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CC 2015-05-26_09a Declaring Stage 1 Water Shortage Emergency I NRROyO o �� INCORPORATED V V T * JULY 10, 1811 ,� cq�/ppRN�P MEMORANDUM TO: CITY COUNCIL FROM: BOB MCFALL, INTERIM CITY MANAGER BY: TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR GEOFF ENGLISH, PUBLIC WORKS DIRECTOR DEBBIE MALICOAT, ADMINISTRATIVE SERVICES DIRECTOR DAVID HIRSCH, ASSISTANT CITY ATTORNEY SHANE TAYLOR, UTILITIES SUPERVISOR KELLY HEFFERON, ASSOCIATE PLANNER RYAN CORNELL, ACCOUNTING MANAGER SUBJECT: CONSIDERATION OF ADOPTION OF A RESOLUTION DECLARING A STAGE 1 WATER SHORTAGE EMERGENCY AND ADOPTION OF AN URGENCY ORDINANCE TO AMEND AGMC SECTION 13.07.090 RELATING TO PENALTIES AND ENFORCEMENT OF EMERGENCY WATER SHORTAGE RESTRICTIONS AND REGULATIONS DATE: MAY 26, 2015 RECOMMENDATION: It is recommended the City Council conduct a Public Hearing and; 1. adopt a Resolution declaring a Stage 1 Water Shortage Emergency and implementing Emergency Water Shortage Restrictions and Regulations in accordance with California Water Code Section 350 and Arroyo Grande Municipal Code Section 13.07.030; 2. adopt an Urgency Ordinance amending Section 13.07.090 of the Arroyo Grande Municipal Code relating to Penalties and Enforcement for Violations of Emergency Water Shortage Restrictions and Regulations; and 3. approve the expansion of the City's Turf Removal Rebate program to include Commercial properties not currently served by an irrigation meter; and 4. appropriate $30,000 from the Water Fund for the hiring of temporary employees and other costs associated with implementation of the water use restrictions. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The exact costs of implementing Stage 1 Emergency Shortage Restrictions are dependent upon several variables, including the length of time that the City experiences a water shortage, but are estimated at $30,000 for programming necessary for the utility billing system to accommodate the proposed reduction targets and penalties, hiring of Item 9.a. - Page 1 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE I EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 2 of 13 part-time staff in Administrative Services for 12 months and other miscellaneous costs, if no changes are made to billing frequency. If the City Council opts to enact monthly utility billing, costs are estimated to be $125,000 annually, including the hiring of a full-time position in Administrative Services and the labor costs for Water personnel, plus additional one-time equipment and software programming of$30,000. BACKGROUND: This matter is being presented as a public hearing in accordance with Arroyo Grande Municipal Code Section 13.07.030 and Water Code Sections 351 and 352 in order to consider adoption of a resolution declaring a Stage 1 Water Shortage Emergency. An Urgency Ordinance to amend Section 13.07.090 of the Arroyo Grande Municipal Code relating to Penalties and Enforcement for Violations of Emergency Water Shortage Restrictions and Regulations is also being presented for consideration. The Urgency Ordinance clarifies that the penalties, including potential criminal prosecution and installation of flow restriction devices or disconnection of water service applies to both Stage 1 and Stage 2 Water Shortage Emergencies. It should be noted that the Urgency Ordinance would be effective immediately and will require a four-fifths vote for adoption. The Arroyo Grande City Council has been proactive on water conservation efforts and long-term water supply sustainability strategies starting in 2010 when permanent water use restrictions were adopted. On June 10, 2014, the City Council adopted a set of comprehensive strategies to address the City's long-term water supply needs. The objectives of these water supply strategies was to address long-term projected water demand through increased water conservation measures, and to protect the existing water supply by pursuing the future use of recycled water. On August 26, 2014, the City Council approved the water conservation public education program and authorized the City Manager to execute a consultant services agreement with Verdin Marketing, Inc. to develop and implement the water conservation public education program, and directed staff to develop a contingency Water Emergency Ordinance. The intent of the water conservation public education program was largely to direct Arroyo Grande water users to the City's water conservation programs to secure long-term and permanent water savings with the assistance of the marketing firm, Verdin. On February 24, 2015, the City Council adopted Ordinance No. 669 establishing an emergency Water Shortage Contingency Plan to be in place in case mandatory water use restrictions become necessary to meet water demand and to address any potential negative impacts on the City's water supply. The Ordinance included two methodologies based upon two stages of water shortage emergency: Item 9.a. - Page 2 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE 9 EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 3 of 13 Stage 1 Water Shortage Emergency A Stage 1 Water Shortage Emergency shall be declared when there have been impacts to the City's water supply and/or it has been determined that it is imminent that the water supply will be less than projected demand. All customers will then be required to reduce water usage by a percentage compared to the same billing period the prior year, which will be established by Resolution. S, tage 2 Water Shortage Emergency A Stage 2 Water Shortage Emergency shall be declared when it has been determined that it is imminent that the water supply is or will be equal to or less than amounts determined necessary to meet basic minimum household health and safety requirements. Therefore, the purpose of Stage 2 requirements is to limit water usage to the minimum amount necessary for public health since the City will likely need to make arrangements for some type of emergency water supply deliveries. On Wednesday, April 1, 2015, due to ongoing drought conditions and the historical low Sierra snowpack measurements, the Governor signed Executive Order B-29-15, enacting statewide mandatory water conservation requirements. The Governors Executive Order includes a requirement that the State Water Resources Control Board (SWRCB) impose restrictions to achieve a statewide 25% reduction in potable urban water usage through February 28, 2016. The required reduction is to be based upon a comparison to the amount of water used in 2013. The final regulations adopted by the SWRCB on May 5, 2015, imposed a 28% water use reduction on the City of Arroyo Grande. ANALYSIS OF ISSUES: Water Supply Impacts The City's water supply consists of Lake Lopez and groundwater. The extended drought is resulting in a reduction in deliveries of Lake Lopez water. In anticipation of the Lopez Lake level reaching the 15,000 Acre Foot (AF) level, which would trigger a 10 percent delivery reduction, staff has pro-actively reduced our Lake Lopez deliveries. In addition, the ongoing severe drought has significantly reduced ground water recharge, and even with reduced pumping, water elevations throughout the area declined by several feet, with some areas in the ground water basin finishing the year with water elevations below sea level. Additional impacts have occurred due to reduced subsurface inflow recharge from the east (Nipomo Mesa). These conditions, when combined with the ongoing impacts of groundwater pumping activities on groundwater levels, create conditions favorable for seawater intrusion. The City continues to work with other agencies to manage and protect both surface and groundwater supplies. However, all prudent measures to reduce demand must also be considered for implementation. Imminent restrictions in Lopez deliveries, concerning Item 9.a. - Page 3 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE 1 EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 4 of 13 groundwater conditions, and mandatory water use reduction requirements imposed by the SWRCB necessitate further water conservation by Arroyo Grande residents. On-going Mandatory Conservation Measures The existing permanent and mandatory conservation restrictions for Arroyo Grande residents include the following: • Use of water which results in excessive gutter runoff is prohibited. • No water shall be used for cleaning driveways, patios, parking lots, sidewalks, streets or other such use except where necessary to protect the public health and safety. • Outdoor water use for washing vehicles is allowed only with hand-controlled watering devices. • Outdoor irrigation is prohibited between the hours of 10:00 a.m. and 4:00 p.m. • Irrigation of private and public landscaping, turf areas and gardens is permitted at even-numbered addresses on Mondays and Thursdays and at odd-numbered addresses only on Tuesdays and Fridays. • No irrigation of private and public landscaping, turf areas and gardens is permitted on Wednesdays. • Irrigation is permitted at all addresses on Saturdays and Sundays. • Emptying and refilling swimming pools and commercial spas are prohibited except to prevent structural damage and/or to provide for the public health and safety. • Use of potable water for soil compaction or dust control purposes in construction activities is prohibited. In addition, the City Council recently amended the permanent and mandatory conservation restrictions to require water to be served in restaurants only upon request and hotels will be required to display signs in rooms instructing visitors to place towels on the floor only if they need to be replaced. The authority in establishing the plan is based upon provisions of the California Water Code relating to water shortage emergencies and water conservation programs (Water Code Sections 350 et seq. and Water Code Sections 375 et seq.). Options and Alternatives OPTION#1-Declaration of a Stage 1 Water Shortage Emergency(Recommended) Ordinance No. 669 includes a structure for declaring a water shortage emergencies and implementing provisions that will result in reduced water demand for the City. The declaration of a Stage 1 Water Shortage Emergency is based upon a determination that there are impacts to the City's water supply or that it has been determined that it is imminent that the City's water supply has or will become so limited that an emergency water shortage condition exists as far as the available water supply being less than projected demand. California Water Code Section 350 authorizes agencies to declare Item 9.a. - Page 4 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE I EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 5 of 13 emergencies upon a determination that the ordinary demands and requirements of water consumers cannot be satisfied without depleting the water supply to the extent that there would be insufficient water for human consumption, sanitation and fire protections. Given persisting severe dry conditions, low Lopez Reservoir levels and low groundwater levels, as well as the need to ensure that the Governors mandate will be met, it would be prudent to declare the City's Stage I Water Shortage Emergency condition at this time. This declaration would enable'reduced deliveries based on reduced demand that would be consistent with the Lopez Lake Low Level Response Plan, and that would allow City pumping activities to remain curtailed so that,conditions of the groundwater aquifer are not exacerbated. Importantly, it would give the City a high level of confidence that the Governor's mandate would be met rather than relying solely upon the City's incentivized conservation programs. The Declaration of Stage 1 Water Shortage Emergency includes three main components outlined in Exhibit "K of the Resolution. First, a baseline water amount based upon historical use is assigned to each residential customer. This is determined upon the amount of water used during the same billing period of the previous year prior to the declaration. Secondly, a requirement is imposed upon residential customers to reduce consumption by a certain percentage based upon their billing tier previously imposed with the City's Tiered Rate Structure. Commercial customers with irrigation meter accounts are proposed to have to reduce water use by 25% from the amount of usage of the assigned baseline water amount. Lastly, enforcement provisions are included in the resolution that include increasingly significant financial penalties to ensure that the scarce and irreplaceable commodity of water is equitably distributed and that it is conserved and used for the purposes of public health and safety. Based upon staffs analysis, it is proposed that residential customers in Tier I (bi- monthly usage of 0-18 units) be required to reduce consumption by 10% from the amount of usage of the assigned baseline. Customers whose use is 10 units or less shall not increase their usage above the amount of their assigned baseline. Residential customers in Tier 2 (bi-monthly usage of 1936 units) will be required to reduce consumption by 20% and those in Tier 3 (bi-monthly usage of 37 units or more), 30%. Partial units are rounded down. For example, a customer in Tier I who has a historical use of 8 units will not have a reduction but will need to stay at 8 units; a Tier I customer who's historical usage is 17 units will need to reduce 10% to 16; a Tier 2 customer with historical usage of 32 units would need to reduce to 26; and a Tier 3 customer at 57 units would need to reduce to 40. Attachment I includes sample calculations. Consequences of the proposed declaration include customers having to change habits regarding the use of water. Those residents that have already achieved substantial conservation may not need to modify habits at all, while others will have to make decisions with regards to landscaping versus domestic needs. It is important to note that the Stage 1 condition is intended to allow residents to choose how to utilize their Item 9.a. - Page 5 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE I EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 6 of 13 water rather than mandate specifically how reductions are achieved. In other words, it would allow the application of water for landscape purposes if the required allotment is not exceeded. Other consequences of Stage I include impacts to City staff resources. As proposed, water accounts will need to be analyzed to determine reduced allotments based on historical use and existing tiers and water bills will need to be modified in order to clarify requirements and enforcement provisions required by the declaration. It is likely that part-time contract staff will need to be hired in order to assist existing staff and to help assist the public with questions and concerns. Significant attention will be given to educating the public and designing notices and water bills to clearly communicate requirements and enforcement provisions. It is important to note that the intention of implementing Stage I is to address the temporary impacts to our water supply and not to supersede the long term goal of permanent water use reductions. Maintaining a commitment to permanent water use reduction through plumbing retrofits, turf removals, irrigation system retrofits promoted through a strong marking campaign is crucial. Commercial Properties and Irrigation Meters Under the proposed water use restrictions, commercial customers will be exempt from the overall water restrictions unless they have an irrigation meter. Many commercial businesses are unable to institute conservation measures without impacting public health and safety and the economic vitality of the City. In addition, they account for a relatively small percentage of the City's water use, 10% of total consumption. In a Stage 1 Emergency, irrigation accounts will be required to reduce water use by a specified percentage or be subject to a financial penalty. In a Stage 2 Emergency, no irrigation of outdoor landscaping with potable water will be allowed by commercial properties, and their meters will be shut off and billing will be suspended. Staff is proposing that commercial customers with irrigation meter accounts be required to reduce water use by 25% from the amount of usage of their baseline water amount. In addition, previous water conservation restrictions have been imposed on commercial properties in the form of specific measure for restaurants and hotels. Penalties and Enforcement Penalties are outlined in the proposed urgency ordinance. The purpose of the mandatory penalties is to assure compliance by the customer through the imposition of increasingly significant penalties so as to create incentive to reduce water use. It is recommended that the following mandatory financial penalties will be levied on all water users who fail to reduce consumption in the percentages required: • First Violation: Written notice of violation • Second Violation: $50 • Third Violation: $100 • Subsequent $200 Item 9.a. - Page 6 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE I EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 7 of 13 Violations may also be subject to referral to the City Attorney for appropriate action, including but not limited to prosecution under the Arroyo Grande Municipal Code, as well as possible discontinuance of service. Customers who incur penalties may have them waived by attending a minimum two- hour session of Water Conservation School, which will be conducted by the City of Arroyo Grande. The option to have penalties waived by attending Water Conservation School shall be available only one time for any customer who has incurred penalties. Water Conservation School will be offered three (3) to four (4) times per year on an as needed basis. It also should be noted that the penalties can be modified in the future by the City Council in the event it is deemed necessary based upon the severity of the Water Shortage Emergency. OPTION#2— Monthly Meter Reading andlor Monthly Billing (not recommended) An additional measure during a declared Water Shortage Emergency that is provided by AGMC Section 13.07.020 includes implementing monthly billing. Monthly meter reading and or/or monthly billing would benefit customers in that they would be better informed regarding potential over usage. However, staff resources to read meters on a monthly basis as well as monthly billing are substantial. Additional meter reading would include additional staffing resources and a corresponding reduction in current maintenance duties unless additional staff is hired. For example, six utility workers would be needed instead of the existing complement of three workers for a three-day cycle of meter reading for one-half of the City. Staffing necessary for re-reads, and non-payments may also prove problematic. Monthly water billing would include hiring a full time staff person as well as additional equipment and software costs. Additionally, there may be a fairness issue in terms of extrapolating the two- month historical base rate to one month for the required percent reduction. It is proposed to keep the meter reading and billing schedules unchanged and to focus resources on educating customers on meter reading and understanding their required reductions. OPTION#3 -Additional Restrictions for Outdoor Watering (not recommended) There are other tools that may be implemented in addition to or independent of the proposed Stage I Water Shortage Emergency declaration. One tool is to restrict outdoor watering to two days per week. Currently, the City restricts watering as outlined above in the City's ongoing mandatory water conservation measures. Water is not allowed on Wednesdays. Additional restrictions would include limiting watering to two days a week only; for example, Tuesdays and Saturdays for one-half of the City and to Wednesdays and Sundays to the other half. Some jurisdictions are implementing this measure, including the city of Paso Robles, and it"would be consistent with, but not a required component of the Govemor's recommendations. This 'measure would likely make gains in reduced demand in terms of reducing irrigation especially during summer months. However, a review of reductions achieved from "no-water Wednesdays" Item 9.a. - Page 7 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE I EMERGENCY WATER USE RESTRICTIONS MAY 26, 2016 PAGE 8 of 13 indicate only a small percentage of water is regularly saved likely due to additional watering on other days, and further restricting days may not gain the amount of savings required. Additionally, the two-day watering measure would further impede flexibility in terms of the wide diversity in landscape and customer needs. Additional staffing would also need to be expended on enforcement. Finally, this option would not allow customers to choose their methods of water reduction as envisioned and intended in Ordinance No. 669. OPTION#4 Moratorium (not recommended) An additional too[ related to mandate water demand reduction over time would be to implement a moratorium on new development; however as set forth in the following discussion, staff is not recommending a moratorium at this time. In 2008, the City declared a "severely restricted water supply condition" after it was determined that the City was using up to 99% of its water entitlements. In 2009, the City adopted urgency ordinance nos. 615, 618 and 622 to implement a moratorium on development applications requiring new water meters due to the serious water supply condition and water quality samples collected during that time that indicated constituents consistent with early signs of sea water intrusion. Today, the City utilizes approximately 73% of supply and long term build out projections for water demand and supply remain balanced based on build-out projections. Any increase in land use intensity beyond what was envisioned in the City's General Plan Land Use Element, are required to identify additional water supply of offset. Requirements for new development that fall within General Plan Land Use build out calculations include water conservation fixtures, irrigation control and drought tolerant landscape as well as water neutralization fees that are used for meeting continued supply needs. The City may also consider partnering on two potential regional recycled water projects to address continued sustainable supply in the long term. Recent updates to the General Plan Housing and Economic Development Elements prioritize continued modest infill development to meet housing needs and achieve economic sustainability. Both priorities would be seriously jeopardized by the implementation of a moratorium as impacts would include a housing shortfall and a further risk to the City's reputation as a reliable place to invest. Appropriate findings related to protecting the public health, safety or welfare would be needed. Stringent findings would also have to be made for a moratorium on projects that include multi- family housing. For a moratorium on water connections, findings would be made under Water Code 350 to "conserve the water supply for the greatest public benefit with particular regard to domestic use, sanitation, and fire protection". Although concerns about impacts to both surface water and groundwater supply are significant and warrant measures to ensure required reductions are met and vigilance to ensure supplies remain sustainable, a moratorium is not recommended as warranted at this time. Item 9.a. - Page 8 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE 1 EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 9 of 13 Should conditions worsen due to realized impacts to supply or other imposed mandatory reductions, a moratorium will be brought forward for Council consideration. OPTION#5 Stage 2 Water Shortage Emergency(not recommended) A Stage 2 Water Shortage Emergency is to be recommended if it was imminent that the water supply is or will be equal to or less than amounts determined necessary to meet basic minimum household health and safety requirements and the City would need to import water to meet health and safety needs. Although Stage 1 is recommended at this time as a prudent measure in order to address potential threats to projected supply, the City's water supply and demand projections are not at the point that there is an identified need for the importation of water to meet health and safety needs. Therefore, the declaration of a Stage 2 Water Shortage Emergency is not recommended as warranted at this time. Should conditions worsen due to realized impacts to supply or other imposed mandatory reductions, a Stage 2 declaration will be brought forward for Council consideration. OPTION#6— Reliance on current Conservation Measures (not recommended) Recent customer success in conserving water has created a trend of water demand reduction that may result in the savings necessary to comply with the Governor's order. Arroyo Grande water customers have made substantial progress on reducing water use, in-fact the City has reached and surpassed the water consumption rate reduction goal established by the State for the year 2020 of 149 gallons per citizen per day (gpcd). The City's gpcd for 2014 was 144. Average per capita consumption of water per year in Arroyo Grande: YEAR 2000 2013 2014 2020 Goal GPCD 192 159 144 149 Although the preferred option, given the City's own Water Shortage Contingency Plan, and the status of the water supply, it is not recommended at this time to continue to rely solely on incentivized conservation programs to guarantee required reductions. Water use by our customers continues to trend down, however the 28% reduction requirement based on 2013 consumption statistics begins on June 1, 2015. Based on the City's reduction of 16% water use reduction from the reporting period of 2013, Arroyo Grande water customers will need to maintain the current conservation gains and save an additional 12%. Based on the trajectory of the City's water use reductions, meeting the State's mandatory 28% reduction may not be achievable without mandatory restrictions. Item 9.a. - Page 9 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE 1 EMERGENCY WATER USE RESTRICTIONS MAY 26, 2016 PAGE 10 of 13 Water Conservation Status Below is a summary of the City's water conservation retrofit and rebate programs since 2009. Plumbing Retrofit Pro ram Year # Residential Units Estimated Gallons of Water Saved per Retrofitted Year 2009 77 900,000 2010 195 2,300,000 2011 114 1,400,000 2012 134 1,600,000 2013 76 900,000 2014 108 1,300,000 2016 (as of 5118119) 33 400,000 (27.0 acre feet) Total: Cash for Grass Rebate Program Summa Year #Applications # Grass Square Estimated Submitted Conversions Footage of Gallons of Completed Grass Water Saved Removed per Year 2009 94 65 81,238 1,462,284 2010 24 22 21,131 380,358 2011 23 21 30,333 545,994 2012 17 13 14,348 258,264 2013 14 10 15,472 278,496 2014 137 92 119,099 2,143,782 2016 (as of 99 13 17,410 313,380 5/18/19) 299,031 (6.86 5,382,558 Total: 408 236 acres) (16.72 acre feet) Item 9.a. - Page 10 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE 1 EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 11 of 13 Water Efficient Washing Machine Rebate Summa!3L. Year # Rebates Issued *Estimated Gallons of Water Saved per Year 2009 36 108,000 2010 20 60,000 2011 22 66,000 2012 15 45,000 2013 2 6,000 2014 17 51,000 2015 (as of 5118119) 9 27,000 121 363,000 Total: (1.13 acre feet) *Based on an average savings of 10 gallons/load from older washers, and an estimated 300 loads per household per year (average of 3,000 gallons per year per machine). Smart Irrigation Controller and Sensor Program: Year # Smart Irrigation *Estimated Water Controllers Savings Installed 2009 32 The standard water 2010 13 savings is 15%. 2011 5 The number of 2012 7 gallons saved 2013 2 depends on 2014 20 individual irrigation 2015 (as of 5118119) 2 design. Total: 81 As shown in the above tables, participation in the City's water conservation rebate programs was well received in 2009 when they were first implemented. Advertisement for these programs was strong during this time, but then tapered off for the next several years. Participation increased dramatically in 2014 when the City increased the rebate amounts for the Cash for Grass and Washing Machine Rebate Programs (this increase is more pronounced with the Cash for Grass Rebate Program). Cash for Grass Rebate Program Amendment The Cash for Grass Rebate Program currently applies to residential properties only. However, there has been recent interest from small businesses to take part in this program as well. Expanding the program to include small businesses would be Item 9.a. - Page 11 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE 1 EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 12 of 13 beneficial to the City by encouraging greater water conservation and hence bringing the City closer to meeting the State-imposed water reduction target. Similar to the restriction for residential properties, the requirement to remove a minimum of 500 square feet of turf would apply to businesses also. In addition, a restriction would be added that the rebate would not apply to commercial properties that have a dedicated irrigation meter. These properties are predominantly owned and developed by larger corporations and would not qualify as small businesses. It is proposed that properties with irrigation meters will be required to reduce their water use by 25% per the proposed Stage 1 Water Shortage Emergency Resolution, and hence the incentive for these properties is to comply and avoid penalties. Billinq and Adjustments The AGMC 13.07 sets forth criteria for adjustments to the water allocation or water reduction requirements if a customer can provide evidence of unique circumstances. If the criteria are met, the Public Works Director will have the authority to grant the adjustment. The existing Utility Billing Adjustment Committee will also be empowered to act as the Water Shortage Appeal Board (WSAB). Appeals of the WSAB decision can also be made to the City Manager and City Council. As noted, AGMC Section 13.07.020 also enables the City to change to billing on a monthly basis so customers can better monitor their water use. Is should be noted that the change to monthly billing will result in increased cost and staff work. It is estimated that this change would cost approximately $95,000 per year for additional staff in Administrative Services, printing, postage and bank fees associated with a higher volume of bills processed each month. Additionally, it will cost approximately $30,000 annually to perform meter reading in-house, plus a one-time investment of $30,000 in additional meter reading equipment. ALTERNATIVES: The following alternatives are presented for consideration: • Adopt the proposed Resolution and Urgency Ordinance; • Adopt the proposed Resolution and do not adopt the Urgency Ordinance; • Direct staff to modify the Resolution and/or Urgency Ordinance; • Do not adopt the Resolution and continue close monitoring and reporting of the City's water condition; • Do not adopt the Resolution and direct staff to pursue alternate strategies; or • Provide staff other direction. ADVANTAGES: Advantages of the proposed resolution to declare a Stage 1 Water Emergency and Urgency Ordinance to specify enforcement provisions include the provision of a high level of confidence that the Governor's order will be met and protections for City water supplies. Item 9.a. - Page 12 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE 1 EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 13 of 13 Adoption of a Stage 1 Water Shortage Emergency and the required reductions in water use will go toward preserving the limited water supply resources available to the City. Since we are beyond the rainy season, it is unclear how long the current severe drought will continue and how long the available water supplies will last. Also, adoption of the Urgency Ordinance will provide the full range of enforcement tools to provide for compliance with the Stage 1 restrictions. DISADVANTAGES: Water customers will be required to reduce water usage, which may create hardships on members of the community and have negative impacts on available staff resources. Adoption of the recommended Stage 1 Water Shortage Emergency will have a significant impact on staff resources and time, including but not limited to: • Responding to inquiries from residents to answer customer/property specific questions. • Conducting site visit with property owners about water conservation options and to conduct water audits. • Requests for water meter "re-reads." • Preparation of historical water use base-lines for each customer. • Response to requests for modifications to the established water use targets. • Increase in time necessary for the Utility Billing Adjustment Committee acting as the Water Shortage Appeal Board (WSAB) to review appeals. We anticipate that the time demands on staff for the first few months following implementation of Stage 1 Water Shortage Emergency will be substantial and may impact customer service levels. In addition, continued water use reductions will decrease revenues to the Water Fund and may require consideration of a future water rate adjustment. If the Resolution declaring a Stage 1 Water Shortage Emergency is adopted, failure to adopt the Urgency Ordinance will limit enforcement options. ENVIRONMENTAL REVIEW: The declaration of a Stage 1 Water Shortage Emergency and adoption of this Urgency Ordinance is categorically exempt from the California Environmental Quality Act ("CEQK) pursuant to 15307 of the State CEQA Guidelines (Actions by Regulatory Agencies for Protection of Natural Resources.) PUBLIC NOTIFICATION AND COMMENTS: A Notice of Public Hearing was published in The Tribune on Friday, May 15, 2015. The Agenda was posted in front of City Hall on Thursday, May 21, 2015 and the Agenda and staff report was posted on the City's website on Friday, May 22, 2015. No comments were received. Item 9.a. - Page 13 CITY COUNCIL CONSIDERATION OF ADOPTION OF A RESOLUTION IMPLEMENTING STAGE 1 EMERGENCY WATER USE RESTRICTIONS MAY 26, 2015 PAGE 14 of 14 ATTACHMENT: 1. Sample Calculation for Stage 1 Water Shortage Emergency Declaration Item 9.a. - Page 14 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DECLARING A STAGE 1 WATER SHORTAGE EMERGENCY IN ACCORDANCE WITH CALIFORNIA WATER CODE SECTION 350 AND ARROYO GRANDE MUNICIPAL CODE SECTION 13.07.030 WHEREAS, on February 24, 2015 the City Council of the City of Arroyo Grande adopted Ordinance No. 669 adding Chapter 13.07 to the Arroyo Grande Municipal Code relating to Emergency Water Shortage Restrictions and Regulations; and WHEREAS, Section 13.07.030 provides that after holding a noticed public hearing in accordance with the requirements of Water Code Section 350, et seq., the City Council may declare a Stage 1 Water Shortage Emergency based upon a determination that there has been impacts to the City's water supply, and/or it has been determined that it is imminent that the City's water supply.has or will become so limited that an emergency water shortage condition exists as far as the available water supply being less than projected demand; and WHEREAS, California Water Code sections 350 et seq. authorize the governing body of a public water supply distributor to declare that water shortage emergency conditions prevail within the area served by such distributor whenever it finds and determines that the ordinary demands and requirements of water consumers cannot be satisfied without depleting the water supply of the distributor to the extent that there would be insufficient water for human consumption, sanitation, and fire protection, and Water Code Section 353 provides that when such a water shortage emergency is declared the governing body shall adopt necessary regulations and restrictions on the delivery and consumption of water; and WHEREAS, on January 17, 2014, the Governor of the State of California proclaimed a state of emergency in the State of California due to current drought conditions in the state and the Governor's proclamation acknowledged that the State of California is experiencing extremely dry conditions that have persisted since 2012, and on April 25, 2014, the Governor issued a proclamation of a continued state of emergency under the California Emergency Services Act based on continuing drought conditions; and WHEREAS, on April 1, 2015, the Governor issued an Executive Order directing the imposition of further restrictions on water suppliers to achieve a statewide 25 percent reduction in potable urban water usage through February 2016, and the implementing regulations adopted by the State Water Resources Control Board mandate that the City of Arroyo Grande reduce its total potable water production by 28 percent for each month as compared to the amount of water used in the same month in 2013; and Item 9.a. - Page 15 RESOLUTION NO. PAGE 2 WHEREAS, The City of Arroyo Grande has a limited water supply that consists of two primary sources: Lake Lopez and groundwater. The San Luis Obispo County Flood Control and Water Conservation District has developed the Lake Lopez Low Level Reservoir Response Plan (LRRP) which provides for a series of management procedures that are to be followed when the reservoir level drops below 20,000 acre feet which includes reduced municipal water deliveries. In addition, significant concerns exist regarding groundwater pumping and the potential for seawater intrusion; and WHEREAS, as a result of the reductions in the reservoir level at Lake Lopez the San Luis Obispo County Flood Control and Water District Zone 3 Advisory Board has implemented a 10% reduction in deliveries of water to Lake Lopez member agencies,including the City of Arroyo Grande. Additionally, based upon the concerns about seawater intrusion, the City has reduced pumping groundwater; and WHEREAS, these actions, and the recently imposed mandatory 28% cutback imposed by the State of California, combined with the ongoing drought, the fact that this years rainy season has ended and the continued decline in the City's available water supply, has resulted in City Staff having advised the City Council that it has determined that the City's water supply has or will become so limited that an emergency water shortage condition exists and the available water supply is less than projected demand; and WHEREAS, pursuant to Chapter 13.07 of the Arroyo Grande Municipal Code, based upon the foregoing determinations, City Staff has recommended that the City Council declare a Stage 1 Water Shortage Emergency and implement reductions in water usage based upon Historical Use, as defined in Section 13.07.010 and as further set forth in Exhibit A to this resolution; and WHEREAS, the City of Arroyo Grande is granted authority by Water Code Sections 350 et seq. and by Arroyo Grande Municipal Code Chapter 13.07 to declare a Stage 1 Water Shortage Emergency and adopt by resolution regulations and restrictions on the delivery and consumption of water; and WHEREAS, in accordance with the requirements of Arroyo Grande Municipal Code Section 13.07.030 and Water Code sections 351 and 352, a public hearing on this declaration was duly noticed and held on May 26, 2015. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande does resolve, declare, determine, and order as follows SECTION 1. The foregoing Recitals are true and correct and are incorporated herein. Item 9.a. - Page 16 RESOLUTION NO. PAGE 3 SECTION 2. Pursuant to Arroyo Grande Municipal Code Section 13.07.030 and Water Code section 350, et seq. and for the reasons set forth herein, the City Council of the City of Arroyo Grande hereby declares that a Stage 1 Water Shortage Emergency now exists throughout the area served by the City of Arroyo Grande and that there have been impacts on the City's water supply such that the available water supply is less than projected demand and that the demands and requirements of the City's water consumers cannot be satisfied without depleting the water supply of the City to the extent that there would be insufficient water for human consumption, sanitation and fire protection. Based on this condition and on concerns regarding the anticipated prolonged drought conditions, and pursuant to the Arroyo Grande Municipal Code and the authority in Water Code Section 353, the City Council hereby implements reductions in water usage based upon Historical Use, as further set forth in Exhibit A, which exhibit is attached hereto and incorporated herein, which the City Council finds are necessary and appropriate to protect the health, safety and welfare of the public. SECTION 3. In accordance with the provisions of Section 13.07.030, and as further set forth in Exhibit "A", all residential water customers shall be assigned a baseline amount of water based upon the amount of water used during the same billing period of the previous year prior to the adoption of this Resolution. All residential customers shall reduce water usage by the percentage amount set forth in Exhibit A. Such percentages may be modified or amended by the City Council as deemed necessary and appropriate. Commercial customers with irrigation meter accounts shall reduce water use as set forth in Exhibit A. Residential and Commercial customers shall be subject to mandatory penalties for failing to meet required water use reductions, as provided in Exhibit A. SECTION 4. All other water conservation rules, regulations, restrictions, definitions, enforcement procedures, violation provisions and appeal procedures, including but not limited to those contained in Arroyo Grande Municipal Code Section 13.05.030, shall remain in full force and effect. SECTION 5. The adoption of this Resolution declaring a Stage 1 Water Shortage Emergency is categorically exempt from the California Environmental Quality Act ("CEQA") pursuant to 15307 of the State CEQA Guidelines (Actions by Regulatory Agencies for Protection of Natural Resources.) SECTION 6. If any section, subsection, sentence, clause, or phrase of this Resolution is for any reason held to be invalid, such determination shall not affect the validity of the remaining portions of this Resolution. The City Council hereby declares that it would have passed this Resolution and each and every section, subsection, sentence, clause, or phrase not declared invalid without regard to whether any portion of the Resolution would be subsequently declared invalid or unconstitutional. Item 9.a. - Page 17 RESOLUTION NO. PAGE 4 SECTION 7. The restrictions and regulations adopted herein shall remain in effect for the duration of the Stage 1 Water Shortage Emergency declared by this Resolution, and until rescinded or modified by the City Council. This Resolution shall be effective immediately upon its adoption. On motion of Council Member seconded by Council Member and by the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of May, 2015. Item 9.a. - Page 18 RESOLUTION NO. PAGE 5 JIM HILL, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: ROBERT MCFALL, INTERIM CITY MANAGER APPROVED AS TO FORM: HEATHER WHITHAM, CITY ATTORNEY Item 9.a. - Page 19 EXHIBIT "Aly CITY OF ARROYO GRANDE RESOLUTION DECLARATION OF A STAGE I WATER SHORTAGE EMERGENCY A. ASSIGNMENT OF BASELINE WATER AMOUNT BASED UPON HISTORICAL USE All residential customers and commercial customers with irrigation meters will be assigned a Baseline Water Amount based upon their Historical Use, as further set forth herein. Except when adjusted in accordance with the provisions contained in Arroyo Grande Municipal Code Section 13.07.070 A or B, the Baseline Water Amount shall be based upon the amount of water used during the same billing period of the previous year prior to the adoption of this Resolution. B. COMMERCIAL CUSTOMERS All commercial customers with irrigation meter accounts shall reduce water use by 25% from the amount of usage of the assigned Baseline Water Amount. Failure to reduce water use by this required percentage shall result in the imposition of the mandatory financial penalties contained in Subsection D, herein. C. REQUIRED RESIDENTIAL CUSTOMER WATER REDUCTIONS 1. Except for customers whose bi-monthly Baseline Water Amount is 10 units or less, residential customers in Tier 1 (bi-monthly usage of 0 to 18 units) shall be required to reduce consumption by 10% from the amount of usage of the assigned Baseline Water Amount. Customers whose bi-monthly use is 10 units or less shall not increase their usage above the amount of their assigned Baseline Water Amount. 2. All residential customers in Tier 2 (bi-monthly usage of 19 to 36 units) shall be required to reduce consumption by 20% from the amount of usage of the assigned Baseline Water Amount. 3. All residential Customers in Tier 3 (bi-monthly usage of 37 units or more) shall be required to reduce consumption 30% from the amount of usage of the assigned Baseline Water Amount. Failure to reduce water use by the required percentage shall result in the imposition of the mandatory financial penalties contained in Subsection D, herein. In accordance with Arroyo Grande Municipal Code Section 13.07.030, the City Council, may by resolution, increase the required percentage of reduction if it deems it Item 9.a. - Page 20 necessary in order to achieve the projected amount of water savings established as necessary. D. MANDATORY FINANCIAL PENALTIES The purpose of the mandatory penalties assessed pursuant to this resolution is to assure compliance by the customer through the imposition of increasingly significant penalties so as to create a meaningful incentive to reduce water use. In acknowledgment of the fact that the City's water is scarce and irreplaceable commodity, the intent is to equitably distribute that commodity among Water Department customers and to assure that, to the extent feasible, City water is conserved and used only for purposes deemed necessary for public health and safety. Accordingly, the mandatory penalties contained herein are not to be construed as creating a "Water pricing" structure pursuant to which customers may elect to pay for additional water at significantly higher rates. The following mandatory financial penalties will be levied on all water users who fail to reduce consumption in the percentages required in Subsections B and C herein, and customers whose bi-monthly use is 10 units or less and whose use increases above the amount of their assigned Baseline Water Amount: First Violation: Written notice of violation and opportunity to correct violation. Second Violation: The City shall impose a penalty of$50. Written notice shall be given to the owner by certified mail. The penalty will be billed to the customer on the regular water bill. Third Violation: A penalty of$100. Written notice shall be given to the owner by certified mail. The fine will be billed to the customer on the regular water bill. Subsequent In addition to a penalty of$200, continued Violations: violations may be subject to referral to the City Attorney for appropriate action, including but not limited to prosecution under the Arroyo Grande Municipal Code, as well as possible discontinuance of service. Failure to pay: The City may discontinue water service to any customer who fails to pay penalties billed on the regular water bill. Service will be restored upon full payment of all outstanding balances and reconnection charges. A delinquent bill shall also be increased by penalty of ten (10) percent of the amount of delinquency. Customers who incur penalties may have them waived by attending a minimum two hour session of Water Conservation School, which will be conducted by the City of Item 9.a. - Page 21 Arroyo Grande. The option to have penalties waived by attending Water School shall be available only one time for any customer who has incurred penalties. The foregoing penalties may also be modified or amended by the City Council as deemed necessary and appropriate based upon a determination of the severity of the Water Shortage Emergency. Item 9.a. - Page 22 ORDINANCE NO. AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE AMENDING SECTION 13.07.090 OF THE ARROYO GRANDE MUNICIPAL CODE RELATING TO PENALTIES AND ENFORCEMENT FOR VIOLATIONS OF EMERGENCY WATER SHORTAGE RESTRICTIONS AND REGULATIONS WHEREAS, on January 17, 2014, the Governor of the State of California proclaimed a state of emergency in the State of California due to current drought conditions in the state and the Governor's proclamation acknowledged that the State of California is experiencing extremely dry conditions that have persisted since 2012, and on April 25, 2014, the Governor issued a proclamation of a continued state of emergency under the California Emergency Services Act based on continuing drought conditions; and WHEREAS, on April 1, 2015, the Governor issued an Executive Order directing the imposition of further restrictions on water suppliers to achieve a statewide 25 percent reduction in potable urban water usage through February 2016; and WHEREAS, the Governor determined that the drought conditions will likely continue for the foreseeable future and additional action was needed by the State Water Resources Control Board and local water suppliers to further promote conservation; and WHEREAS, implementing regulations adopted by the State Water Resources Control Board on May 5, 2015 mandate that the City of Arroyo Grande reduce its total potable water production by 28 percent for each month as compared to the amount of water used in he same month in 2013; and WHEREAS, on February 24, 2015 the City Council of the City of Arroyo Grande adopted Ordinance 669, amending City of Arroyo Grande Municipal Code Section 13.05.030 and adding Chapter 13.07 to the Arroyo Grande Municipal Code relating to Emergency Water Shortage Restrictions and Regulations; and WHEREAS, after holding a duly noticed public hearing on May 26, 2015, in accordance with the requirements of Arroyo Grande Municipal Code Section 13.07.030 and Water Code sections 351 and 352 the City Council of the City of Arroyo Grande adopted a Resolution declaring that a Stage 1 Water Shortage Emergency now exists throughout the area served by the City of Arroyo and pursuant to the Arroyo Grande Municipal Code and the authority in Water Code Section 353, the City Council implemented reductions in water usage; and WHEREAS, Chapter 13.07 relating to Emergency Water Shortage Restrictions and Regulations was adopted prior to the Governor's April 1, 2015 Executive Order and the adoption of implementing regulations on May 5, 2015 by the State Water Resources Control Board mandating that the City of Arroyo Grande reduce its total potable water production by 28 percent for each month as compared to the amount of water used in the same month in 2013, and it is appropriate to amend Section 13.07.090 in Chapter 13.07 in order to clarify certain provisions in relation to Penalties and Enforcement. Item 9.a. - Page 23 ORDINANCE NO. PAGE 2 NOW, THEREFORE BE IT ORDAINED by the City Council of the City of Arroyo Grande as follows: SECTION 1. Section 13.07.090 of the Arroyo Grande Municipal Code is hereby amended to read as follows: 13.07.090 Penalties and Enforcement. A. Penalties. The purpose of the mandatory penalties assessed pursuant to this Chapter and set forth in a resolution of the City Council declaring a Stage 1 or Stage 2 Water Shortage Emergency is to assure compliance by the customer through the imposition of increasingly significant penalties so as to create a meaningful incentive to reduce water use. In acknowledgment of the fact that the City's water is scarce and irreplaceable commodity and that this Chapter is intended to equitably distribute that commodity among Water Department customers and to assure that, to the extent feasible, City water is conserved and used only for purposes deemed necessary for public health and safety, such mandatory penalties are not to be construed as creating a "water pricing" structure pursuant to which customers may elect to pay for additional water at significantly higher rates. B. A customer's repeated use of excessive water during a Stage 1 or 2 Water Shortage Emergency may result in criminal prosecution as a misdemeanor, and may result in the installation of a flow restriction device or disconnection of the customer's property from the City's water service system at the customer's cost, as further set forth herein. Flow restriction devices shall not be installed on residences that have fire sprinkler systems. C. Misdemeanor. In addition to, and completely separate from, the civil penalties for excessive water use, any person who knowingly and willfully violates the provisions of this Chapter during a Stage 1 or 2 Water Shortage Emergency shall be guilty of a criminal misdemeanor as provided in the general penalty provisions of this Code. In accordance with Section 1.16.010, such misdemeanor violations may, at the discretion of the City Attorney, be initially charged or subsequently prosecuted as an infraction. All previous attempts by the City to obtain compliance by the defendant may be introduced as evidence of the offender's knowledge and willfulness. D. Discontinuing Service. In addition to any penalties, misdemeanor criminal prosecution and the installation of a water flow restrictor, during a Stage 1 or 2 Water Shortage Emergency the Director may disconnect a customer's water service for willful violations of mandatory restrictions and regulations in this Chapter and Chapter 13.05. Upon disconnection of water service, a written notice shall be served upon the customer which shall state the time, place, and general description of the prohibited or restricted activity and the method by which reconnection can be made. Item 9.a. - Page 24 ORDINANCE NO. PAGE 3 E. Cost of Flow Restrictor and Disconnecting Service. A person or entity that as a result of violations of this Chapter has a flow restrictor installed or water service disconnected is responsible for payment of charges for installing and/or removing the flow-restricting device and for disconnecting and/or reconnecting service in accordance with the City's fee schedule then in effect. The charge for installing and/or removing any flow restricting device must be paid before the device is removed. Nonpayment will be subject to the same remedies as nonpayment of basic water rates. SECTION 2. If any section, subsection, subdivision, paragraph, sentence, or clause of this Ordinance or any part thereof is for any reason held to be unlawful, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, or clause thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, or clause be declared unconstitutional. SECTION 3. In accordance with Government Code section 36937, this ordinance is adopted as an urgency measure to be effective immediately in order to preserve the public peace, health, and safety. The facts constituting the urgency are that on May 26, 2015 the City Council of the City of Arroyo Grande declared a Stage 1 Water Shortage Emergency in accordance with Arroyo Grande Municipal Code Section 13.07.030 and Water Code section 350, et seq.; the Governor's actions on January 17, 2014, April 25, 2014 and April 1, 2015 declaring a state of emergency in California, and issuing an Executive Order requiring a statewide 25 percent reduction in potable water usage; the adoption of implementing regulations by the State Water Resources Control Board on May 5, 2015 mandating that the City of Arroyo Grande reduce its total potable water usage by 28 percent; and the continued ongoing drought conditions. Accordingly, it is necessary that the amendments to Section 13.07.090 relating to Emergency Water Shortage restrictions and regulations set forth in this ordinance be effective immediately in order to protect the supply of water for human consumption, sanitation and fire protection. The City Clerk, or her duly appointed deputy, shall attest to the adoption of this ordinance and shall cause this ordinance to be posted in the manner required by law. On motion by Council Member _, seconded by Council Member and by the following roll call vote to wit: AYES: NOES: ABSENT: the foregoing Ordinance was adopted this_day of May, 2015. Item 9.a. - Page 25 ORDINANCE NO, PAGE 4 JIM HILL, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: ROBERT MCFALL, INTERIM CITY MANAGER APPROVED AS TO FORM: HEATHER WHITHAM, CITY ATTORNEY Item 9.a. - Page 26 ���� � ,,, ,��~,,°,~,�°~ � , SAMPLE CALCULATION FOR STAGE 1 WATER SHORTAGE EMERGENCY DECLARATION - REQUIRED RESIDENTIAL CUSTOMER WATER REDUCTIONS In order to calculate your required reduction and allotment amount,follow these steps: 1) Enter the consumption amount from the same billing period in the previous year; 2\ If the amount entered in line 1 is less than or equal to 18, enter .10 on line 2; if the amount in line 1 |s greater than or equal to 19 but less than or equal to 36, enter .20 on line 2; if the amount in line 1 is greater or equal tV37, enter.30 on line 2; 3\ Multiply line 1by line 2 and enter result; 4) Round line ] down to the nearest whole number (i.e. 4,5 rounds down to 4; 7.9 rounds down to7. This is your reduction requirement; 5) Subtract line 4 from line 1. This is your bi-mnonth|y allotment amount. Ex Ex Ex Ex4 Historical Unit of 1 Consumption 0 17 32 57 96 Reduction 2 Requirement 8.10 0.10 0.20 0.30 Unit Reduction 3 Requirement 0.80 1'70 6.40 17.10 ` 4 Rounding 0 1 6 17 Tota{ Bi'montM|y 5 Allotment 0 16 26 40 Item 9.a. - Page 27 THIS PAGE INTENTIONALLY LEFT BLANK Item 9.a. - Page 28