CC 2015-07-28_11b Water Conservation Incentive ProgramsTO:
FROM:
MEMORANDUM
CITY COUNCIL
DROUGHT TEAM (TERESA MCCLISH, COMMUNITY DEVELOPMENT
DIRECTOR; GEOFF ENGLISH, PUBLIC WORKS DIRECTOR; DEBBIE
MALICOAT, ADMINISTRATIVE SERVICES DIRECTOR; RYAN
CORNELL, ACCOUNTING MANAGER; SHANE TAYLOR, UTILITIES
SUPERVISOR; KELLY HEFFERNON, ASSOCIATE PLANNER)
SUBJECT: CONSIDERATION OF COUNCIL DIRECTION ON THE CITY'S WATER
CONSERVATION INCENTIVE PROGRAMS
DATE: JULY 28, 2015
RECOMMENDATION:
It is recommended the City Council:
1) Increase funding for the Cash for Grass Program for fiscal year (FY) 2015-16
and 2016-17 and appropriate $131,000 from the Water Neutralization Fund in
FY 2015-16 forthe Program; and
2) Eliminate the following water conservation incentive programs for FY 2015-16
and 2016-17:
a. Smart Irrigation Controllers
b. Landscape Irrigation Retrofit
c. System Water Loss Mitigation
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The Water Conservation Program continues to result in a substantial commitment of
staff resources. However, addressing water supply is one of the City's priorities
identified in the Critical Needs Action Plan.
Currently, the Cash for Grass Program will be over budget by approximately $240,000 if
all rebate applications are processed.
The Water Conservation Program was designed to achieve the City's water
conservation goals by 2020 over an implementation period of 5.5 years. Expenditures
currently projected for FY 2015-16 and 2016-17 are as follows:
Program
Turf Removal Program
Washing Machine Rebates
Smart Irrigation Controller Program
FY 2015-16
$60,000
$8,000
$8,000
FY 2016-17
$60,000
$8,000
$8,000
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CITY COUNCIL
CONSIDERATION OF COUNCIL DIRECTION ON THE CITY'S WATER
CONSERVATION INCENTIVE PROGRAMS
JULY 28, 2015
PAGE2
Landscape Irrigation Retrofit
Plumbing Retrofit Program
System Water Loss Mitigation
City Landscape Irrigation
Water Survey Program
Public Education Campaign
Total
$6,000
$52,050
$25,000
$40,000
$20,000
$70.000
$297,050
$6,000
$52,050
$25,000
$40,000
$20,000
$70,000
$297,050
To ensure that sufficient funds are available for the Cash for Grass Program in the
current fiscal year, staff recommends that specific Water Conservation Program funds in
FY 2016-17 be rolled over to the current year. The proposed budget is as follows:
Program
Turf Removal Program
Washing Machine Rebates
Smart Irrigation Controller Program
Landscape Irrigation Retrofit
Plumbing Retrofit Program
System Water Loss Mitigation
City Landscape Irrigation
Water Survey Program
Public Education Campaign
Total:
Difference:
FY 2015-16
$274,000
$8,000
$2,000
$2,000
$52,050
$0
$40,000
$20,000
$30,000
$428,050
$131,000
FY 2016-17
$0
$8,000
$0
$0
$52,050
$0
$40,000
$20,000
$30.000
$150,050
($147,000)
It is anticipated that remaining fund balances at the end of FY 2015-16 for the Water
Conservation Program will be rolled over to FY 2016-17 (for reference, approximately
34% of the Cash for Grass applications received have not been completed). The 5.5
year Program is funded from the following projected sources:
Existing Water Mitigation Fee Funds $190,000
Future Projected Water Mitigation Fee Revenue $275,000
Annual Funds Programmed in Water Fund for Conservation $275,000
Funding Available from Expiration of OCSD Water Purchase Agreement $825.000
Total $1,565,000
Reallocating funding as detailed above results in a savings of $16,000 over the two-year
budget.
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CONSIDERATION OF COUNCIL DIRECTION ON THE CITY'S WATER
CONSERVATION INCENTIVE PROGRAMS
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BACKGROUND:
The City has implemented a comprehensive approach to meeting projected water
supply demand and water conservation goals. In May of 2003, the City Council adopted
a Water Conservation Program. Phase I of the program began in April of 2004, which
focused on retrofitting existing residential plumbing with low flow fixtures. In 2008, the
City Council appropriated $50,000 from the Water Neutralization Fund to initiate water
conservation rebate programs for turf removal, high efficiency washing machines and
smart irrigation controllers.
At the June 10, 2014 City Council meeting, staff updated comprehensive strategies to
address the City's long-term water supply needs. The primary objectives of the
recommendations were to address long-term projected water demand through
increased water conservation measures, to protect existing water supply by pursuing
initial studies for a project that will use recycled water to prevent seawater intrusion, and
to coordinate with neighboring jurisdictions to manage the overall water supply in the
most effective manner possible.
The City Council approved all the recommendations except proposed funding for a
water conservation public education program. Consideration of this program was
deferred and staff was requested to provide more detail on what the program would
entail. Some concerns were also expressed regarding the proposed cost for the
program.
In addition, it was emphasized that the water supply recommendations were designed
to address future projected demand under normal weather and supply conditions and
any project aimed at preventing seawater intrusion could take up to 10 years to
implement. Therefore, an extended drought would likely cause problems for the City.
As a result, staff was directed to establish a Water Shortage Emergency Plan.
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 prepare a contingency Water Emergency
Ordinance that was adopted on February 24, 2015. At that meeting, Council asked staff
to return with an update on the City's water conservation public education program,
which staff provided on March 10, 2015. Subsequently, on April 1, 2015 the Governor
issued the fourth in a series of Executive Orders on actions necessary to address
California's severe drought conditions, which directed the State Water Board to
implement mandatory water reductions in urban areas to reduce potable urban water
usage by twenty-five percent (25%) statewide. On May 5, 2015, the State Water Board
adopted an emergency conservation regulation in accordance with the Governor's
directive. On May 26, 2015, the City Council declared a Stage 1 Water Shortage
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CONSIDERATION OF COUNCIL DIRECTION ON THE CITY'S WATER
CONSERVATION INCENTIVE PROGRAMS
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Emergency and implemented water restrictions and regulations to residential and
irrigation water services.
During the last drought, the per capita water use went down to 156 gpd in 2010 and
then quickly went up the following year 2011 to 170 gpd following heaver than normal
rainfall. Our goal is to maintain a sustaining conservation ethic for the City resulting in
the same low level of water consumption after the drought is over due to recurring
drought cycles.
ANALYSIS OF ISSUES:
The City's water conservation incentive programs have been tremendously successful
during the last six (6) months due to several factors, which include increased awareness
about the drought, a robust marketing effort assisted by Verdin Marketing, Inc. and the
recently imposed water use restrictions. In particular, citizen participation in the Cash
for Grass Program has far exceeded expectations. In 2014, Council integrated a
landscape irrigation retrofit program, system water loss mitigation project, City
landscape irrigation retrofit program, and a water use survey into the water conservation
programs. Due to high participation in some programs and less in others, and due to
confidence levels in long-term reliable water savings, each program has been reviewed
in order to address budged concerns. An overview of these programs is discussed
below.
Water Conservation Strategy
Below is a pie chart outlining the proposed Water Conservation Strategy to meet the
target of 149 gallons per resident per day by 2020.
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CONSIDERATION OF COUNCIL DIRECTION ON THE CITY’S WATER
CONSERVATION INCENTIVE PROGRAMS
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Summary of Water Conservation Programs
Plumbing Retrofit Program
Cash for Grass Rebate Program
Water Efficient Washing Machine Rebate Program
Smart Irrigation Controller and Sensor Program
Large Area Irrigation Retrofits
Landscape irrigation retrofit program
Public Education Program
System Water Loss Mitigation Project
City Landscape Irrigation Retrofit Program
Water Use Survey Program
The Plumbing Retrofit Program replaces old, high water-use fixtures for residential units
built prior to 1992. All parts and labor required for the retrofit are provided free of
charge. The retrofit includes replacing the following fixtures:
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• Toilets -replace with ultra low-flow 1.6 gallons per flush (as of January 1, 2014
the requirement is 1.28 gallons per flush). Cost is $235 -$290 per toilet.
• Indoor Faucets -install aerators designed for 2.0 gallons per minute. Cost is $5
per faucet.
• Showerheads -replace with 2.5 gallons per minute. Cost is $13 per
showerhead.
• Pressure Regulator -inspect and adjust or install new regulator not to exceed 80
pounds per square inch (psi). Cost is $135 for a new pressure regulator.
This program is voluntary; however, in February 2005 the City Council adopted an
ordinance implementing a mandatory plumbing retrofit program upon the change of
ownership of any real property. The seller must retrofit the property's plumbing fixtures
to meet the criteria of low-water use. Staff estimates that this program saves 7.5 AFY of
water. The goal is to retrofit 150 homes per year. Because this is a successful, on-
going program that generates long-term water savings, staff recommends that this
program be continued.
The Cash for Grass Rebate Program provides a financial incentive for homeowners and
businesses to remove existing turf and replace it with a less water-intensive landscape.
The goal of the program is to encourage a permanent reduction in the amount of water
used for landscaping. In 2014, the City increased the rebate payment from $0.50 to
$1.00 per square foot of turf removed, and the minimum amount of turf to be removed
was increased from 250 to 500 square feet with a maximum amount of eligible turf
removal capped at 5,000 square feet. Staff previously estimated that this program
saves 3.3 acre feet per year (AFY) of water. This estimate is low based on the gaining
popularity of the program and more recent citizen participation.
Since program inception, 266 turf removal projects have been completed removing
342,706 square feet (7.9 acres) of grass. Since January 2015, a total of 239
applications have been submitted. For comparison, a total of 310 applications were
submitted between March 2009 and December 2014. Hence, forty-four percent (44%)
of all applications were submitted within the last seven (7) months. Given that the
average turf conversion is 1,300 square feet and 18 gallons of water is saved annually
per square foot of turf removed, each application represents approximately 23,400
gallons of water saved per year. With 239 applications pending, this represents a total
of 5,592,600 gallons of annual water savings, or 17.37 AFY.
To date, $26,417 in rebates has been issued for FY 2015/16, which leaves a program
fund balance of $33,583. Approved applications (turf measured within the last six
months) total approximately $272,000. This amount does not include applications that
have exceeded the six (6) month time limit to complete the turf conversion project. In
previous years, the time restriction was not firmly enforced to allow time for customers
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to complete the project and to ultimately achieve the desired water savings. If the time
restriction is waived and all pending rebates are paid, the program would be over
budget by roughly $340,000. Staff recommends that the City enforce the time
stipulation. ·
The recommended budget reallocation would allow the program to continue; however,
once funds are used the program would cease. Given the current the number of
pending applications, the rate of application submittal and the recommended budget
amount, it is estimated that this program would extend ten to twelve months. Because
this is a very successful, on-going program that generates long-term water savings,
staff recommends that this program be continued.
The Water Efficient Washing Machine Rebate Program provides a rebate of $200
(increased in 2014 from $150) for CEE Tier 3 washers. On February 10, 2015 the City
Council removed the local purchasing requirement for the Water Efficient Washing
Machine Rebate Program. On average, a high-efficiency washer uses 20% less energy
and 35% less water than regular washers, which can save up to 5,250 gallons per year
per household. Since March 2009, a total of 152 rebates have been issued (38 rebates
since January 2015). Staff estimates that 0.8 AFY of water is saved with this program.
The goal is to replace 40 washers per fiscal year. To date, $2,200 in rebates has been
issued for FY 2015/16, which leaves a project fund balance of $5,800, or twenty-nine
(29) rebates. Although this program does not represent a relatively large amount of
water savings, it is a successful program given the amount of participation and the
limited overall cost. Therefore, staff recommends that this program be continued.
The Smart Irrigation Controller and Sensor Program provides an irrigation audit with
recommendations for system improvements and a smart controller with weather-based
sensor technology to replace older controllers for residential properties. The City pays
up to $300 for a new controller per residence. The City contracts with Sprinkler King,
Inc. to conduct the water audits and provide the controllers to qualifying participants. To
date, 99 water audits have been performed, most of which have installed smart
controllers. For FY 2015/16, a total of $1,200 in rebates has been issued, leaving a
project fund balance of $6,800. The estimated water savings is 0.9 AFY with this
program. The goal is to achieve 20 installations per year. Because this program has
not received much participation relative to the City's other water conservation incentive
programs and is more cumbersome to manage, staff recommends that this program
be discontinued.
Since 2009, the City has contributed to Large Area Irrigation Retrofits for commercial,
institutional and homeowner association (HOA) water users. To date, the City, with the
assistance of Sprinkler King, Inc., have retrofitted the following properties:
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• Oak Park Blvd Landscaping • Vista Del Mar HOA
• Woodland Pocket Park • Wildwood Ranch HOA
• Strother Park • Five Cities Center
• St. Patrick's School • Kmart Center
• Sunrise Terrace Mobilehome Park • Cemetery District
• Paulding School • Rancho Grande Park
• Ocean View School
It is estimated that 17.39 AFY is saved from the Strother Park, Paulding School, Ocean
View School, Cemetery District and Rancho Grande Park retrofits (audits for
determining post-project water savings have not been completed for the other
properties). The goal is to contact other large commercial, institutional and HOA water
users to encourage participation in the program. However, because most of the large
area irrigation retrofits have already been completed, staff recommends that this
program be discontinued.
The Landscape Irrigation Retrofit Program includes retrofitting outdated spray heads
and drip emitters for existing residences. As mentioned above, Sprinkler King, Inc. has
conducted 99 residential irrigation audits for the City and provided information on the
average sized landscape retrofit. This includes replacing sprinkler heads with MP
rotators and/or drip irrigation emitters. The estimated water savings is 30% per retrofit.
The cost for an average residential irrigation retrofit using MP rotators and emitters, less
labor costs, is $200. The estimated water savings is 0.8 AFY. The goal is to achieve 20
installations per year.
On February 10, 2015 the City Council approved combining the Smart Irrigation
Controller Program and the Landscape Irrigation Retrofit Program for a total maximum
rebate of $500. Because this program has not received much participation relative to
the City's other water conservation incentive programs and is more cumbersome to
manage, staff recommends that this program be discontinued.
The System Water Loss Mitigation Project was programmed to include a leak detection
survey of the City's water distribution system. Staff believes that through a
comprehensive leak detection survey and repair of identified water loss locations, a 2%
reduction to the City's water system loss is attainable. However, the City's water
distribution system is already operating at a minimal loss of about 5%, and funds could
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PAGE9
be used for programs with higher water savings. Staff recommends that this program
be discontinued.
The City-owned Property Landscape Irrigation Retrofit Program provides funding for a
comprehensive effort to reduce water use at City parks and landscape areas. This
program involves turf removal and irrigation retrofit projects. Turf removal areas are re-
landscaped with drought tolerant landscaping. Arroyo Grande in Bloom has been
consulted on the re-landscaping designs and final design plans was reviewed by the
Arroyo Grande Parks and Recreation Commission on March 11, 2015. It is estimated
that this program generates a water savings of approximately 14 AFY. Staff
recommends that this program be continued.
The Water Use Survey Program involves the use of existing Public Works Utilities
Division staff to conduct water use surveys at targeted residential and commercial
properties. Funding for this program is programmed to hire a temporary employee to
back-fill the duties of one current Utilities Division employee. During the five and one-
half year program, staff's goal will be to contact all of our water system customers to
arrange for a Water Use Survey. However, the high use customers will be targeted first.
Following the Water Use Survey, customers will be referred to existing water
conservation programs and other necessary corrections that will help the customer
reduce water use. It is estimated that this program will generate water savings of
approximately 2.5 AFY in addition to increasing participation in other incentive
programs. Public Works staff has prepared the water audit survey tools and will begin
full implementation of this program during the summer of 2015. Staff recommends
that this program be continued.
The Public Education Program includes a consultant team under contract with Verdin
Marketing, Inc. with both the City and the City of Pismo Beach to design an extensive
public education marketing campaign for a far reaching water conservation education
program. The program has been developed and is being implemented. ~ncluded as
Attachments 1 is Verdin's summary of accomplishments to date. The estimated total
water savings is approximately 23 AFY for this program.
It is important to clarify that the purpose of the public education program is to help meet
water conservation goals to address the City's long-term future projected water demand.
It is not simply designed to educate the public about the immediate need to conserve
water due to the drought. The intent of this program is to: 1) promote incentives offered
by the City to assist residents in changing water related equipment and appliances that
will make permanent reductions in water use; 2) modify ongoing behaviors to use less
water during normal daily activities; and 3) provide education on how water savings can
be best achieved. Therefore, while the program was anticipated to be most intensive
during the first year, some level of ongoing effort will be needed to continue to achieve
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CITY COUNCIL
CONSIDERATION OF COUNCIL DIRECTION ON THE CITY'S WATER
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PAGE10
the water savings on a permanent basis through modified behavior by consistently
reinforcing the information.
Given that the two cities have already invested in this program and have seen a
significant increase in water conservation incentive program participation, staff
recommends that this program continue but be limited, at a reduced cost of
$30,000 per year for website maintenance and other public outreach activities. The
current contract for Verdin Marketing, Inc. will expire on September 14, 2015.
Projected Water Savings:
It expected that the City will save a total of 124 AFY by 2020 through implementation of
the various water conservation programs.
Implementation Strategies:
The City's Water Conservation Team meets regularly to implement the work program.
Staff monitors the programs and provides updates to the City Manager and Council.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
Increase funding for the Cash for Grass Program for fiscal year (FY) 2015-16 and
2016-17 and appropriate $131,000 from the Water Neutralization Fund in FY
2015-16 for the Program, and eliminate the following water conservation
incentive programs for FY 2015-16 and 2016-17:
o Smart Irrigation Controllers
o Landscape Irrigation Retrofit
o System Water Loss Mitigation
Reallocate a reduced amount to the Cash for Grass Program, allow the funds to
run out and suspend the Program until FY 2016-17.
-Allocate an additional amount of funds from the water fund. However, although
the fund is meeting minimum fund balance requirements, the water fund is
underperforming due to a combination of water conservation (which negatively
impacts water revenues) and a higher than anticipated increase in salary and
benefits. On a future date, staff will present a more detailed analysis of the water
fund and the options City Council has to maintain a healthy fund balance
Do not reallocate additional funding to the Cash for Grass Program, allow the
remaining funds to run out and suspend the Program until FY 2016-17.
Reduce the Cash for Grass Program rebate amount from $1.00 to $0.50 a
square foot, which would be consistent with other agencies (specifically Pismo
Beach and Paso Robles). This would extend the program beyond the projected
ten to twelve months.
Item 11.b. - Page 10
CITY COUNCIL
CONSIDERATION OF COUNCIL DIRECTION ON THE CITY'S WATER
CONSERVATION INCENTIVE PROGRAMS
JULY 28, 2015
PAGE 11
-Reduce the maximum Cash for Grass Program rebate amount from $5,000 to
$2,500 (or other amount).
-Reallocate all of the Water Conservation Program funds to the Cash for Grass
Program.
-Suspend all water conservation programs since the City has already achieved its
goal as mandated by the State's 20 x 2020 Water Conservation Plan.
ADVANTAGES:
Conservation efforts are the most cost effective option to address water supply needs
and are within the City's control to proceed. It is intended to work in addition to the
Northern Cities Management Area (NCMA) work program that is designed to protect the
groundwater supply and ensure the City will have access to its full allocation of this
water resource in the future. The comprehensive water conservation strategy provides a
feasible alternative to meet both demand and State requirements. Support of the Cash
for Grass Program promotes a permanent reduction in water use.
DISADVANTAGES:
Ongoing water conservation programs require ongoing costs and funding.
Discontinuing some of the programs reduce incentive options for customers to
conserve.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, July 23, 2015. The Agenda
and staff report were posted on the City's website on Friday, July 24, 2015. No public
comments were received.
Attachment:
1. Verdin Summary of Work
Item 11.b. - Page 11
WEBSITE
I ATTACHMENT 1
ARROYO GRANDE -PISMO BEACH
WATER CONSERVATION
JUNE PERFORMANCE REPORT
SUMMARY
Website traffic continues to grow with over 1600 users visiting the page in June alone, with the majority
coming from mobile/tablets {66%). The pages with the highest amount of traffic are the rebates, tips and
mandatory restrictions pages, showing that people are interested in participating in conservation and learning
ways they can help.
SOCIAL MEDIA
Facebook continues to remain strong with excellent engagement rates and a growing number of likes and
followers. Reach is remaining high despite the small target community suggesting that the content being
shared is considered useful and engaging to the user.
Twitter continues to grow, although at a much smaller pace, which is reflective of the medium across all indus-
tries. Quality of followers on Twitter always trumps quantity, and the Think H20 account has a high quality of
users, as the majority of them are local journalists who are actively engaging with the brand.
ADVERTISING
Digital Advertising is consistently bringing in engagement numbers that are much higher than the national
average. Pandora is continuing to be an excellent tool for getting out the message, as many people are
engaging with the ad and clicking-thru for more information. Digital Ad creative has been updated and we
expect this fresh round of advertising to bring in even higher number in July.
Beyond the digital advertising, the Regal Cinemas ad was completed and began running on all screens on June
12. The ad runs 40x daily across all screens and June's estimated attendance was over 40,000.
BUSINESS AND COMMUNITY OUTREACH
A presentation has been completed by Mike de Milo and arrangements are being made to schedule
presentations at local service clubs, the Chamber of Commerce, HOAs, Church Groups, etc. Verdin has also been
pricing and designing some large installation marketing pieces, and designing material to use and be
distributed at various community water symposiums.
All-in-all, the marketing efforts have been a great success as shown by both cities going above and beyond
their mandated water conservation numbers from the governor. Conservation is quickly becoming a habit for
residents.
verdin* 3580 Sacramento Dr. #110, San Luis Obispo, CA 93401 t 805/541/9005 f 805/541/9007
a vision for your brand
Item 11.b. - Page 12