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HomeMy WebLinkAbout07 WATER CONSERVATION UPDATE - DECEMBER 2016Agenda 7 AGENDA REPORT Reviewed.- Item City Manager Finance Director N/A MEETING DATE: FEBRUARY 7, 2017 TO: JEFFREY C. PARKER, CITY MANAGER FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER SUBJECT: WATER CONSERVATION UPDATE — DECEMBER 2016 SUMMARY As a result of the drought, the City of Tustin is required to provide the State Water Resources Control Board with a monthly report regarding water consumption and restrictions. This report summarizes the information provided to the State for the month of December 2016 and provides the City Council and the public with general information on previous and upcoming actions taken by the City. RECOMMENDATION Staff recommends that the City Council receive and file this report. FISCAL IMPACT There is no fiscal impact associated with this item. CORRELATION TO THE STRATEGIC PLAN This item contributes to the fulfillment of the City's Strategic Plan Goal D: Strong Community and Regional Relationships. Specifically, by implementing Strategy 2, which is to work collaboratively with agencies within and outside of Tustin on issues of mutual interest and concern. DISCUSSION AND BACKGROUND Staff has provided the Water Board with production data for December 2016 and calculated a 25% savings in water production when compared to December 2013. The City's current cumulative savings is 25%. Below is the City of Tustin's required report for the month of December 2016, which was submitted to the State on January 17, 2017. State Report Questionnaire 1. Which Stage of your Water Shortage Contingency Plan have you invoked? Stage 2 2. Does this Stage include mandatory restrictions on outdoor irrigation? Yes 3. How many days per week is watering allowed for outdoor irrigation? 1 4. How many complaints of water waste or violation of conservation rules were received during the reporting month? 20 5. How many contacts (written or verbal) were made with customers for actual or alleged water waste or for a violation of water conservation rules? 35 Water Conservation Update — December 2016 February 7, 2017 Page 2 6. How many formal warning actions (e.g.: written notifications, warning letter, door 99 hangers) were issued for water waste or for a violation of conservation rules? 7. How many penalties (fines) were issued for water waste or for a violation of 12 conservation rules? 8. Optional enforcement actions: $1800 in fines 9. This year's total potable water production for the reporting month (including 622.8 AF agricultural supply). 10. Your 2013 water production for the same reporting month. 831 AF 11. The quantity of water delivered for all commercial, industrial, and institutional 74.7 AF users for the reporting month. 12. The quantity of water used exclusively for commercial agriculture (this water will o be subtracted from the total monthly potable water production for purposes of determining compliance with conservation requirements). 13. The quantity of water used exclusively for commercial agriculture during the same o month in 2013. 14. You may optionally report the total amount of water (e.g.: leakage) calculated for 24.9 AF this past month for which you do not receive revenue. 15. Enter your estimate of the percentage going to residential use only for this 88% reporting month's production (l00% assumed otherwise). 16. Please include any information the Board should be aware of when using this data. Cl I use is estimate 17. Total Population Served. 67,700 18. Enter your estimate of the residential gallons -per -capita -day (R-GPCD). 85 19. You may optionally report any recycled water beneficially used during the None reporting month. The three charts below have been included to provide a comprehensive overview of the conservation that has been achieved since June 2015 and the citation and penalty data for the same time period. Continued on next page... Water Conservation Update — December 2016 February 7, 2017 Page 3 City of Tustin Water Production 1400 1200 - ----- - - - 1uo7.1 3 1.9 894.7 93&B Soo______._ ............................... .....-._.......,..,._,._..... ..._._._..,,.. _—. _._.._ _.__—_ X2013 d ea4.x d 837.7 � 761.2 2014 y........_. 4 600 _.._._.__,-._...... _.. ._652.1.._. ___-..,..,._....._—__—_—.. . 61�a --20i5 60.3A 622.6 596 —2015 400 ]an Feb Mar Apr May lune July Aug Sept Oct Nov Dec 700 180 160 } 140 R d a 120 d too a a` n = SO oa 60 -___- 40 _ ,..,...._................ .... — ..._.. 20 �5 d, 1S y5 tis ZS tis 16 _�6 _l6 _�6 .�6 �0 16 �6 16 16 _16 �6 )Un' SuP.s4± Seo' Dc�� C1O�. 9�' Sad` Fe'0 Mar APt CAaY �,yn SVS pU4: SB4� Dc� Nod DeG Residential Water Use - Per Person Per Day +7013 f Target #Actual Water Conservation Update — December 2016 February 7, 2017 Page 4 Other Items During December, the City reduced water usage by 31% and Tustin Unified decreased water usage by 12% compared to December 2013. Since June 1, 2015, TUSD has conserved 41 % and the City has conserved 58%. 2. Code enforcement statistics for the months of October 2016, November 2016, and December 2016 have been provided as an attachment to this report. 3. The State Water Resources Control Board held a workshop on January 18, 2017 to solicit input on potential adjustments to the May 2016 emergency regulations, which water agencies are currently operating under and will expire on February 28, 2017. The Water Board was presented with a proposal for modifying the emergency conservation regulations (Attachment 2). Any actions taken by the Water Board to modify the regulations will be provided to the City Council and the community when adopted. 4. Attachment 3 is correspondence from the San Diego County Water Authority (SDCWA) raising concerns about the Metropolitan Water District of Southern California's (MET) spending, both in general terms and specifically the Turf Removal Rebate Program that was made available to residents and businesses in the MET service area. Also included is a response from (MET) and a letter from the Municipal Water District of Orange County (MWDOC) disputing the allegations made by SDCWA. 5. The City's website has a page dedicated to water conservation and information on the drought. The page provides the public with a brief statement regarding the upcoming weather forecast, a summary of the City's monthly conservation results, and information on the City's Water Management Plan. Staff reviews the content weekly and updates the information as appropriate. This webpage is located at.http://www.tustinca.oLg/depts/pw/water/drought.asp. Stack, P.E. Public Works/City Engineer Attachments: 1. Enforcement Statistics —October 2016, November 2016, and December 2016 2. State Water Resources Control Board — Staff Proposal for Modifying Emergency Conservation Regulations 3. Correspondence: San Diego County Water Authority, Metropolitan Water District of Southern California, and Municipal Water District of Orange County 5.1Cfly Council Items12017 Councd 11a sQM7-201AWaler Conservation Update - Oecembe 201 Gonserva§en update December 201G.docx ATTACHMENT 1 Enforcement Statistics O C O L y } VI N � rK <}' cj- O rJ q U O 3 r o - m N N� i�.,� N N O H #� . a N M rr1 V C? O p �o F� O m r -I O O a 0 d, p E � N m N d o aO r rI Ln .-� a o o F, ri � �. o o z N m c? t7 C1 m o m o 0 o a ca o C o ul 'r o d o 0 F r1 w e-3 ���„nru�r�o0o � o �t- a o co ca ra ca c� 0 o o cu 3�c>m +ocaoc�ca p H o 0 0 0 DCA d V_ �® H a LL0 W a o 0 0 o a10 oc W a C) ZF© H K7 N 0 0 0 O O 0- H N M V LL ILI ;U, N h H o o ' o000a,v o _._—— Z 0 U U U U LL U 0 O Ln M N O N M 1 01 I M d ATTACHMENT 2 State Water Resources Control Board — Staff Proposal for Modifying Emergency Conservation Regulations Staff Proposal for Modifying Emergency Conservation Regulation January 17, 2017 Background The State Water Board adopted revised Emergency Urban Water Conservation Regulations in May 2016. Those regulations became effective June 1, 2016 and expire February 28, 2017. In addition to consideration of revising or extending the emergency regulations, Executive Order 8-37-16 requires the Board to develop a proposal by January 2017 for achieving mandatory conservation reductions that build off of the previous 25% mandatory levels and incorporate lessons learned. Improving Water Supply Conditions Water supply conditions continue to improve based on precipitation and reservoir and snow pack storage compared to the last several years. However, we are only halfway through the traditionally wet period of the year. History shows that rains can stop suddenly and not return, Additionally, some parts of the state— specifically parts of the Central Valley and pockets along the lower Central Coast (near Santa Barbara) are still experiencing water supply shortfalls and five years of drought have left us with a significant water supply deficit, especially when it comes to our groundwater basins. Information on Drought Assessment Drought is a function of impacts, which may be local. There's no rulebook for when a drought is declared or rescinded. A report published by the Department of Water Resources in 2015 contains useful information about the tricky business of declaring drought. The report can be found at the following lin http://www.water,ca,gov/waterconditions/docs/a9237 CalSign_ficantDroughts v10 int.pdf, Staff -Proposed Extension of Emergency Regulation Staff proposes to continue the existing stress test approach and revisit it if updated conditions warrant. Water suppliers would be allowed to re -submit stress test data with up-to-date information if significant changes have occurred (new supplies, changing reservoir conditions, etc.). Staff also proposes to continue all other aspects of the existing emergency regulation, including: • Monthly reporting on water production and local enforcement action • Prohibited water uses (e.g., no irrigation during and for 48 hours after rain) • Ability to issue Informational and Conservation Orders Staff also proposes to add Water Board enforcement authority against municipalities that issue fines or citations for brown lawns in violation of statute. If conditions warrant, staff will return to the Board in May or June 2017 with an updated proposal. -_ ....... ..-—...._._..___ ._... - ---- 1IRage ATTACHMENT 3 Correspondence: San Diego County Water Authority, Metropolitan Water District of Southern California, and Municipal Water District of Orange County Scan Mega cairn Wavier Aulihor� 4677 Overland Avenue o Son Diego, California 92123-1233 (858) 522-6600 FAX (858) 522-6568 www.sdcwa.org January 11, 2017 MEMBER AGENCIES Sean Tran, Finance Director Otay Water District City of Tustin ccidsbad Municipal Water District 300 Centennial Way City of Del Mor Tustin, CA 92780 City of Escondido conservation savings will actually be repeated every year for the next 10 years (and there is no City of National City Dear Mr. Tran: City of Oceanside water supply programs in its history — all paid for by our water ratepayers. City of Poway What would you do if you found out your city spent $30,000 to conserve one acre-foot of water City of San Diego when the going rate was $594 per acre-foot? If your city buys water from the giant Follbrook Metropolitan Water District of Southern California, that's exactly what your city's water Public Utility District ratepayers were charged. (An acre-foot is about 326,000 gallons — enough water to meet the Helix Water District annual water needs of two families of four.) Lakeside Water District story.html ) reporting on the mismanagement, poor planning and inadequate oversight of the Ofivenhain Municipal W.I., District Last year, the Metropolitan Water District of Southern California hastily launched a turf Otay Water District removal rebate program that quickly spun out of control, in which the agency spent $239 Padre Dam million in water ratepayer money to conserve approximately 9,000 acre-feet of water. That Municipal Woier District works out to nearly $30,000 per acre-foot of water conserved by the program. Assuming those Camp Pendleton Marine Corps Base conservation savings will actually be repeated every year for the next 10 years (and there is no Rainbow assurance it will), that makes MWD's turf removal rebate program among the most expensive Municipal Ware, District water supply programs in its history — all paid for by our water ratepayers. Ramona Municipal Water Dislricl Rineon del Diablo It's no surprise to learn that MWD's reckless spending on turf removal received a scathing Municipal MunicipaWater District l review by the agency's own internal auditor (http://www.mwdfacts.com/wp- San SonDelguilo Water District Audit.pdf). Enclosed is the Los Angeles Times story Santo Fe Irrigation District (http://www.latimes.com/locaVlanow/la-me-water-turf-rebate-program-audit-20161209- South Boy Irrigation Districl story.html ) reporting on the mismanagement, poor planning and inadequate oversight of the Vallecitos W.I., Diitnd turf rebate program. Valley Center Municipal Water District vista Irrigation DTstrict The San Diego County Water Authority — one of MWD's largest member agencies whose Yuimc ratepayers contribute about 25 percent of MWD's total revenues — has consistently expressed Municipal Water District serious concerns about MWD's out -of -control spending practices. For many months, MWD OTHER did not even require participants in this turf rebate program to provide any receipts proving REPRESENTATIVE they actually spent the money tearing out their turf. Even now, after some safeguards were County of Son Diego finally implemented, receipts are only required if the applicant is seeking more than $100,000 in rebates. MWD management defends the turf rebate program by stating the obvious: it was wildly popular. If you stood on a street corner handing out $1,000 bills, that would be popular, too. But popularity does not make a program prudent, fiscally sustainable or good water conservation policy. A public agency providing a safe and reliable wafer supply to the San Diego region PRINTED ON RECYCLED PAPER January 11, 2017 Page 2 MWD's reckless spending has contributed to historic increases in water rates at MWD over the past decade. Since 2006, MWD's treated water rate has more than doubled, with rate increases of 7.6 percent, compounded annually. MWD's untreated water rate has risen nearly as fast, with rate increases of 6.7 percent, compounded annually. Table 1: MWD Water Rates, 2006-2016 � 1,000 $900 swo $700 5600 Q $.5100 :5400 $ 3C+0 52(10 $100 2006 2007 2008 2009 2010 )f]'-1 2312 2013 2014 2015 1616 Calendar Year --*--lier 1Treat=_d Rate Tier 1 Untreated Rate It's long past time to reign in the out -of -control Metropolitan Water District. If you're as concerned as we are with the turf removal program,, we encourage you to talk to your retail water district provider. Ask them to explain why their appointed representative on MWD's Board of Directors believes the turf removal program was a good investment of your water ratepayers' dollars and what they are doing to contain costs at MWD and control escalating water rates. You can also learn more about how MWD is spending your ratepayers' money by visiting www.MWDFacts.com. We encourage you to join us in calling for accountability and transparency at MWD. If you have any questions, please contact us at mmuir@sdcwa.org. Sincerely, qi'I��K� Mark Muir Chair, Board of Directors San Diego County Water Authority CounciImember, City of Encinitas Enclosure QC4�v 1-1� Jim Madaffer Vice Chair, Board of Directors San Diego County Water Authority; Former San Diego City Councilmember and Past President of the League of California Cities EO$ Angeles &me$ Massive $340 -million turf rebate grogram plagued by poor planning and oversight, audit finds f �A 0 Matt steve."s CaaAt]Let Reporter December 10, 2016 The Metropolitan Water District's massive $340 -million turf rebate program which helped thousands of Southern Californians rip out their lawns in favor of drought -tolerant landscaping — was plagued by poor planiung and oversight by the agency, a new audit found. The rebate program was a key element of California's drought response, and officials say it helped residents conserve water. But the audit found that the MWD did a "less than satisfactory" job administrating the program due to "inadequate planning, execution, and follow-up." As a result, MWD auditors concluded that the agency may have overpaid a contractor tasked with inspecting turf replacements, and that the contractor also may have failed to perform some critical inspections it was required to carry out. 1 r - s �A 0 Matt steve."s CaaAt]Let Reporter December 10, 2016 The Metropolitan Water District's massive $340 -million turf rebate program which helped thousands of Southern Californians rip out their lawns in favor of drought -tolerant landscaping — was plagued by poor planiung and oversight by the agency, a new audit found. The rebate program was a key element of California's drought response, and officials say it helped residents conserve water. But the audit found that the MWD did a "less than satisfactory" job administrating the program due to "inadequate planning, execution, and follow-up." As a result, MWD auditors concluded that the agency may have overpaid a contractor tasked with inspecting turf replacements, and that the contractor also may have failed to perform some critical inspections it was required to carry out. 1 The findings represent perhaps the most scrupulous examination of the popular but costly lawn removal program, which was designed to help urban Californians sharply reduce their outdoor water use during 1 z Residents began flocking to the program after MWD doubled the size of its rebate to $2 per square foot in 2014, and it grew exponentially after MWD poured an additional $350 million into the conservation program a year later. Some watchdogs have long feared that the size of the program would lead to waste — and possibly fraud -- without strong oversight. During the period that auditors reviewed, MWD received more than 85,000 applications to remove about 270 million square feet of turf. More than 46,000 of those applications were approved for a payout of $239 million. MWD spokesman Bob Muir estimated that the audit, which was performed at the direction of the agency's board, covered the period from May 2014 to July 2015. "It was extraordinary what [the program] was able to accomplish," he said. "We were more than satisfied with how the program was managed. We know that we can do better and we need to do better." Auditors agreed that the program successfully drove water conservation. But they also criticized MWD on a number of fronts. A review of turf removal applications processed through Nov. 30, 2015, showed that the contractor, EGTA, was paid for completing aerial measurement testing for 212 applications for projects of a certain size. But only 121 such applications were reported as having been measured, the report found. Five applications for turf removal of more than 50,000 square feet were not reported as having been inspected by EGIA at all, even though the firm was required under its contract to inspect all projects of that size. The auditors noted that the five applicants were collectively paid $4.4 million. The auditors cited two cases in which an applicant got paid to remove significantly more turf than the applicant did. Muir said he did not know if the examples cited by the auditors represented "actual fraud," though he acknowledged that they were "obviously something that needed to be corrected." The auditors also assailed MWD for failing to "provide detailed instructions" on how the contractor should have checked the applications. For example, auditors said MWD failed to provide step -by -Step instructions on how to measure parcels manually, check customer information and inspect applications that proposed removing more than 50,000 square feet of lawn. In a letter responding to the report, Deven Upadhyay, an MWD manager, said his team generally agreed with the findings. Upadhyay wrote that his team has "made changes to the ongoing administration of remaining turf -removal wait - list applications and will incorporate the recommendations into the design of any potential turf removal programs ... in the future." 2 ,a4�0% _WATFRa. THE METROPOLITAN WATER DISTRICT zv.; OF SOUTHERN CALIFORNIA - ERk r ;pit Office of the Board of Directors January 20, 2017 Mark Muir, Chairman Jinn Madaffer, Vice Chair San Diego County Water Authority 4677 Overland Avenue San Diego, California 92123 Dear Chair Muir and Vice Chair Madaffer: Metropolitan is in receipt of your recent letter sent to a number of cities and retail agencies throughout Metropolitan's service area criticizing Metropolitan's regional conservation program and recent effort focused on turf removal. As part of the Southern California water community, I assume you are aware of Metropolitan's and all Southern Californian water agencies' incredible track record on conservation and demand management over the past 25 years. We began making important conservation improvements in the 1990s with the Iargest toilet replacement program in the nation. This was followed with a shower head replacement program and development of rebate programs to incentivize the widespread adoption and retrofitting of water saving devices. Metropolitan also worked closely with trade associations, businesses, and federal agencies in developing industry criteria for water savings. Metropolitan further sponsored and supported state legislation spurring development of water saving performance criteria that lock in savings on new devices generating code -based water savings without financial subsidies. Recently, Metropolitan sponsored the landmark "20%x2020" legislation which passed in 2009 that is driving statewide demand reduction. This systematic and comprehensive approach to conservation has proven very successful generating a marked reduction in per capita household water use throughout Southern California. Thanks to this approach, Southern California has significantly reduced its reliance on imported water from 1990 while adding more than 5 million people to our service area. All of Southern California should rightfully be proud of these accomplishments. This past decade in California has been extremely dry with two Governor -declared water emergencies. The drought's darkest period was 2013-2015, which shattered a number of records for highest recorded temperatures, lowest snow pack, least precipitation and runoff, and smallest State Water Project allocation - amongst other dubious distinctions. Governor Jerry Brown took action declaring an emergency coupled with an executive order that called for a mandatory reduction in all retail water use by 25% and established a statewide goal of removing 50 million square feet of turf. Metropolitan's Board demonstrated leadership by responding to this challenge with bold and aggressive action. Over the two-year period of 2014-2016, Metropolitan's Board approved an unprecedented campaign of demand management actions that budgeted $450 million for public outreach, and rebates for water saving devices and turf removal. 700 N. Alameda Street, Los Angeles, California 90012 • Mailing Address: Box 54153, Los Angeles, California 90054-0153 • Telephone (213) 217-6000 Mr. Mark Muir Mr. rim Madaffer Page 2 January 20, 2017 And the public responded. Applications for turf removal rebates soared from 3,600 in a six month period in 2014 to almost 50,000 over the same period in 2015. Interest in device rebates likewise soared with requests for efficient toilets jumping from 14,000 to more than 659000 in the same time frame. ,Southern California built on its 25 -year track record of conservation and met the Governor's conservation goal. Metropolitan more than tripled the Governor's statewide goal for turf removal and removed more than 160 million square feet of turf throughout our service area. Responding to California's challenging drought, Metropolitan's historic investment in conservation will be remembered as the strategic moment when Southern California's landscape transformed from lawns. Governor Jerry Brown personally met with Metropolitan's Board to thank Metropolitan for its statewide leadership on conservation. Your letter attempts to twist this strategic and historic investment into "reckless" and "out of control" spending. Turf rebates generate water savings over the life of the program at approximately $600 per acre-foot, as has been reported to Metropolitan's Board. Yet, your letter only refers to a single year of savings to falsely come up with a $30,000 per acre-foot figure. You mischaracterize Metropolitan's internal auditor's report as "scathing" when it actually finds less than a 2% variance between square footage removed and square footage reported, better than industry averages for turf removal programs. Most hypocritically, you fail to mention that SDCWA's website throughout this period steered San Diegans to Metropolitan's turf removal rebate program and lauded the benefits of water smart landscaping. City of San Diego Councilmembers Alvarez and Cate wrote in support of Metropolitan's program, When Metropolitan's Board was making this investment, City of San Diego Mayor Raulconer was announcing the doubling of the City's own turf replacement budget. In all, San Diego County received approximately 23% of Metropolitan's rebates over this period. Numerous San Diego golf courses, homeowners associations, schools, and businesses, such as San Diego Gas & Electric, received turf removal rebates and expressed their support and appreciation. Despite the continued efforts of SDCWA to criticize virtually every action by Metropolitan, I am pleased that the overwhelming majority of the Metropolitan Board remains steadfast in support of a balanced approach to fund conservation, local resource development and reinvestment in our imported water supply systems. And I am very pleased that many San Diego area businesses and residents embraced our conservation effort and lowered their water use. We lead best when we lead by example. I want to thank the forward looking people in the San Diego area for recognizing the importance of conservation and taking action. I only hope that someday the SDCWA will also demonstrate a similar spirit of regional cooperation and leadership. Sincerely, /t, -d 0,41-, " Randy Record Chairman of the Board 700 N. Alameda Street, Los Angeles, California 90012 • Mailing Address: Box 54153, Los Angeles, California 90054-0153 • Telephone (213) 217-6000 Mr. Mark Muir Mr. Jim Madaffer Page 3 January 20, 2017 cc: Metropolitan Board of Directors Metropolitan Member Agency Managers San Diego County Water Authority Board of Directors 700 N, Alameda Street, Los Angeles, California 90012 • Mailing Address: Box 54153, Las Angeles, California 90054-0153 • Telephone (213) 217-6000 - ---- _ _ MUNICIPAL .44l i WATER --- DISTRICT OF ORANGE - - - COUNTY Street Address: 18700 Ward Street Fountain Valley, Califomia 92708 Mailing Address: P.O. Box 20895 Fountain Valley, CA 92728-0895 (714)963-3058 Fax: (714) 964-9389 www,mwdoc.com Wayne S. Osborne President Brett R. Barbre Vice President Larry D, Dick Director Joan C. Finnegan Director Megan Yoe Schneider Director Sat Tamaribuchi Director Jeffery M, Thomas Director Robert J. Hunter General Manager MEMBER AGENCIES City of Brea City of Buena Park East Orange County Water District EI Toro Wafer District Emerald Bay Service District City of Fountain Valley City of Garden Grove Golden State Water Co. City of Huntington Beach Irvine Ranch Water District Laguna Beach County Water District City of La Habra City of La Palma Mesa Water District Moulton Niguel Water District City of Newport Beach City of Orange Orange County Water District City of San Clemente City of San Juan Capistrano Santa Margarita Water District City of Seal Beach Serrano Water District South Coast Water District Trabuco Canyon Water District City of Tustin City of Westminster Yorba Linda Water District RECETVED JAN 3 0 2017 TUSTIN PUBLIC WORDS DEPT, January 24, 2017 Mr. Douglas Stack Director of Public Works/City Engineer City of Tustin 300 Centennial Way Tustin, CA 92780 Dear Mr. Stack: The San Diego County Water Authority (SDCWA) recently mailed a letter to many appointed and elected officials throughout the service area of the Metropolitan Water District of Southern California (MET). This letter alleges "out of control" spending by MET and uses MET's Turf Removal Rebate Program as the launching point of their argument. You may have received this letter and were either curious or confused by the allegations. [ am writing you to shed some light on the issues and "facts" of that letter. As you are probably aware, SDCWA and MET are in the appeal phase of an acrimonious rate lawsuit. As to SDCWA's launching point, they calculate the Cost of the water savings from the MET turf rebate program at $30,000 per acre foot. if we use the same methodology, the cost of water from the new desalination plant in San Diego County would be approximately $18,000 per acre foot, when the going rate was $594 per acre-foot. In both cases, the wrong methodology produces wrong (and misleading) answers. That being said, the capital investment and cost of water for both projects was large. What is important (and missing from the letter) are the reasons why MET would choose to make a $310 million investment in turf removal from 2014 through 2015. The turf removal program was a dramatic move to transform the market under extraordinary duress due to the Governor's Executive Order to cut urban water use by 25% during an unprecedented drought. The program was a major contributor to the remarkable reductions in water use in MET's service area and especially here in Orange County where water use was reduced by more than 25% countywide with more than 18 million square feet of turf removed, since December 2016. That was only possible through significant reduction in outdoor water use. The program was actively discussed by the MET Board of Directors in an open session including a number of committee meetings. The MET rebate program was exceptionally popular with the public. Many agencies contributed additional local funds to increase the dollar value of the rebates, including the City of San Diego who doubled their local MWDOC's Member Managers Page 2 January 24, 2017 rebate budget. Not the behavior one would expect if the spending was already "reckless" and "out -of -control". Furthermore, SDCWA's assertion that the turf removal program is a major driver of MET's rate increases is not correct. During the eleven year period they highlight, the turf rebate program represents only a very small percentage of MET's budget. It did not drive the rate increases. Those increases are mostly the result of regional water reliability project investments, projects to enhance water quality and increased costs to transport water from Northern California due to environmental restrictions. MET delivers 50% of the water for the welfare of 19 million people and fuels a $40 billion economy here in Southern California. These investments, like the $2 billion Diamond Valley Lake water storage project, provided the infrastructure to get us through the worst drought of our lifetimes with minimal disruption. MET has a strong track record ofthoughtful decision-making. It has resulted in a diverse water supply portfolio with long-term investments in storage programs, conservation, local resource development, and drought response to meet its service area demands. We are proud to say Orange County is a beneficiary of MET's stewardship and forward thinking. Enclosed is additional information from MET that provides additional background. As always, I am available at your convenience to discuss this issue or answer any questions pertaining to MET's programs or finances. Sincerely, Robert J. Hunter General Manager cc: MWDOC Board of Directors attachments MUNICIPAL WATER DISTRICT OF ORANGE COUNTY • To receive the rebate, residents, business owners and public agencies first submitted an application to Metropolitan. Once approved, the applicant removed the turf and then provided evidence to Metropolitan in order to receive the rebate. • Many local agencies provided additional financial incentives. • Metropolitan and its contractors conducted random inspections to determine compliance. • An internal audit independently measured 8 million square feet of turf removed through the program and found less than a 2 percent difference between the actual square footage removed and the square footage reported by and rebated to applicants • With the program now closed to new applications, Metropolitan is studying how much water the program is saving and how many more Southern Californians have replaced their lawns. Metropolitan's rebate program, combined with similar programs at our member agencies, was designed to help trigger a market transformation. That Southern Californians continue to remove their turf is a good sign that transformation is happening. Metropolitan is still studying the extent of this multiplier effect, beyond anecdotal evidence. One study by the Irvine Ranch Water District found that for every three participants who removed their front yard turf as part of that agency's rebate program, four additional people converted their yards to drought tolerant landscaping without financial incentives. "We're going to see the ripple effect of this transformation for generations to come." - Reven Upadhyay, MANAGER MWD'S WATER RESOURCE MANAGEMENT GROUP THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA Changing the landscape of Southern California: FY^i A conservation success story s°Gr4Aar,a Facing a statewide, record-breaking draught, the Metropolitan Water District of Southern California took a bold step: it funded the nation's largest turf removal and water conservation program. The goal was simple: get Southern Californians to use less water outdoors. Beyond slashing immediate water use by replacing thousands of water -thirsty lawns, the turf removal program has helped change the way Californians see their yards and open spaces. Where green grass was once the standard in every yard, beauty and value are now found in colorful drought -tolerant, California FriendlyTM landscaping. A water -wise invesMient Metropolitan received more than 85,000 applications for the program, and they came from diverse communities throughout the agency's service area. Approximately one-third of participants were from disadvantaged communities. program in the nation 15,292 12,575 10,762 4939 3384 3907 2863 3397 2647 2386 1893 1902 69 424 533 606 846 1149 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun ! I I I 2014 2015 Program closed July 9, 2015 THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA January 2017 �� +i►i ` t<. i�: AlOF / r �,- I, .,,•,�. •.ai �% �. `'I t i. .��; �` �. '_%. e'; lad , HISTORIC WEATHER CONDMONS 0lkW. -1-14•16r- • It"RUSS PLUNGES METROPOLITAN USES LESS WATER TODAY TO SERVE 19 MILLION PEOPLE THAN IT USED IN 1990 TO SERVE 14 MILLION PEOPLE. 01r201 T N E M E T R O P O L I T A N W A T E R D I S T R I C T 0 F S O U T H E R N C A L I F O R N I A $450 milion (For fiscal years 2414-2016) WATER CONSERVATION REBATE PROGRAM 70 million gallons/day 160,000 househo ds/year REACE 400,000 people CONSERVATION INVESTMENT $800 MILLION SINCE 1990 AND GROWING TOILED AND WASHER "ERA4ES About 3,9 mi ion RMV a �ffli SPRINKLER COMMERCIAL L-�az7.zLm FL, Eo, ,,7Ea DEVICES About 27 mi ion About 2 million