In the News

As rationing begins, no direct offset for growth
Conservation plan doesn't require projects be demand-neutral

By J.M. Brown, Santa Cruz Sentinel, 4/27/14

Santa Cruz -- As the Santa Cruz Water Department prepares Thursday to enact residential rationing for the first time in nearly 25 years, there is no formal mechanism in place to guarantee that new demand on the drought-vulnerable system generated by development projects is directly offset.

Water officials are close to finalizing a $13 million plan to neutralize a projected 15 percent growth in demand during the next 20 years. But the menu of conservation strategies — heavily reliant on giveaways and rebates for high-efficiency fixtures, leak repairs and plumbing code updates — does not mandate that new water use for projects ranging from condominium buildings and hotels to granny units and residential remodels be negated on a one-to-one basis.

In addition to small building projects going on throughout the city, a 94-unit condo complex eyed for lower Pacific Avenue will come up for approval later this year while a major transformation of the 44-unit La Bahia Apartments into a 165-room hotel is also in the pipeline.

The city charges hefty connection fees for new residential service — $6,500 for a single-family home and nearly $4,000 for accessory dwelling units — that partially fund an existing conservation program, which has helped Santa Cruz rank in the lowest 6 percent of per-capita water users in California. Since 2009, the fees have generated $1.1 million to fund rebates for improved fixtures and appliances.

But critics of now-stalled plans for a seawater desalination plant to produce extra supply during dry periods have long called for a formal offset program to more clearly demonstrate that growth won't worsen the long-term quandary of supply reliability and further burden existing customers.

The neighboring Soquel Creek Water District, the city's desalination partner, has had a demand offset mandate for 11 years to prevent further groundwater overdraft. Ahead of a June debate over a moratorium on new hookups, the district is expected to announce soon how much actual conservation has taken place as a result of the program, which requires developments to reduce 1.6 times their anticipated water use.

Rosemary Menard, the city's water director, said she believes the long-term Water Conservation Master Plan currently in development will sufficiently wipe out projected increases in demand. But she said the department will nonetheless look at ways to correlate new hookups and water savings more closely.

"There is openness on our part to make it more transparent," she said. "I'm not saying we can't find a way that there could be a clearer link (between development and offsets)."

But Menard stresses requiring direct offsets won't solve the current water shortage, which has led to rationing single-family accounts at 249 gallons per day and less for multi-family units after three consecutively dry years. Beginning Thursday, customers face fines of $25 to $50 for each unit of water — equal to 748 gallons — that exceeds the rationing limits.

In years with normal rainfall, the Santa Cruz water system generates about 4.2 billion gallons, enough to meet existing demand of 3.5 billion as well as projected growth of 500 million within the next 15 to 20 years. The conservation proposal calls for reducing demand by 532 million gallons each year in 2035.

But in dry years, when cumulative runoff from the San Lorenzo River and North Coast streams drops to the historically low levels seen now , officials say steep cutbacks are the only solution to meet even current demand in the absence of a new supply source. In any year, the city must also address mandated flow restrictions in the river and streams that protect habitat for endangered fish species.

"The amount (of demand) caused by new development is not the difference between whether we have a shortage or whether we don't," Menard said.

City Manager Martín Bernal said, "Our problem is a drought issue, not a growth issue. It's completely different than the Soquel Creek issue."

But desalination opponent Rick Longinotti, a member of the city's new Water Supply Advisory Committee, has been calling for a water-neutral development policy for years. He argues that conservation contemplated in the master plan should be dedicated to reducing current demand so that acute shortfalls in supply have less impact on existing customers in the future.

"We should be able to allow the kind of growth the community wants while preventing an increase in water demand," he said.

Longinotti believes developers should undertake more costly measures that are not part of the city's proposed conservation plan — such as sharply increased rebates for turf removal and other water-wise landscape and irrigation changes — because it will encourage them to build "super-efficient" projects.

Former mayor Bruce Van Allen, now the spokesman for Longinotti's Desal Alternatives, agreed.

"New development should offset increased demand both on-site and system-wide," Van Allen said. "On site, new construction can use the latest designs and technologies so that buildings consume much less water from the ground up. Any new user of water should pay to reduce consumption in the whole water system, rather than reducing drought security for everyone else."

While the city determines how to fund the new conservation plan, Menard said the Water Department could consider dedicating a larger share of the system connection fees to the effort. However, she said, a downside to relying on fees to pay for conservation is that when development slows, as it did sharply during the recent recession years, funding drops amid a long-term need to reduce water use.

Developers would rather pay fees to fund conservation than directly negate new use by identifying offsets on their own. More than 90 percent of single-family homes in Santa Cruz already have high-efficiency toilets and shower fixtures, leaving clothes-washing machines as the biggest area for improvement.

Deidre Hamilton, a Santa Cruz land-use consultant, said if the city adopts a formal offset program similar to Soquel Creek's it would increase pressure on developers.

"You can only find so many offsets," she said, adding that a fee-based system eliminates uncertainties over time and costs. "Even if it is a high fee, you know when you make the application."

Mary Gourlay of Barry Swenson Builder, who managed the Aptos Village Plan recently approved for water service from the Soquel Creek district, said finding toilet replacements and other offsets was time-consuming and expensive. She noted that Santa Cruz city officials are counting on development to achieve housing, employment and transportation goals.

"Just the time involved and risk, without knowing where (the conservation) would come from, it would deter interest in terms of how much it could really stop new development or projects from happening," she said.

Widely agreed is that a moratorium on new hookups, while under consideration for the Soquel Creek district because of its long-term overdraft, would cause more problems than it would solve for Santa Cruz. Hamilton said the city can simultaneously set use limits and support development as long as mandatory conservation is in place to deal with occasional shortfalls in supply.

"If you don't allow development, you are cutting off your nose to spite your face," she said. "You want to have the economy continue to flourish, so you have to provide for that. If we don't have new development, there are no new taxes going in."

Longinotti also does not favor a moratorium, saying a demand-neutral policy should be the focus.

"We need measures just to get to the place where we have a sustainable water supply," he said.

The dangers of a moratorium are plain in Cambria, a town of about 6,000 residents on the San Luis Obispo County coast that closed a waiting list of more than 600 new water hookups 13 years ago because two creeks that supply its drinking water are vulnerable to drought and the fouling of pumping wells.

Mel McCulloch, president of the Cambria Chamber of Commerce board, said the moratorium has stagnated the tourism-driven economy, pushing businesses out and discouraging new ones. It also has gutted the local construction industry and left hundreds of property owners with empty lots — and that was well before steep rationing was enacted in March.

"There is nothing being done here now but an occasional remodel," McCulloch said. "Therefore, younger people have left Cambria for other areas. Some people are having to sell their lots because they are getting older and can't wait to build."

Before discussion of a moratorium June 3, the Soquel Creek district board will meet Tuesday to discuss whether to approve requests for new service on the condition that building projects, such as the much publicized Twin Lakes Church school, eventually prove water-demand offsets. Meanwhile, the Santa Cruz Water Department has scheduled four final workshops this week to help residents understand the rationing program that starts Thursday.

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