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Home My WebLink AboutStaff Report 295-10TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: UTILITIES DATE: JULY 12, 2010 CMR: 295:10 REPORT TYPE: CONSENT SUBJECT: Approval of a Memorandum of Understanding with the Santa Clara Valley Water District to Provide up to $271,785 Per Fiscal Year for a Total of $815,355 Over Three Fiscal Years for the Continued Administration of and Funding for Water Conservation Programs and Rebates for City of .Palo Alto Utilities' Customers RECOMMENDATION Staff recommends that Council: Approve and authorize the City Manager or designee to execute the attached Memorandum of Understanding (MOU) with the Santa Clara Valley Water District (SCVWD) to provide for continued administration of and funding for water conservation programs and rebates in fiscal years 2010-2011 through 2012-2013 at a cost of up to ~271,785 per year for a total of $815,355 over the three year period. 1bese funds have been approved in the Utilities department operating budget for Fiscal Year 2011. EXECUTIVE SUMMARY Due to concern about long-term water supplies and related State requirements for aehieving ongoing water savings, Council developed a Colleagues' Memo in December 2009 directing the City Manager to explore ways to reduce potable water use in Palo Alto by 20% in 2020. The recommended plan to reduce water use wa.., approved by Council on April 19, 2010. This proposed Memorandum of Understanding (MOU) with the Santa Clara Valley Water Distriet (SCVWD) will help to achieve the reduction plan by continuing a multi-year water conservation cost-sharing program for residential and business rebates and programs. The City of Palo Alto has implemented many water conservation programs during the last two decades, but it still remains one of the highest per capita water users in the San Francisco Bay Area. The efficiency programs covered in this MOD will help to adcJress this high per capita water use level by supplementing the county-wide programs athninistered by SCVWD with additional funds from the City's water utility. Audits and rebates will continue .to be delivered by the SCVWD, v\lith the City matching payments to customers who reduce water usage. For example, while others in the County receive rebates of $0.75 per square foot for high-water using landscape conversion, Palo Alto residents and businesses receive a rebate of up to $1.50 per square foot. Palo Alto businesses -.~.c--:---------------------------,-- CMR: 295:10 Page I of5 will also receive an enhanced rebate amount through an incentive program designed to promote innovation and improvements in facility water use efficiency. Several of the program areas covered in this MOU address the higher water consumption, including replacement of toilets, urinals, and high-water using landscape (i.e. turf grass). The recommended program budget is an increase from the previously approved and amended MOU, to assist in achieving these higher water consumption reduction goals. The MOU includes a budget of not to exceed $271,785 per year for up to three years. DISCUSSION In December 1991, Council approved a MOU with the California Urban Water Conservation Council (CUWCC), CMR:550:91, to promote 14 Best Management Practices (BMP) for water conservation strategies. Staff continues to report on thesc BMPs every two yeflrs. The last completed report was in 2008, and an update will be developed at the end of calendar year 2010. In September 2002, Council approved CMR 359:02, which included the first MOU with SCVWD to cost-share water conservation programs. As part of the overall water conservation efforts, the City of Palo Alto Utilities (CP AU) and SCVWD have partnered over the la~i eight years to promote and cost-share water eonservation programs. On September 6, 2007 (CMR 344:07), the City Council approved an updated cost-share MOU with a maximum cost of $442,715 over three years to continue to cost-share water conservation programs. These programs were expanded by an additional $125,000 for the remaining period on April 27, 2009 (CMR 200:09) to allow for greater residential cOllServation programs and more rebates, primarily in reducing the amount of high-water using landscapes (turf grass or lawn). After an analysis of historical rebates and incentives, customer participation, and effectiveness of each program in achieving these goals, a major modification is being made to one program in the MOU. In order to make the residential clothes washer rebate program simpler for Palo Alto residents to understand and improve program marketability CPAU now will manage the program separately from the SCVWD. Since 2008, SCVWD, and several Bay Area Water and Conservation Agency (BA WSCA) member water agencies, have jointly marketed efficient clothes washer programs with Pacific Gas and Electric Company (pG&E) for the energy savings component. This caused confusion and significant processing delays when Palo Alto residents were required to send their rebate applications for both water and energy to PG&E. With this administrative change, Palo Alto residents will receive a single rebate for both the water and energy savings for efficient clothes washers through the CPAU SMART Energy program. The SCVWD/PG&E partnership will continue to 'offer clothes washer rebates to Palo Alto residents until the program transition to CP AU is completed this fall. CMR: 295:10 Page 2 of5 The programs, their targets, and their budgets in the proposed MOU are detailed below: Proposed Palo Alto Annual Total Program Estimated Program Program NumberPer Cost Palo Alto Cost for Palo Annual Designation Description Year In Palo Per ,+teasure Program Alto (for 3 Savings per Alto Cost years) Measure SS~-Audit $21,500 $64,500 for Pre 1980: audits; $11,340 Water-Wise for admin. Program I Hou.eCall 430 per Fiscal 12 CCF/home Year Program $315 -Monthly TOTAL = Administration $3,780 $75,B40 Post 1980: 4CCF/home Full Survey: $532 Landseape 15 per Fiscal Standard: $355 TOTAL = Program 2 Survey $7,980 800 CCFI acre Program Year Follow Up: $370 $23,940 WBiC Survey Per Controller: $170 Landscape Up to $150: ET Rebate Residential: Program: 1-12 stations . 0.348 AFIYear TOTAL = ET Small Weather 25 perFY Up to $350: $5,000 $15,000 Com: 1.75 Based 13-24 stations AFlYear Irrigation Up to $500: ETLarge Controllers : Com: 3.98 25 + stations I AFIY~ Landscape 50 Residential Up to $1,000 per Rebate Sites per FY residential site Estimated 30% Program 3 Program: TOTAL = water $115,000 $345,000 reduction Water during peak Efficient 7 Conunercial Up to $10,000 per irrigation Landscape Sites per FY conunerciaJ site months Conversion !. , Landscape 10 Residential Estimated 30% Rebate Sites per Fiscal 50% of total water Program, Year rebate-up to $500 TOTAL = reduction Irrigation per residential site $7,375 $22,125 doringpeak System 3 Conunercial and $2,000 per irrigation I Hardware Sites per Fiscal commereial site months Rebates Year C::C-~~----------------------........ - CMR: 295:10 Page 3 of5 ! Residential Single Family & Multi- Program 4 Family Efficiency Toilet Rebate Program Commercial & Multi- Family High- Program 5 Efficiency Toilet Installation Program Commercial Clothes Program 6 Washer Rebate Program Large Program 7 Commercial Indoor Water Surveys Water Efficient Program 8 Technology (WET) Program Com, Rebate Program Program 9 (high- efficiency urinal rebates only) 200 per Fiscal $75 $15,000 Year 150 per Fiscal $150 $22,500 Year 12 per Fiscal $200 $2,400 Year • 15 per Fiscal $1,000 $15,000 Year 10 perFY 50% of total rebate $50,000 25 per Fiscal Up to $250 per $6,250 Year urinal CPAUPerFY· $271,785 CP AU Total Cost for 3 years 8815,355 ! I ! HETSF: TOTAL = 11 CCF I toilet $45,000 HETMF: 21 CCFltoilet TOTAL = 22 CCF !toilet $67,500 ! 43 CCFI TOTAL = $7,200 washer TOTAL = 1,402 CCFI $45,000 site : Total = 1,250 CCFI $150,000 I site Total = 33 CCF I urinal $18,750 These are goals only, funding for these programs is interchangeable and useable by any ofthese programs as needed and agreed upon by the SCVWD and CPAU. In delivering these programs, implementation and many administrative functions for these programs (e.g. provide scheduling, budget tracking and invoicing, contractor oversight, customer servioe, and project reporting associated with program implementation) is handled by SCVWD staff in San Jose. Customer support, marketing, and water saving reporting activities are completed by CPAU Marketing Services staff. CMR: 295:10 Page 4 of5 I I City Council approved a plan to reduce water consumption by 20% by 2020 (CMR 212:10). One of the methods to achieve this plan was a recommendation to continue to pursue and emphasize customer conservation and efficiency rebatcs and incentives. This MOU will assist in achieving the recommendation. RESOURCE IMPACT The Water Enterprise Funds for the programs provided under this Memorandum of Understanding (MOU) with the Santa Clara Valley Water District (SCVWD) are included in the FY 2011 Utilities Operating Budget. Additional funds as necessary will be included in the budget requests for FY 2012 and 2013. POLlCY IMPLlCA TIONS This recommendation is consistent with the Council approved Utilities Strategic Plan Key Strategy 6: "Provide targeted customer and environmental programs and service" and the Council Policy to reduce water usage by 20% by 2020 (CMR:212:1 0). ENVIRONMENTAL REVIEW The approval of this Memorandum of Understanding is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Sections 15307 (Actions by Regulatory Agencies for Protection of Natural Resources) and 15308 (Actions by Regulatory Agencies for Protection of the Environment). The SCVWD is the lead agency with respect to programs covered by the MOU. ATTACHMENTS A: Memorandum of Understanding (MOU) B: Appendix A to MOU; Cost Sharing Amounts PREPARED BY: ~'40YCE KINNEAR o Manager, Utility Marketing Services APPROVED BY: DEPARTMENT APPROVAL: CITY MANAGER APPROVAL: CMR: 295:10 .r;\)TOM AUZENNE ~ Assistant Director of Utilities VALE_ Direct of Utilities JA Cit ,It! Page 5 of5 ATTACHMENT. A MEMORANDUM OF UNDERSTANDING BETWEEN THE SANTA CLARA VALLEY WATER DISTRICT AND THE CITY OF PALO ALTO FOR RESIDENTIAL AND COMMERCIAL WATER CONSERVATION PROGRAMS Fiscal Year 2010-2013 This MEMORANDUM OF UNDERSTANDING (MOU) between the Santa Clara Valley Water District (hereinafter referred to as DISTRICT) and the City of Palo Alto (hereinafter referred to as PALO ALTO) sets forth the respective roles of the DISTRICT and PALO ALTO in regard to the DISTRICT'S RESIDENTIAL AND COMMERCIAL WATER CONSERVATION PROGRAMS (hereinafter referred to as PROGRAMS) is made and entered into as of __ _ _____ , 2010. RECITALS WHEREAS the PROGRAMS involve providing a variety of strategic residential and commercial water conservation programs; and WHEREAS these water conservation PROGRAMS are appropriate Best Management Practices for residential, commercial, industrial and institutional accounts addressed in the MOU regarding Urban Water Conservation in California; and WHEREAS Palo Alto wishes to participate in said PROGRAMS; NOW, THEREFORE, in consideration of the recitals and mutual obligations of the parties herein expressed, DISTRICT and PALO ALTO agree as follows: 1. DISTRICT'S RESPONSIBILITIES a) Administration of PROGRAMS 1 through 9 (see APPENDIX A: Programs, Targets and Budgets). b) Collection of data to determine usage and water savings. Data will be put together by the DISTRICT and provided to PALO ALTO, c) Administration of all PROGRAM funds. d) Invoicing PALO ALTO on a quarterly basis for each of the PROGRAMS 1 through 9 (aggregate invoice, broken down by program). e) Work cooperatively with PALO ALTO in appropriately advertising the PROGRAMS 1 through 9 to targeted customers. f) Meet with PALO ALTO staff on a quarterly basis to discuss the various program statuses and outreach strategies. g) Verification of qualifying installed program measures. 2. PALO ALTO'S RESPONSIBILITIES a) Identification and notification of all prospective Palo Alto participants in all PROGRAM offerings. b) Work cooperatively with DISTRICT in appropriately advertising PROGRAMS to the targeted customers. c) Provide DISTRICT with electric and water usage records and other data necessary to determine savings and cost effectiveness of the various PROGRAMS. d) Pay CO-funding amounts as described in APPENDIX A and Programs 1 through 9. e) Make payment to DISTRICT within 60 days of receipt of invoice from DISTRICT. 3. CEQA DISTRICT is responsible for assuring that the PROGRAMS comply with the requirements of the California Environmental Quality Act (CEQA) and that all necessary documents have been filed. 4. HOLD HARMLESS AND LIABILITY MOU SCVWD/Palo Alto, Water Conservation Programs, 2010-2013 Pagel In lieu of and notwithstanding the pro rata risk allocation, which might otherwise be imposed between PARTIES pursuant to Government Code Section 895.6, the PARTIES agree that all losses or liabilities incurred by one of the PARTIES shall not be shared pro rata, instead, PALO ALTO and DISTRICT agree that, pursuant to Government Code Section 895.4, each of the PARTIES hereto shall fully indemnify and hold each of the other PARTIES, their officers, board members, employees, and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined in Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees or agenta, under or in connection with or arising out of any work, authority or jurisdiction delegated to such party under this AGREEMENT. No party, nor any officer, board member or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other PARTIES hereto, their officer, board members, employees, or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other PARTIES under this AGREEMENT. 5. DOCUMENT REVIEW DISTRICT and PALO ALTO will make available for inspection to the other party, upon reasonable advance written notice, all records, books and other documents relating to the PROGRAMS. 6; TERM The term of the MOU is from July i. 2010 through June 30, 2013. or not to exceed $271,785 per year, for a total of $815,355 over the three year term. The term of the MOU may be extended by mutual consent of the Parties acting through their authorized representatives. This MOU is contingent upon approval of program funding each fiscal year by the DISTRICT's Board of Directors and PALO ALTO's City Council. In the event such contingency is not met, this MOU terminates on the first day of the fiscal year for which funding is not approved. 7. NOTICE Any notice, payment, credit or instrument required or permitted to be given hereunder is deemed received upon personal delivery or five (5) days after deposit in any United States mail depository, first class postage prepaid and addressed to the party for whom intended; or on the same day as a facsimile or email transmission is sent as long as original is placed in the mail, as provided above, on the same day. If to DISTRICT: If to PALO ALTO: Santa Clara .valley Water District 5750 Almaden Expressway San Jose, CA 95118-3614 Attn: Jerry De La Piedra, Program Administrator Facsimile: (408) 979-5639 City of Palo Alto Utilities 250 Hamilton Ave., 3"' Floor Palo Alto, CA 94301 Attn: Catherine Elvert, Utility Account Representative Facsimile: (650) 617-3140 Either party may change such address or contact person by notice given to the other party as provided herein. 8. AMENDMENTS The MOU may be amended as circumstances necessitate by written agreement executed by both parties. 9. ASSIGNMENT Neither party may assign, sublet, or transfer this agreement or any of the rights or interests in this agreement without the written consent of the other party. MOU SCVWD!Palo Alto, Water Conservation Programs, 2010·2013 Page 2 10. SEVERABILITY The partial or total invalidity of one or more parts of this MOU will not affect the intent or validity or remaining parts of this MOU. 11. GOVERNING LAW This MOU will be deemed a contract under the laws of the State of California and for all purposes shall be interpreted in accordance with such laws. 12. TERMINATION OF AGREEMENT This MOU may be terminated by either party hereto for any reason upon thirty-(30) days written notice to the other Party. . 13. SIGNATURES The individuals executing this MOU represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. In WITNESS WHEREOF, the parties have executed this MOU as of the effective date. APPROVED AS TO FORM: Amy Bartell Deputy City Attorney ATTEST: Valerie Fong Director, City of Palo Alto Utilities APPROVED AS TO FORM: EMIL Y J. COTE . Assistant District Counsel CITY OF PALO ALTO, CALIFORNIA James Keene City Manager Address: 250 Hamilton Ave" 3'd FI. Palo Alto, CA 94301 Telephone: 650.329.2241 Facsimile: 650.617.3140 SANTA CLARA VALLEY WATER DISTRICT BEAU GOLDIE Chief Executive Officer Address: 5750 Almaden Expressway San Jose, CA 95118 Telephone: 408.265.2600 Facsimile: 408.267.3127 MOU SCVWD/Palo Alto, Water Conservation Programs, 2010-2013 Page 3 ATTACHMENT B MEMORANDUM OF UNDERSTANDING BETWEEN THE SANTA CLARA VALLEY WATER DISTRICT AND THE CITY OF PALO ALTO FOR RESIDENTIAL AND COMMERCIAL WATER CONSERVATION PROGRAMS Fiscal Year 2010-2013 Appendix A: Programs, Targets and Budgets The programs, their targets, and their budgets in the proposed MOU are detailed below: , Proposed Palo Alto Annual Total Estimated Program Program Number Per Cost, Palo Alto Program Cost Annual Designation Description Year in Palo Per Measure 'Program for Palo Alto Savings per Alto Cost (for 3 years) Measure , $64,500 for $50 -Audit $21,500 audits; Pre 1980: 511,340 for admin, Water-Wise 430 per Fiscal 12 CCFI Program 1 House Call home Program Year $315 -Monthly $3,780 TOTAl = Post 1980: Administration $75,840 4CCFI home Full Survey: $532 Landscape Standard: $355 15 per Fiscal TOTAL = 800 CCFI Program 2 Survey Year $7,980 $23,940 acre Program Follow Up: $370 WBIC Survey Per Controller: $170 MOU SCVWD/Palo Alto, Water Conservation Programs, 2010-2013 Page 4 Proposed Palo Alto Annual Total Estimated Program Program Number Per Cost Palo Alto Program Cost Annual Designation Description Year in Palo Per Measure Program for Palo Alto Savings per Alto Cost . (for 3 yealS) Measure Landscape ET Rebate Up to $150: Residential: Program: 1-12 stations 0.348 AFfYear TOTAL = ETSmall Weather 25 per FY Up to $350: $5,000 $15,000 Com: 1.75 Based 13-24 stations AFfYear irrigation Up to $500: ET Large Controllers Com: 3.98 25+ stations AFfYear Landscape 50 Residential Up to $1,000 per Rebate Program: Sites per FY residential site Estimated Program 3 TOTAL = 30% water $115,000 $345,000 reduction during peak Water irrigation Efficient 7 Commercial Up to $10,000 per months Landscape Sites per FY commercial site Conversion Landscape 10 Residential Rebate Sites per Fiscal 50% of total Estimated Program: Year rebate-up to 30% water $500 per $7,375 TOTAL = reduction Irrigation 3 Commercial residential site $22,125 during peak System Sites per Fiscal and $2,000 per irrigation Hardware commercial site months Rebates Year HET SFD: Residential 11 CCFI High 200 per Fiscal TOTAL = toilet Program 4 Efficiency $75 $15,000 Toilet Rebate Year $45,000 HETMFD: Program 21 CCFI toilet ! ! MOU SCVWD/Palo Alto, Water Conservation Programs, 2010-2013 Page 5 . Proposed Annual Total Estimated Palo Alto Program Program Program' Number Per Cast Pa/oAlto Cost for Annual Designation Description Year in Palo Per Measure Program Pa/oAlto. Savings per Alto Cost (for 3 yean) Measure Commercial & Multi· Family High- Program 5 Efficiency 150 per Fiscal 5150 $22,500 TOTAL = 22CCF Toilet Year $67,500 Iloilel Installation Program , . Commercial Clothes 12 per Fiscal 43 CCFI Program 6 Washer $200 $2,400 TOTAL = Rebate Year $7,200 washer Program Large Program 7 Commercial 15 per Fiscal $1,000 $15,000 TOTAL = 1,402 CCFI Indoor Water Year $45,000 sile Surveys Water Efficient 50% of lola I Total = 1,250 CCFI Program 8 Technology 10 per FY $50,000 (WET) rebale $150,000 site Program Com. Rebate . : I Program (high· 25 per Fiscal Up to $250 per Total = 33 CCFI Program 9 efficiency Year urinal $6,250 $18,750 urinal urinal rebates only) City of Palo Alto Total per Fiscal Year $271,785 City of Palo Alto Total for Three years $815,355 NOTE: These are goals only, funding for these programs is interchangeable and useable by any ofthese programs as needed and agreed upon by the DISTRICT and PALO ALTO. MOU SCVWD/Palo Alto, Water Conservation Programs, 2010-2013 Page 6 :