REPORT TO THE CITY COUNCIL October 22, 2015 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities SUBJECT ..Title Receive and accept report on City's compliance status for State-mandated water-use reductions and recommended temporary adjustments to the Water Conservation Program. ..Body RECOMMENDATION The Fresno City Council Receive and Accept the Administration's Compliance Status Report for state-mandated water use reductions and Recommended Temporary Adjustments to the City's Water Conservation Program to maintain compliance with the City's water-use reduction target of 28 percent by February 29, 2016. EXECUTIVE SUMMARY On April 1, 2015, the Governor of the State of California issued an unprecedented Executive Order, mandating a 25 percent reduction in statewide water use beginning June 1, 2015. As required by the Executive Order, on April 18, 2015, the State Water Resources Control Board ("Water Board") issued draft regulations and a water-use report segregating urban water suppliers into nine water reduction tiers based on self-reported residential per capita water consumption data. The City of Fresno reported a residential per capita water consumption of factor 150.7 gallons per person, per day, placing the City in Tier 7 with a mandate to reduce water use by 28 percent compared to 2013. On May 6, 2015, the Water Board approved Article 22.5 - Drought Emergency Water Conservation ("Emergency Regulations"), which includes mandatory water reduction measures for urban water suppliers, including the City of Fresno, effective through February 29, 2016. The Administration requests the Fresno City Council to receive and accept the Administration's compliance status report for state-mandated water use reductions and recommended temporary adjustments to the City's Water Conservation Program to maintain compliance with the City's water-use reduction target of 28 percent by February 29, 2016. BACKGROUND On April 1, 2015, the Governor of the State of California issued an unprecedented Executive Order mandating substantial water reductions across the State. The objectives of the Executive Order are to increase water conservation, increase enforcement to prevent wasteful water use, streamline the state's drought response and invest in new technologies that will make California more drought-resilient in the future. The Executive Order expresses concerns that the current drought could extend to a fifth year, and that the drought presents urgent challenges including: drinking water shortages in communities across the state, diminished water for agricultural production, degraded habitat for many fish and wildlife species, increased wildfire risk, and the threat of saltwater contamination to fresh water supplies in the Sacramento-San Joaquin Bay Delta. The Executive Order contains thirty-one items that require actions by the State Water Resources Control Board, the Department of Water Resources, the Department of Fish and Wildlife, the Office of Emergency Services, the Department of Community Housing and Development, the California Department of and Fire Protection, the California Energy Commission, agricultural water suppliers, and public water systems. Of the thirty-one items contained in the Governor's Executive Order, twelve items are directly applicable to the City of Fresno. As of September 30, 2015, the City of Fresno is in substantial compliance with all twelve items listed in the Governor's Executive Order of April 1, 2015. Executive Order Requirements for Water Use Reductions In Item No. 2 of the Governor's Executive Order, the Governor ordered the State Water Resources Control Board (SWRCB) to impose water use restrictions on urban water supply agencies in California to achieve a statewide 25 percent reduction in potable urban water use compared to the amount of water used in 2013. The period of record targeted for water use reductions was established as June 1, 2015 to February 29, 2016. The water use restrictions mandated by the Governor to achieve the 25 percent reduction in urban water use included a prohibition against the irrigation with potable water of ornamental turf in public street medians; a prohibition against irrigation with potable water outside newly constructed homes and buildings unless the water is delivered by drip or micro-spray system; and adoption of water efficient landscape ordinances by local governments. On April 28, 2015, the SWRCB issued a final version of the Emergency Drought Regulations for public comment, and on May 5, 2015, the Emergency Drought Regulations were adopted by the SWRCB. For the City of Fresno, the Emergency Drought Regulations required the City to reduce 2015-2016 water use, as compared to 2013, by 28 percent toward the overall State mandated goal of 25 percent. The City's water use target was set at 28 percent based on the City's per capita water use rate of 150.7 for the period July to September 2014. As stipulated in the Emergency Drought Regulation, "Each urban water supplier whose average July-September 2014 R-GPCD was 130 or more but less than 170 shall reduce its total potable water production by 28 percent for each month as compared to the amount used in the same month in 2013." City Of Fresno Water-Use Reduction Status The City's water conservation strategy to achieve compliance with the State-mandated water conservation measures has included: (a) enhanced public education using radio, television, and print media; (b) enhanced public education through utility bills (usage reports and comparisons to others, and Stage 3 water allocation notices); (c) enhanced public outreach to residents, businesses and institutions throughout the City to assist with adjusting irrigation timers and checking irrigation systems for leaks; (d) adoption of revisions to the Fresno Municipal Code for Water Waste (FMC 6-520); (e) enhanced review of hourly-water meter data to identify potential water waste and issue prompt notifications to residents, businesses, and industries; and (f) enhanced enforcement of water use restrictions when violations are recorded and documented. As of September 30, 2015, the City of Fresno's water use reductions have totaled 28 percent, which is in compliance with the State mandate for the City of Fresno. Recommended Temporary Water Conservation Program Adjustments While the City has achieved compliance with the State mandated 28 percent water use reductions through the first four months of the target period, the Administration believes it is now necessary to make adjustments to the City's water conservation program to ensure that the City remains on compliant with the 28 percent reduction for final five months of the water reduction target period (June 1, 2015 to February 29, 2016). The final five months are deemed to be a particular challenge because the City's residents, businesses, industries, and institutions typically use less water in winter months due to cooler temperatures and the availability of precipitation. However, irrespective of the Governor's Order, the City must save and preserve its existing water supply resources in the event this drought extends into a fifth year. It is critically important that the City's residents, businesses, industries, and institutions recognize that water saved from June 2015 to February 2016 is water that can be available next year in the event this historic drought continues, which will likely prompt the Governor to order additional water use reductions next year starting April 1, 2016. Based on current water supply conditions, and anticipating the drought will continue to some degree into a fifth year, the Administration recommends the following adjustments to the City's Water Conservation Program for the period November 1, 2015 to, February 29, 2016. 1) Effective November 1, 2015, the City will enforce one-day per week outdoor watering for all classes of customers. The historic transition to one-day per week watering has been December 1st of each year; however, given the severity of the drought and the uncertainty of when the drought will end the City will adopt and enforce one-day per week outdoor watering restrictions thirty days earlier. 2) The City will launch a public education campaign titled "Be a Zero Hero" to encourage voluntary zero-watering days during the winter months of November, December, January, and February. The promotion will focus on educating the community on the reduced need for outdoor watering during winter months when temperatures are cooler and some degree of precipitation will be available. 3) The Department of Public Utilities will implement a Water Conservation Recognition and Reward Program. This program will recognize and reward residents, businesses and industries that have achieved the greatest water use reductions during two evaluation periods: a) The first period will be January 1, 2015 to September 30, 2015, and b) The second period will be November 1, 2015 to February 29, 2016. The Department of Public Utilities will allocate $20,000 from the Water Conservation Program's $250,000 budget for the Water Conservation and Recognition and Reward Program. As of September 30, 2015, the year-to-date (June to September) expenditures in the Water Conservation Program have totaled $34,600, of which approximately 50 percent has been distributed for Turf Conversion Rebates (a new program for the City started May 1, 2015). The recognition and reward will be in the form of water-related expenditures for residents and businesses in the City including, but not limited to, purchase of water saving devices (toilets, washing machines, water fixtures, etc.); irrigation system upgrades; landscape consulting services; purchase of drought tolerant vegetation; and similar. All rewards will be granted in recognition of water saving efforts. Future Considerations: Stage 3 Water Conservations Measures If conditions warrant, and consistent with the City's Water Shortage Response Plan, the Administration may require adoption of Stage 3 water restrictions starting April 1, 2016. If Stage 3 water restrictions become necessary, it is anticipated that Stage 3 will be implemented in two phases. 1) Phase 1 will be to restrict outdoor watering to one-day per week on a year-around basis. 2) Phase 2 will implement Water Consumption Allocations (rationing) for the various customer classes in the City's water system. a) The Single-Family Residential Allocation and Multi-Family Residential Allocation would be based on 110 percent of average use during January and February. b) The Commercial/Institutional Allocation will be based on 85 percent of annual average water use. c) Industrial Allocations will be based on 85 percent of average annual water use. d) Irrigation Allocations will be based on 50 percent of annual average water use. If drought conditions persist through February 29, 2016, and Stage 3 water conservation measures become necessary, the Administration will also recommend increasing the penalties for non-compliance with adopted water restrictions from a fixed rate of $45 per incident to an inclining rate schedule of $50 for first violation, $100 for second violation, $150 for third violation, and $200 for all subsequent violations, with possible termination of service. ENVIRONMENTAL FINDINGS This is not a "project" for the purpose of CEQA pursuant to CEQA Guidelines � 15378. LOCAL PREFERENCE Local preference was not considered because this agenda item does not include a bid or award of a construction or services contract. FISCAL IMPACT There are no financial obligations for the General Fund associated with the recommended adjustments to the Water Conservation Program.