REPORT TO THE CITY COUNCIL FROM: BROCK D. BUCHE, PE, PLS, Director Department of Public Utilities BY: CHERYL BURNS, MPA, Senior Management Analyst Department of Public Utilities - Administration SUBJECT ..Title Actions related to updating water conservation measures and the City's Water Shortage Contingency Plan (Citywide): 1. Adopt a finding that the proposed updates to the City's water conservation measures are exempt from the California Environmental Quality Act (CEQA) pursuant to the common sense exemption in that it can be seen with certainty that there is no possibility the proposed changes will have a significant effect on the environment pursuant to Section 15061(b)(3) of the California Environmental Quality Act Guidelines; 2. BILL (for Introduction) - Amending Subsection (vv) of Section 6-501, Subsections (a) and (e) of Section 6-520, and Section 6-522 of the Fresno Municipal Code, relating to regulations for urban water conservation and water efficient landscape standards; 3. ***RESOLUTION - Amending the Water Shortage Contingency Plan (Subject to Mayor's Veto); 4. ***RESOLUTION - Adopting the 571st Amendment to the Master Fee Schedule Resolution No. 80-420 to update water rate penalties relating to conditions of service work in the Public Utilities Section (Subject to Mayor's Veto); 5. ***RESOLUTION - Authorizing the issuance of fines for violations of the Fresno Municipal Code's water conservation regulations based on water meter data and rescinding Resolution No. 2018-253 (Subject to Mayor's Veto). ..Body RECOMMENDATION Staff recommends the City Council: 1. Adopt a finding that the proposed updates to the City's water conservation measures are exempt from CEQA pursuant to the common sense exemption in that it can be seen with certainty that there is no possibility the proposed changes will have a significant effect on the environment pursuant to Section 15061(b)(3) of the CEQA Guidelines; 2. Adopt the Ordinance amending Subsection (vv) of Section 6-501, Subsections (a) and (e) of Section 6-520, and Section 6-522 of the Fresno Municipal Code (FMC), relating to regulations for urban water conservation and water efficient landscape standards; 3. Adopt the resolution amending the Water Shortage Contingency Plan (WSCP); 4. Adopt the 571st Amendment to the Master Fee Schedule (MFS) Resolution No. 80-420 to update water fines related to water use; and 5. Adopt the resolution authorizing the issuance of fines for violations of the Fresno Municipal Code's water conservation regulations based on water meter data and rescinding Resolution No. 2018-253. EXECUTIVE SUMMARY The Department of Public Utilities (DPU) has conducted a comprehensive review of the City's water regulations, enforcement methods, and the Water Conservation Program policies and procedures to identify changes that can be implemented to reduce water use during times of water shortage and drought. The changes include modifying the definition of "Excessive Water Use," reducing the monitoring period from one month to two weeks, adding situations to the short-term exemption list, enacting higher fines at higher WSCP stages, and authorizing the ability to use metered consumption data for water conservation enforcement. DPU is requesting the adoption of these proposed changes to provide clarification of water conservation restrictions, streamline processes, and allow water conservation staff to better enforce violations to improve the City's compliance with statewide water usage, regulations. and requirements. BACKGROUND In the Summer of 2018, DPU partnered with the University of Chicago (UC) to conduct a Pilot Program (Pilot) to study the impacts different factors had on water conservation practices. These included evaluating various thresholds of "excessive water use," varying levels of fines, and the effectiveness of visual enforcement versus the use of automated meter data for enforcement (automated enforcement). DPU considered the Pilot a success because the data collected provided valuable insight into the effectiveness of different water conservation methods. The customer calls received during the Pilot also provided DPU with a better understanding of customer concerns as different conservation methods are implemented. Following the conclusion of the Pilot, DPU utilized the data analysis provided by UC to formulate recommendations for improvements to the City's Water Conservation Program and regulations. On November 1, 2018, the Council adopted Resolution No. 2018-253 which states that until Council adoption of new water usage rules, the City shall not issue fines based upon water meter data for violations of FMC Chapter 6, Article 5, Water Regulations. The moratorium only applies to issuing excessive water use fines based on automated enforcement. Issuing fines based upon direct physical observation of water waste (visual enforcement) is still allowable under the moratorium. On April 11, 2019, the Council adopted Resolution No. 2017-07 amending the WSCP to set the Outdoor Water Use Schedule, and Resolution No. 2019-074 adopting the 549th Amendment to the MFS Resolution No. 80-420 to update penalties for incidents of water waste. On April 25, 2019, the Council approved Ordinance No. 2019-011 amending sections 6-501 and 6-520 of the FMC relating to regulations for urban water conservation and excessive water use and establishing an appeal process for customers objecting to fines imposed for incidents of water waste. Consistent with the direction in Section 4 of Ordinance No. 2019-011, DPU planned to return to Council in Spring 2020 to request that Council lift the moratorium on automated enforcement fines after gathering one year's worth of data under the new water conservation regulations. However, the COVID-19 pandemic hit in Spring 2020, disrupting the lives of all Fresnans and impacting the financial stability of customers, making it an inopportune time to return to Council to reinstate the use of automated enforcement and the associated fines. The State of California continues to experience climate shifts that bring more extreme weather, resulting in a massive swing of the driest three years on record into some of the wettest months in recent history. As such, DPU has conducted a comprehensive review of the City's water regulations, enforcement methods, and the Water Conservation Program policies and procedures to identify changes that can be implemented to reduce water use during times of water shortage and drought. DPU recommends the following changes to the City's water use regulations: Excessive Water Use Currently, the definition of "Excessive Water Use" allows for an adjustable water usage threshold based on WSCP Stages. Under the proposed revisions, the definition of "Excessive Water Use" will set the water usage threshold at 400 gallons per hour in all stages of the WSCP. This water usage threshold allows customers performing normal household tasks to avoid being flagged for excessive water use. Other water conservation restrictions will be enacted in the higher stages of the WSCP, which will be much more impactful for citywide water conservation than tightening restrictions that impact normal household tasks. Incident Monitoring Period The proposed Excessive Water Use definition also reduces the current one-month monitoring period to two-weeks. DPU is recommending reducing the monitoring period to identify excessive water sooner, which will improve compliance with water usage regulations. The current month-long monitoring period could allow customers to use water improperly for weeks without any notification or enforcement. Exemptions The following properties may submit an application for a one-year exemption to the Outdoor Water Use Schedule in effect at the time of application: 1. Properties with multiple addresses; and 2. School athletic fields and park facilities; and 3. Properties without street addresses. Additionally, properties may submit an application for a short-term exemption from the Outdoor Water Use Schedule for a specific period of time not to exceed one month. With the proposed additions to the FMC, the short-term exemption list will include the following: 1. Properties with new lawns not yet established. 2. Properties seeking a one-time use, such as solar panel cleaning. 3. Complete fill of a new or refurbished swimming pool. 4. Drain and complete fill of a swimming pool to complete structural repairs or comply with public health standards, as determined by the Fresno County Department of Public Health. 5. Properties seeking to use water for a bona fide use necessary for health or preservation of property. The proposed revisions also incorporate moratoriums on both short-term and annual exemptions in WSCP Stages 3, 4, and 5, with exceptions for preservation of school athletic fields, parks, bona fide use necessary for health or preservation of property, and pool fills that are required for health and safety hazards as determined by the Fresno County Department of Public Health. These changes are being made to reduce outdoor water use during the stages when overall water use must be reduced significantly. Automated Enforcement Revisions The City's WSCP, approved by Council on July 15, 2021, via Resolution No. 2021-197, relies on fines and penalties for the enforcement of water conservation regulations during water shortage conditions. Without the ability to issue fines utilizing the automated enforcement method, the City holds no effective mechanism to enforce compliance with water conservation regulations, thereby hindering the City's ability to reduce water usage amidst drought and water shortage conditions. DPU is requesting that Council approve a resolution to authorize the issuance of fines based upon water meter data for violations of FMC Chapter 6, Article 5, Water Regulations, and rescind Resolution No. 2018-253. DPU is also requesting that Council approve the fine structure presented in Table 1 for the relevant WSCP stage in place at the time of the violation. This fine structure is designed to be more impactful as the severity of water shortage conditions increases and the City must take stronger measures to enforce compliance with water conservation restrictions. Table 1 - Revised Fine Structure for Violation of Water Conservation Restrictions WSCP Stage 1 WSCP Stage 2 WSCP Stage 3 WSCP Stage 4 WSCP Stage 5 First Incident Notice of water waste issued Notice of water waste issued Notice of water waste issued Notice of water waste issued Notice of water waste issued Second Incident $25 $50 $75 $100 $125 Third Incident $50 $100 $150 $200 $250 Fourth Incident $100 $200 $300 $400 $500 Fifth or more Incident $100 $200 $300 $400 $500 Finally, the proposed FMC revisions streamline both the enforcement actions and the appeal process for incidents of water waste. Summary California has, and continues to, experience dramatic shifts in water availability, from multi-year extreme droughts to record-setting rainfalls. Hydrology is uncertain and the most efficient way to preserve the State's water supplies is for Californians to continue ongoing efforts to make conservation a way of life. The proposed FMC revisions and related actions that DPU is proposing will strengthen the City's ability to comply with statewide regulations and water conservation requirements in all conditions. DPU is requesting that Council adopt the proposed changes to provide clarification of water conservation restrictions, streamline processes, and allow Water Conservation staff to better enforce violations and improve the City's compliance with any and all statewide water usage restrictions. The City Attorney has reviewed the ordinance, resolutions, and all accompanying documents and has approved as to form. ENVIRONMENTAL FINDINGS CEQA Guidelines Section 15061(b)(3) states that a project is exempt from CEQA if it is "covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA." Staff worked with LSA Associates, Inc., (LSA) to perform an environmental assessment for the proposed action and determined it is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines under the common sense exemption that CEQA only applies to projects which have the potential for causing a significant effect on the environment. The proposed changes to the FMC, WSCP, and MFS would allow the City to modify the Excessive Water Use threshold, modify the fine structure for excessive water use, and consolidate and clarify enforcement procedures to conserve water. Through implementation of the proposed modifications, the City would be more effective and efficient with enforcement of water conservation activities, thereby increasing water conservation. Currently, the City's enforcement activities related to water conservation restrictions are ineffective, and the results of enforcement activities are insignificant. As a result, these actions would not result in a substantial or potentially substantial adverse change on the environment but would instead be beneficial for long-term water conservation. Therefore, it can be seen with certainty that there is no possibility that adoption of the proposed changes may have a significant effect on the environment and as a result, this action is exempt from CEQA pursuant to CEQA Guidelines Section 15061 (b)(3). A memo prepared by LSA is the first attachment. LOCAL PREFERENCE Local preference was not implemented because this action does not include a bid, an award of a construction contract, or approval of a services contract. FISCAL IMPACT There is no impact to the General Fund. All revenues from fines will be deposited and accounted for in the Water Enterprise Fund (4000-4001). Attachments: CEQA Exemption Memorandum Ordinance Resolution to Amend the Water Shortage Contingency Plan Resolution to Adopt the 571st Amendment to the Master Fee Schedule Resolution to Rescind Resolution No. 2018-253 Presentation