the WDM funds are
expended.
WDM Fee methodology and amount was developed in 1991 and
requires updating.
New nexus study and fee analysis should be completed if the fee is
continued to be used.
Estimated Costs:
Start-up costs would range from $25,000 to $115,000 and ongoing
annual costs for program implementation would range from $5,000 to
$150,000 depending upon the type of Direct Offset Program (City
Administered, Vendor Administered, or Developer Administered) the
Council prefers.
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Annual revenues from WDM Fees would be reduced from approximately
$300,000 to $65,000 with the shift to the Direct Offset requirement for
larger development projects. This funding reduction would directly
impact efficiency upgrades to the City’s water infrastructure.
Annual loss of $375,000 to $475,000 in Capital Facility Fee revenues
Approximately $75,000 to complete a Fee analysis/ Nexus study
Minimal costs to develop tracking system
3. Create Direct Offset Program and Eliminate WDM Fee
Advantages:
Direct offset program can ensure that new water demand is completely
offset prior to occupation of a new development.
Developers could complete Direct Offsets through the retrofit of older,
private multi-family housing, which would permanently reduce water use
and costs to those properties and their owners and occupants.
Elimination of WDM Fee would eliminate the need for updating the fee
methodology and completing a new nexus study. It would also
somewhat reduce the current staff workload involved in collecting and
tracking the WDM Fees on individual projects.
Challenges:
Establishment and Implementation of a Direct Offset Program would
take approximately 11 months and require upgrades to existing
computer programs, development of a submittal and verification
process, and modification to the City’s existing plan check process.
Staff would need to develop an alternate fee calculation to ensure that
new developments contribute to the cost of upgrading and maintaining
local water infrastructure
New water demand from smaller developments and single family
projects would not be offset if Council restricted the requirement to
developments above a certain size threshold.
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Smaller development projects and single family homeowners could find
compliance with this process to be onerous if the developer were
required to directly complete all of the program requirements (as
opposed to participating in a City or Vendor administered program)
Estimated Costs:
Start-up costs would range from $25,000 to $115,000 and ongoing costs
for program implementation would range from $5,000 to $150,000
depending upon the type of Direct Offset Program (City Administered,
Vendor Administered, or Developer Administered) the Council prefers.
Annual revenues from WDM Fees of $300,000 would be eliminated by
pursuing this option. This funding reduction would directly impact
efficiency upgrades to the City’s water infrastructure.
Annual loss of $375,000 to $475,000 in Capital Facility Fee revenues
Environmental Analysis
A Water Neutrality Ordinance as discussed above would be exempt from the provisions
of the California Environmental Quality Act (CEQ A) pursuant to CEQA Guidelines,
Section 15307 (Class 7). Section 15307 provides exemption for a class of projects
(Class 7) consisting of actions taken by regulatory agencies to assure the maintenance,
restoration, or enhancement of the natural resource where the regulatory process
involves procedures for the protection of the environment. A proposed ordinance would
provide for the maintenance and enhancement of the City’s water resources.
Therefore, the ordinance qualifies as a Class 7 exemption.
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a r esult of the
recommended action, however, depending upon on Council recommendations, costs for
development, implementation and enforcement of a proposed Water Neutrality
Ordinance could range from $25,000 to $340,000, with ongoing costs ranging from
$5,000 to $150,000 annually. Revenue to the Water Fund could be decreased by
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$235,000 to $300,000 if the WDM Fee were modified or eliminated and by $375,000 to
$475,000 if the water neutrality efforts resulted in the Capital Facility Fee being
eliminated. It is anticipated that administrative costs could be recovered through
permitting and processing fees, however funds would need to be identified in order to
initiate the program. In addition, all options would likely result in a net loss to the City
due to a decrease in Water Fund revenues. Budget requests and changes would be
included in a future report based on Council direction.
Prepared By: Jennifer Simmons,
Approved
Forwarded to Council