SR 07-11-2017 3K
Ci ty Council
Report
City Council Meeting : July 11, 2017
Agenda Item: 3.K
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To: Mayor and City Council
From: Susan Cline, Director , Public Works, Office of Sustainability & the
Environment
Subject: Agreement with Vendor for Water Neutrality Program
Recommended Action
Staff recommends that the City Council
1. Award RFP# 98A to DNV GL Energy Services USA, Inc., a California -based
company, to implement the water neutrality ordinance;
2. Authorize the City Manager to negotiate and execute an agreement with DNV GL
Energy Services USA, Inc. in an amount not to exceed $2,000,000 over a five -
year period with future year funding contingent on Council budget approval.
Executive Summary
Given the water supply challenges facing Southern California, the City of Santa Monica
has one of the region’s most ambitious urban water management efforts. The City has
adopted a goal of achieving water self -sufficiency by 2020, ending our long -standing
reliance on imported water for a portion of our supply. To reach this target, new
development will need to be far more water efficient than existing buildin gs and older
buildings and landscapes will need to be retrofitted to sustainably reduce water usage
demand.
On May 23, 2017, Council adopted an ordinance amending Municipal Code 7.16.050
t hat require s new development to offset water use on -site, or alte rnatively, pay the City
an in -lieu fee to fund retrofitting of plumbing fixtures off -site or the developer ret rofit
water -saving fixtures off -site at their own expense . Staff is recommending DNV GL
Energy Services USA, Inc. to implement the water neutralit y ordinance by providing the
following services: develop and maintain the online water demand calculator, pre -
screen retrofit sites, purchase and install water -saving devices, track and report on new
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development compliance and retrofits , and plan check and inspection services as
needed.
Background
On May 9, 2017, per Attachment A, to move closer toward the City’s goal of becom ing
water self -sufficient by 2020 , staff recommended that the City Council introduce for first
reading a water neutrality ordinance that required new developments and new or
enlarged poo l s, spas, water features, and ponds to stay within the same water use as
the existing property through the installation of water -efficient fixtures and systems on -
site. If compliance cannot be met, the applicant must offset the projected additional
water use elsewhere in the city. In addition, the City will provide a fee -based turn -key
retrofit program and/or the applicant can install retrofits at self -selected sites at their
own cost.
On May 23 , 2017, Council adopted the water neutrality ordinance with the intent to keep
the city’s total water demand from increasing as a result of new development
(Attachment B). The first reading included a nine -month implementation schedule and
the water demand mitiga tion ordinance to end February 28, 2018 and the water
neutrality ordinance to start on March 1, 2018. The second reading was changed to end
water demand mitigation on June 30, 2017 and start water neutrality on July 1, 2017.
Discussion
The Water Neutralit y ordinance requires new developments to cap water use to the
existing parcel’s use through the installation of water -efficient fixtures and systems
onsite and/or pay for water savings offsets somewhere else in the city if compliance
cannot be met. The imp lementation would be prov ided by City staff and a consultant.
City staff will support the implementation of this ordinance by providing contract
management, initial plan review, and tracking offset payments. The majority of this
staff’s time will be implem enting the water use allowance citations as part of the Stage 2
Water Supply Shortage, which includes systematically evaluating customer
exceedances each week, reviewing the customer’s past conservation efforts, issuing
the citations, performing and tracki ng water school participation, tracking payments,
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issuing waivers and/or refunds, and preparing cases for appeals. In order to respond to
on -going water shortage conditions and issue citations, it is necessary to provide
additional resources to fully imple ment the water neutrality ordinance. If the water
supply shortage was rescinded , City staff would take over the administrative tasks from
the vendor and continue to manage the vendor’s water -saving fixture direct installations.
To effectively implement th e water neutrality ordinance, the selected consultant would
be responsible for administration of the Program and installations of water -saving
fixtures.
Administrative tasks include , but are not limited to development of the plan check
process and tools i ncluding a new online water demand calculator, identifying retrofit
sites, pre -screening sites for retrofit eligibility, data management and program reporting
including prevailing wage . The consultant w ould also provide plan check and inspection
services i f needed.
Installation tasks include , but are not limited to the removal and recycling of less water -
efficient toilets, showerheads, faucet aerators, and urinals as well as the purchase and
installation of more water -efficient fixtures .
Fees charged to t he new development applicant are based on the cost proposal
provided by the selected vendor. These fees were included in the fee schedule adopted
by Council on June 27, 2017.
Consultant Selection
On December 16, 2016, the City issued a Request for Proposa ls (RFP) for the
implementation of the water neutrality ordinance . The RFP was posted on the City’s on -
line bidding site, and notices were advertised in the Santa Monica Daily Press in
accordance with City Charter and Municipal Code provisions. A total of 1,405 vendors
were notified and 52 vendors downloaded the RFP. Two firms responded, however,
both bids were incomplete and rejected .
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The RFP was re -issued on January 24, 2017 and posted on the City’s on -line bidding
site, and notices were advertised in t he Santa Monica Daily Press in accordance with
City Charter and Municipal Code provisions. A total of 1,406 vendors were notified and
40 vendors downloaded the RFP. Two firms responded:
DNV GL Energy Services USA, Inc.
Urban Fabric , Inc.
Responses to t he RFP were reviewed by a selection panel of staff from the Public
Works Department.
Evaluation was based on the following selection criteria: experience, references, work
plans/timelines, project team, cost, and presentation. Based on this criteria and criteria
in SMMC 2.24.073, staff recommends DNV GL Energy Services USA, Inc. as the best
qualified firm to provide program administration, because they provided the most cost -
effective proposal and have provided excellent program administration for water
c onservation rebates, the retrofit upon sale ordinance, and water waste enforcement for
the City from 2003 to 2010. DNV GL Energy Services USA, Inc. is currently under
contract with the City of Santa Monica to implement the Climate Action Plan and staff is
very satisfied with the firm’s services.
Financial Impact s and Budget Actions
The agreement to be awarded to DNV GL Energy Services USA, Inc. is for an amount
not to exceed $2,000,000 over five years . Funds of $2,000,000 are available in the FY
2017 -18 bu dget in the Public Works Department. The agreement will be charged to
account 0 14262.555060. Future year funding is contingent on Council budget approval.
Of the $2,000,000 to be expended, a total of $1,930,000 will be recouped.
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Prepared By: Kimberly O'C ain, Senior Sustainability Analyst
Approved
Forwarded to Council
Attachments:
A. May 9, 2017 Staff Report - Water Neutrality Ordinance First Reading
B. May 23, 2017 Staff Report - Water Neutrality Ordinance Second Reading and
Adoption
C. 2017 OAKS INITIATI VE FORM Signed
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City Council Meeting May 23 , 2017 Santa Monica, California
ORDINANCE NUMBER _________ (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE
SECTION 7.16.050 TO REQUIRE THAT NEW DEVELOPMENT
OFF -SET WATER USE ON -SITE OR OFF -SITE, OR, ALTERNATIVELY,
PAY THE CITY AN IN -LIEU FEE TO FUND RETROFITTING OF
PLUMBING FIXTURES OFF -SITE
WHEREAS, California has endured a severe multi -year drought that has
threatened the water supplies of communities and residents, devastated agricultural
production in many areas, and harmed fish, animals and their environmental habitats;
and
WHEREAS, the City responded to the drought by reducing water use by more than
20% between June 2015 and January 2017; and
WHEREAS, despite the winter precipitation in 2017, the City desires to continue
to adopt and adhere to permanent changes to use water more wisely and to prepare for
more frequent and persistent periods of limited water supply;
NOW, THEREF ORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Santa Monica Municipal Code Section 7.16.050 is hereby amended
to read as follows:
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7.16.050 Water Consumption Limits and In -lieu Fees for New Development.
A. This section shall sunset on June 30 , 201 7 , except as to those
applications for discretionary or ministerial approvals for new development deemed
complete and pending prior to July 1, 2017 .
No person shall be issued a building permit for any development project unless:
(a) The development will not affect or alter any plumbing fixture; or
(b) The development involves a single -family residence and is not a
substantial remodel as defined in the Zoning Code and will not increase by more than
fifty percent the square footage of the principal building; or
(c) The development involves a multi -family residence and is not a substantial
remodel as defined in the Zoning Code and will not increase the number of dwelling
units on the property; or
(d) The person pays in advance a fee to the City sufficient to mitigate the
estimated daily water consumption rate projected for the development, except that any
person requesting a building permit for any low and moderate income housing
development shall be required to pay a fee sufficient t o mitigate only the estimated net
increase in daily water consumption rate projected for the development. The City
Council shall by resolution establish or amend any fee permitted by this Section.
B. This section shall become effective on July 1, 2017 and shall only apply to
applications for discretionary or ministerial approvals for new development submitted or
deemed complete and pending on or after July 1, 2017 .
1 . Definitions.
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The following definitions shall apply for purposes of administering this
Section:
(a) 100% Affordable Housing Project . 100% Affordable Housing
Project is defined in Section 9.52.020.0050 of this Code.
(b) Baseline Water Demand . Baseline water demand means the
average water use over the previous five (5) years from the time the first
application is filed on or after July 1, 2017 for any required development approval
and/or building permit is submitted to the City. The most recent five -year average
of water use according to City records at the proposed development site will be
used; where no records exist, the five -year average water usage of water
customers in the same water customer class (single -family, multi -family, mixed -
use, commercial, industrial, landscap e, etc.) with the same meter size will be
used.
(c) Director . Director means the Director of the City's Public Works
Department or his or her designee.
(d) New Development . For purposes of implementing this Section,
new development means any of the following:
(i ) repair, alteration, modification, addition to, or rehabilitation of
an existing structure with any plumbing fixture(s), where a demolition will
occur in accordance with Section 9.25.030(A)(1)-(2) or any successor
thereto.
(ii ) a new structure with any interior plumbing fixture(s).
(iii ) a new or enlarged pool, spa, pond or water feature.
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(e) New Water Demand . New water demand means projected water
demand for a proposed new development less baseline water demand at the
proposed development site. Water deman d shall be determined at the time of the
City Building Official's acceptance of plan check submission.
(f) Projected Water Demand . The total amount of water (potable and
non -potable water supplies as defined by Chapter 6 of the California Plumbing
Code or any successors thereto) projected for the proposed project site,
including uses such as but not limited to drinking, cleaning, industrial and
landscaping.
2 . Water Off -Set Requirements.
(a) No person shall be issued a temporary certificate of occupancy or
ce rtificate of occupancy, whichever occurs first, for any new development unless:
(i) The new development offsets all increases in new water
demand, as follows:
(1) New water demand for new development that
constitutes a 100% Affordable Housing Project, including individual
units and common spaces that support those units, shall be offset
at a ratio of 0.5:1.
(2) New water demand for all other new development
shall be offset at a ratio of 1:1.
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(ii) The water offsets required by this Section shall be achi eved
with on -site water efficiency measures unless the Director determines that
such efficiency measures cannot b e reasonably achieved on -site. In the
event that the Director determines that such efficiency measures cannot
be reasonably achieved on -site, t he applicant for a building permit may
satisfy the off -set requirements by:
(1 ) payment of the in -lieu f ee set forth under subsection
6 , below; and/or
(2 ) performing or undertaking to perform the off -set
requirements at an off -site location within the Ci ty of Santa
Monica. Such work shall be performed at the applicant's sole risk
and cost. The criteria for equivalent performance of the off -set
requirements at an off -site location shall be approved in writing by
the Director prior to commencement of such work. All work
performed or undertaken to be performed by the applicant shall
be subject to all laws and regulations generally applicable to such
work.
(iii ) The owner or building permit applicant submits sufficient
documentation as determined by the Dire ctor to demonstrate that the
water offset requirements in this Section can be achieved.
3 . Verification of Water Off -Set Requirements.
No temporary certificate of occupancy or final certificate of occupancy,
whichever is issued first, shall be issued fo r the new development until -:
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(a) The on -site or off -site water offset provisions approved by
the Director have been installed and demonstrated to be operational;
and/or
(b) Alternatively, the owner or building permit applicant has paid
the in -lieu wate r off -set fee in accordance with Subsection 6 .
4 . Implementing Regulations.
The Director shall adopt written administrative regulations or guidelines
that are consistent with and that further the terms and requirements set forth
within this Section.
5 . Administrative Fee.
An administrative fee shall be assessed and paid to the City by the
building permit applicant at the time of issuance of the building permit. The
administrative fee shall be imposed to cover cost of administering and
implementing t he water off -set requirements of this Section, and shall be set
by City Council resolution.
6 . In -Lieu Water Off -Set Fee.
(a) The water off -set requirements in Subsection 2 may be satisfied by
payment of a one time in -lieu water offset fee, as provided by this Subsection.
The fee shall be paid by the owner or building permit applicant, as follows:
50% shall be paid at the time of issuance of the building permit and the
remaining 50% shall be paid at the time of the issuance of the temporary
certificate of occupancy or certificate of occupancy, whichever occurs first.
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(b) Funds collected by the in -lieu water off -set fee shall be deposited
into a dedicated fund used by the City to reduce new water demand citywide.
(c) Payment of the in -lieu water off -set fee shall constitute full
satisfaction of the water off -set requirements in Subsection B.
(d) The in -lieu water off -set fee shall be non -refundable.
(e) Payment of the in -lieu water off -set fee does not represent an
obligation of the City to reduce new water demand by any particular means.
(f) The in -lieu water off -set fee shall be set by City Council resolution.
7 . Hardship.
(a) The Director may exempt an owner or a building permit applicant
from the requirements of Subsection 2 , upon showing by the owner that the
requirements of Subsection 2 would cause undue hardship.
(b) For purposes herein, an “undue hardship” shall be found where
imposition of the water off -set requirements would deprive the owner of a
devel opment site of all economically beneficial use of that site or otherwise be
prohibited by applicable state or federal law.
(c) An undue hardship application shall include all information
necessary for the Director to make a finding of undue hardship, inclu ding but not
limited to documentation showing the factual support for the claimed undue
hardship.
(d) The Director may approve the undue hardship exemption
application, in whole or in part, with or without conditions.
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(e) Any exemption granted by the Di rector is effective immediately.
SECTION 2. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to that ext ent necessary to
effect the provisions of this Ordinance.
SECTION 3. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of competent jurisdiction, such decisi on shall not affect the validity of the remaining
portions of this Ordinance. The City Council hereby declares that it would have passed
this Ordinance and each and every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitut ional without regard to whether any portion of the ordinance
would be subsequently declared invalid or unconstitutional.
SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage
of this Ordinance. The City Clerk shall cause the same to be published once in the official
newspaper within 15 days after its adoption. This Ordinance shall become effective 30
days from its adoption.
APPROVED AS TO FORM:
_________________________
JOSEPH LAWRENCE
Interim City Attorney
CITY OF SANTA MONICA
OA KS INITIA TI VE NOTICE
NO TICE TO AP PL IC ANTS, BIDDERS, PROPO SE RS
AND OTHE RS SE EKI NG DI S CR ETI ON A RY PE RM IT S, CO NTRACTS,
OR OTHER BE NEFI TS FROM T HE CI TY O F SA NTA MONICA
S an ta M on ica ’s voters adopt ed a Ci t y C ha rt er amendment comm on ly k no wn as
t he Oaks Initiative. T he Oaks Initiative requires t he Ci ty to provi de this no ti ce and
info rm ati on about t he Initia ti ve ’s requirements. Y ou m ay ob tain a full copy of t he Initiative ’s
tex t fro m t he Ci ty Cl erk.
This info rm ati on is requir ed by Ci ty C ha rt er A rt ic le XXII —Tax pa y er Protec ti on. It
pr oh ibits a pub li c offic i al fr om receiving, a nd a pe rson or en tit y fr om confe rr ing, spec ifi ed
personal ben efits or cam pa ign adv an tages fr om a pers on or entity a ft er t he offic i al votes,
or otherwise tak es o ff ic i al acti on, to aw ard a “pub li c ben efit ” to that person or en tity. The
prohibiti on app li es within and ou ts i de of the geographical boundari es of S an ta M on ica.
Al l pe rsons or entiti es a pp lyi ng or receivi ng pub lic benef it s fr om t he Ci t y of Santa
M on ica shal l provi de t he nam es of tr us tees, directors, pa rt ners, and officers, and na mes
of pe rsons with more t han a 10% equity, pa rt ic i pa ti on or rev enue interest. An excepti on
exis ts f or pe rso ns servi ng in those capacities as vol un t ee rs, without com pens ation, for
organizations exempt fr om income taxes under Sec tion 501(c )(3), (4), or (6), of t he
Inter nal Rev enue Code. However, this excepti on does not apply if the org an izati on is a
po li tic al co mmittee or con tr ols po li tical c ommi tt ee s. Exampl es of a “pub li c benefit ” i nc lude
pub li c con tr acts to provi de goods or se rvices wo rt h mor e t han $2 5,000 or a land use
ap proval wo rt h more than $2 5,000 ov er a 12 -month pe ri od.
In order to f ac ili tate comp li ance with t he requirements of t he Oaks Initiativ e, t he Ci ty
comp il es and maintai ns certain info rm ation. That info rm ati on i nc ludes t he name of any
person or persons w ho is seeking a “p ub li c benefit.” If t he “pub li c benefit ” is soug ht by an
entity, rat her t han an i nd ivi dual pe rson, t he info rm ation i nc l udes t he nam e of every person
who is : (a) tr ustee, (b) director, (c) pa rt ner, (d) officer, or has (e) more than a ten percent
interest i n t he entity . Therefor e, i f y ou are seeking a “pub li c benefit ” cover ed by t he Oaks
Initiativ e, y ou must suppl y t hat info rm ati on on t he Oaks Initiative Di sc losure Fo rm . This
informati on must be updat ed and su pp li ed every 12 m on ths.
CITY OF SANTA MONICA
OA KS INITIA TI VE DI SCLOS URE FORM
In order t o f ac ili tate comp li ance with t he requirem en ts of t he Oak s Initiativ e, t he Ci ty
comp il es and maintai ns certain info rm ation. T hat info rm ati on i nc ludes t he name of any
person or persons w ho is seeking a “p ub li c benefit.” If t he “pub li c benefit ” is soug ht by
an entity, rat her t han an i nd ivi dual pe rson, t he info rm ation i nc lude s t he nam e of ever y
person who is: (a) tr ustee, (b) director, (c) pa rt ner, (d) offic er, or has (e) more than a t en
pe rcent interest i n t he entity.
P ub li c benefits i nc lude:
1.Perso nal services con tr ac ts in excess of $25 ,000 ov er any 12 -month period;
2.Sale of material, equipment or supp li es to t he Cit y in excess of $2 5,000 ov er a 12 -
m on th pe riod;
3.Purchase, sale or lease of real pr op e rt y to o r fr o m t he Ci ty in excess of $25 ,000
ov er a 12 - m on th pe rio d;
4.N on -competitive franchise awar ds with gross rev enue of $50,000 or more in any
12 -month period;
5.Land use variance, special use pe rm it , or other excepti on to an es t ab li shed land
use plan , w he re t he decisi on ha s a val ue in excess of $2 5,000;
6.T ax “ab atement, excepti on, or benefit ” of a val ue in excess of $5,000 in any 12 -
m on th pe riod; or
7.Paym ent of “c ash or sp ec i e” of a ne t val ue to t he r ec ipient of $1 0,000 in a ny 12 -
m on th pe riod.
Name(s) of pe rsons or ent ities receiving pub lic be ne fit:
Name(s) of trus t ee s, directors, part ne rs, an d off ic ers:
Name(s) of persons with more than a 10 % equi ty , pa rtici pa ti on , o r r ev enu e interest:
Prepared by: ____________________________Title: _____________
Signature: ______________________________________ Date: ________________
Email: ____________________________________ Phone: ____________________
FOR CITY USE ONLY:
Bid/PO/Contract # ____________________________ Permit # ___________________________
D NV GL Energy Services USA, Inc.
Rich Barnes and Xander van der Meijden, Directors
Wendy Tobiasson, President
Xander van der Meijden, Treasurer
Gary Ciavola, Secretary
There are no persons/individuals who own any share of DNV GL Energy Services USA Inc
Xander van der Meijden Treasurer
Xander.vanderMeijden @dnvgl.com 510-891-0446
6/29/20 17
REFERENCE:
Contract No. 10496
(CCS)