Loading...
HomeMy WebLinkAbout06-18-25 F&A Committee Packet 1 OTAY WATER DISTRICT FINANCE AND ADMINISTRATION COMMITTEE MEETING and SPECIAL MEETING OF THE BOARD OF DIRECTORS 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA BOARDROOM WEDNESDAY JUNE 18, 2025 12:00 P.M. This is a District Committee meeting. This meeting is being posted as a special meeting in order to comply with the Brown Act (Government Code Section §54954.2) in the event that a quorum of the Board is present. Items will be deliberated, however, no formal board actions will be taken at this meeting. The committee makes recommendations to the full board for its consideration and formal action. AGENDA 1. ROLL CALL 2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD’S JURISDICTION INCLUDING AN ITEM ON TODAY’S AGENDA DISCUSSION ITEMS 3. ADOPT ORDINANCE NO. 600 TO APPROVE THE PROPOSED CHANGES TO SECTION 23 OF THE DISTRICT’S CODE OF ORDINANCES, NON- RESPONSIBILITY OF DISTRICT (JON CHAMBERS) [5 MINUTES] 4. ADOPT ORDINANCE NO. 599 AMENDING SECTION 25 AND SECTION 53 OF THE DISTRICT’S CODE OF ORDINANCES TO ADD VARIANCE ALLOWANCES FOR WATER AND SEWER FEES AND CHARGES, AND TO INCORPORATE OTHER MISCELLANEOUS UPDATES (ANDREA CAREY) [5 MINUTES] 5. AWARD A PROFESSIONAL SERVICES AGREEMENT TO E SOURCE COMPA- NIES LLC, AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE AN AGREEMENT WITH E SOURCE COMPANIES LLC FOR PROJECT MANAGE- MENT SERVICES FOR THE METER CHANGEOUT PROJECT FOR FISCAL YEARS 2026 THROUGH 2031, IN AN AMOUNT NOT-TO-EXCEED $808,575 (ANDREA CAREY) [5 MINUTES] 6. REDUCE CIP P2718 FROM $1,675,000 TO $939,120 AND AWARD A CONTRACT TO SPRYPOINT SERVICES, INC. TO REPLACE THE DISTRICT’S UTILITY BILL- 2 ING AND CUSTOMER INFORMATION SYSTEM IN AN AMOUNT NOT-TO- EXCEED $2,668,288 (MICHAEL KERR) [5 MINUTES] 7. ADJOURNMENT BOARD MEMBERS ATTENDING: Gary Croucher, Chair Jose Lopez All items appearing on this agenda, whether or not expressly listed for action, may be de- liberated and may be subject to action by the Board. The agenda, and any attachments containing written information, are available at the Dis- trict’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the agenda and attachments are also available by contacting the District Secretary at (619) 670-2253. If you have any disability which would require accommodations to enable you to participate in this meeting, please call the District Secretary at 670-2253 at least 24 hours prior to the meeting. Certification of Posting I certify that on June 13, 2025, I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 24 hours in advance of the meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on June 13, 2025. /s/ Tita Ramos-Krogman, District Secretary STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: July 2, 2025 SUBMITTED BY: Jon Chambers, Meter Services Supervisor PROJECT: DIV. NO.All APPROVED BY: Andrea Carey, Customer Service Manager Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Adopt Ordinance No. 600 to Approve the Proposed Changes to Section 23 of the District’s Code of Ordinances, Non- Responsibility of District GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Ordinance No. 600 to approve the proposed changes to Section 23 of the District’s Code of Ordinances, Non- Responsibility of District. COMMITTEE ACTION: See Attachment A. PURPOSE: To present proposed revisions to Section 23 of the District’s Code of Ordinances, Non-Responsibility of the District, for the Board’s consideration, and to request that the Board approve these changes by adopting Ordinance No. 600. BACKGROUND: To protect the public water supply, the State of California has established regulations to prevent backflow incidents into public water systems. Previously, the California Department of Public Health’s Administrative Code, Title 17, provided a framework for agencies to establish cross-connection control and backflow protection regulations. AGENDA ITEM 3 In 2017, Assembly Bill 1671 was signed into law, mandating the State Water Resources Control Board (SWRCB) to adopt statewide standards for backflow protection and cross-connection control. On December 19, 2023, the SWRCB adopted the Cross-Connection Control Policy Handbook (CCCPH). The CCCPH went into effect on July 1, 2024, and, as a result, the Title 17 cross-connection control standards were repealed on October 1, 2024. The CCCPH establishes statewide standards for backflow prevention and cross-connection control. It mandates all public water systems to submit a Cross-Connection Control Plan by July 1, 2025. This plan must outline each agency’s comprehensive cross-connection prevention program. To remain compliant with the new regulations, the District must update Section 23 of its Code of Ordinances to align with the CCCPH requirements. Additionally, minor revisions are being proposed to reflect current products, practices, and building code requirements. ANALYSIS: Section 23, Non-Responsibility of District, details the District’s cross-connection program and associated enforcement measures. Staff recommends multiple updates to various definitions and terminology throughout this section to align with the CCCPH, ensuring consistency and clarity. For example, definitions for backflow and cross-connection have been revised to match those used in the CCCPH and the District’s Cross- Connection Control Plan. Section 23 describes when backflow prevention assemblies are required for sites deemed to contain a hazard. To better align these requirements with the CCCPH, staff is recommending changes to Section 23.04.B to address high-hazard sites, including those with wells or auxiliary water systems. Section 23.04.H is also updated to clarify requirements for sites with auxiliary water sources and to provide guidance on when a backflow prevention assembly is no longer required at sites containing wells. Furthermore, staff is recommending updating requirements in Section 23.04.I to allow for the use of site user supervisors at complex and multi-piping system sites identified by the District. The site user supervisor would be responsible for notifying the District of any backflow events within 24 hours of the event occurrence. Currently, only sites where recycled water is used require site user supervisors; this change would be an expansion of that program. The CCCPH requires every public water system to perform hazard assessments for each parcel where potable water service is provided. The District’s plan includes a 10-year schedule for the initial assessments of high-hazard sites (e.g., commercial, industrial, and large multi-family properties) and a 40-year timeline to complete assessments for all remaining properties. In Section 23.04.J, these assessments are currently referred to as water system surveys. Staff recommends replacing the term survey with hazard assessment. Additionally, in response to the expanded requirements for hazard assessments, staff recommends adding additional language clarifying when hazard assessments are required and to stipulate that properties denying District access will be required to install a backflow prevention device. The CCCPH also establishes stricter enforcement timelines for non-complaint or failed testing sites. Accordingly, staff proposes revisions to Section 23.04.L to update the notification and service interruption timelines. Initial notices will be sent further in advance to provide customers more time to schedule testing and complete any necessary repairs. This section was further expanded to add the use of hand-delivered notices as a final measure to achieve site compliance before a service interruption occurs. The revisions further clarify the District’s ability to shut off services to the site to expedite device testing while preventing safety hazards (e.g., shutting off domestic water in lieu of a fire system service that is out of compliance). Finally, this update adds clarification on the ability to interrupt service for tampering, modifying, or bypassing a backflow prevention assembly in accordance with the CCCPH requirements. The CCCPH added new requirements that all organizations certifying backflow testers and specialists be accredited through the American National Standards Institute (ANSI) in accordance with ISO/IEC 17024 and approved by the SWRCB by July 1, 2027. After July 1, 2027, testers and specialists not certified through an accredited and approved certifying body will no longer meet the certification requirements for testing within the State. Staff recommends updates to Section 23.04.O.B to reflect these new certification standards. In addition to the CCCPH-related changes, staff proposes the following updates that are unrelated to the CCCPH: • Lead-Free Device Requirements: Pursuant to Assembly Bill 1953, which requires the use of lead-free devices for drinking water system components, staff recommends updates to Sections 23.04.E and 23.04.H. These updates would require the replacement of lead containing devices at the time of relocation or repair where lead-free repair parts are no longer available. •Tester List and Portal Enhancements: Section 23.04.O is revised to reflect updates to the District’s process for addition or inclusion on the approved tester list. Testers are no longer required to renew eligibility annually, as the new online tester portal tracks testing credentials and gauge calibrations. The District has also implemented the use of a Testers Code of Conduct which must be signed by each tester prior to being added to the approved testers list. The Testers Code of Conduct outlines District expectations, installation requirements, regulatory and reporting requirements, and acts that would cause a tester to be removed from the approved testers list. FISCAL IMPACT: Joe Beachem, Chief Financial Officer This action is to approve the updates to the District’s Code of Ordinances and has no fiscal impact as it simply updates the code. However, it should be noted that to comply with the new regulatory requirements outlined in the Cross-Connection Control Policy Handbook, staff are currently recruiting two (2) full- time employees to support both compliance efforts and program expansion. These positions have been accounted for in the FY 2026 budget. STRATEGIC GOAL: These updates support the District’s Strategic Plan Objective, Potable Water Compliance Rate, which aims to ensure that 100% of all health-related drinking water standards are met quarterly and annually. LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B – Ordinance No. 600 Exhibit 1 – Section 23 Strike-through Exhibit 2 – Section 23 Proposed ATTACHMENT A SUBJECT/PROJECT: Adopt Ordinance No. 600 to Approve the Proposed Changes to Section 23 of the District’s Code of Ordinances, Non- Responsibility of District COMMITTEE ACTION: NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for board approval. This report will be sent to the Board as a committee approved item or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full board. 1 ORDINANCE NO. 600 AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AMENDING SECTION 23 OF THE DISTRICT’S CODE OF ORDINANCES BE IT ORDAINED by the Board of Directors of the Otay Water District that Section 23, Non-Responsibility of District, of the District’s Code of Ordinances shall be amended as set forth in Exhibit 1 to this ordinance. NOW, THEREFORE, BE IT RESOLVED that the amended Section 23, as presented in Exhibit 2, shall become effective immediately. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting duly held this 2nd day of July 2025, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ President ATTEST: __________________________ District Secretary Attachment B 23-1 SECTION 23 NON-RESPONSIBILITY OF DISTRICT 23.01 INTERRUPTIONS OF WATER SERVICE District does not guarantee continuous delivery of water on demand. From time to time, it may be necessary for the District to shut off the flow of water in any of its water systems. Except in emergencies, such stoppages will not be made without prior notice to the customers involved. The District shall not assume any responsibility for loss or damages which may occur due to interruption of water service. 23.02 PRIVATELY-OWNED WATER LINES The District assumes no responsibility for the delivery of water through privately-owned pipelines or systems, nor shall it assume any responsibility for damages resulting from the operation of any such system even though water may be received from a district water distribution system. 23.03 WATER PRESSURE REGULATION A.Customer Responsibility. The District shall assume no responsibility for water pressure regulation within a customer's service area. The customer shall be responsible for providing adequate safeguard measures for the customer's water system wherever pressure regulation is necessary. B.Requirements for Installation in New Construction.Customers making application for water service fornew construction for residential, commercial orindustrial use shall be required to install an appropriate pressure regulation device for such service. 23.04 CROSS-CONNECTIONS AND BACKFLOW DEVICES State Regulations for Cross-Connections The California State Water Resources Control Board has issued regulations related to cross-connections, outlined in the Cross-Connection Control Policy Handbook (CCCPH), for the purpose of safeguarding drinking water supplies by preventing backflow into public water systems. It is unlawful for any person, firm, or corporation at any time to make or maintain, or cause to be made or main- tained, temporarily or permanently, for any period of time whatsoever, any cross-connection between plumbing pipes or water fixtures being served with water by the District water department and any other source of water supply; or to main- tain any sanitary fixtures or other appurtenances or fixtures Exhibit 1 23-2 which, by reason of their construction, may cause or allow backflow of water or other substances into the water supply system of the District and/or the service of water pipes or fixtures of any consumer of the District. A. Definitions: For a complete listing, see the California State Water Resources Control Board’s Cross-Connection Control Policy Handbook. 1. Air-Gap Separation or “AG”(AG): The term "air-gap separation" means a physical vertical separation of at least two (2) times the effective pipe diameter between the free-flowing discharge end of a potable water supply pipeline and the flood level of an open or non-pressurized receiving break between a supply pipe and a receiving vessel. The air-gap shall be at least double the diameter of the supply pipe measured vertically above the top rim of the vessel, and in no case less than one (1) inch. 2. Approved Backflow Prevention Device: The term "approved backflow prevention device" shall mean devices which have passed laboratory and field evaluation tests performed by a recognized testing organization which has demonstrated their competency to perform such test to the California Department of Health ServicesState Water Resources Control Board and the Otay Water District. 3. AWWA Standard: The term "AWWA Standard" means an official standard developed and approved by the American Water Works Association (AWWA). 4. Backflow: The term "backflow" shall means an undesired or unintended reversal of flow of water and/or other liquids, gases, or other substances into a public water system’s distribution system or approved water supply. a flow condition, caused by a differential in pressure that causes the flow of water or other liquids, gases, mixtures or substances into the distributing pipes of a potable supply of water from any source or sources other than an approved water supply source. Back- siphonage is one cause of backflow. Back pressure is the other cause. 4.5. Backflow Prevention Assembly orf “BPA”: The term “backflow prevention assembly” means a mechanical assembly designed and constructed to prevent backflow, such that while in-line it can be maintained and its ability to prevent backflow, as designed, can be field tested, inspected and evaluated. Formatted: List Paragraph, Line spacing: single, No bulletsor numbering Formatted: Underline 23-3 6. Cross-Connection: The term "cross-connection" as used in this Ordinance means any unprotected actual or potential connection or structural arrangement between a public water system, including a piping system connected to the public water system and located on the premises of a water user or available to the water user, and any source or distribution system containing liquid, gas, or other substances not from an approved water supply. between a potable water system used to supply water for drinking purposes and any source or system containing unapproved water or a substance that is not or can- not be approved as safe, wholesome, and potable. Bypass arrangements, jumper connections, removable sections, swivel or changeover devices, or other devices through which backflow could occur, shall be considered to be cross-connections. 5.7. Cross-Connection Control Specialist: A “cross-connection control specialist” means a person who is certified as a cross-connection control specialist. 8. Double Check Valve Backflow Prevention Assembly or “DC”: The term "double check valve backflow prevention assembly" means an assembly consisting of at least two independently- acting internally-loaded check valves, includingwith tightly closing shut-off valves, located at on each end side of the check valve assembly (upstream and downstream of the two check valves) and fitted with test cocks that enable accurate field testing of the assembly. available for testing the water tightness of each check valve. 6.9. Hazard Assessment: The term “hazard assessment” means an evaluation of a user premises designed to evaluate the types and degrees of hazard at a user’s premises. 7.10. Reduced Pressure Principle Backflow Prevention Assembly or “Device (RP)”: The term "reduced pressure principle backflow prevention deviceassembly" means an assembly device incorporatingwith two independently acting internally-loaded or more check valves, with a hydraulically and an automatically operating mechanically independent differential-pressure relief valve located between the two check valves and below the upstream check valve. The assembly shall have , a tightly closing shut-off valves Formatted: List Paragraph, Line spacing: single, No bulletsor numbering Formatted: Underline Formatted: List Paragraph, No bullets or numbering Formatted: Underline Formatted: Indent: Hanging: 0.38", Tab stops: 1", Left 23-4 located upstream and downstream of on each side of the two check valves, and assembly, and equipped with necessary test cocks to enable accurate field for testing of the assembly. 8. Reduced Pressure Principle Detectionor Backflow Prevention Assembly or (“RPDA)”: Tthe term “reduced pressure principle detector backflow prevention assembly” means a reduced pressure principle backflow prevention assembly that includes a bypass with a water meter and reduced pressure principle backflow prevention assembly, with the bypass’s water meter accurately registering flow rates up to two gallons per minute and visually showing a registration for all rates of flow. Same as RP except as approved for fire services. 11. 9. 10. User’s Service Connection: The term "user’s service connection" means either the point where a water user’s piping is connected to a water system or the point in a water system where the approved water supply can be protected from backflow using an air- gap or backflow prevention assembly. refers to the point of connection of a user's piping to the Otay Water District facilities. 12. 13. User Supervisor: The term “user supervisor” means a person designated by a water user to oversee a water use site and responsible for the avoidance of cross- connections. 11. B. General Provisions 1. Unprotected cross-connections with the public water supply are prohibited. 2. Whenever backflow protection has been found necessary, the District will require the water user to install an approved backflow prevention device, by and at his/her expense, for continued services or before a new service will be granted. 3. Wherever backflow protection has been found necessary on a water supply line entering a water user's premises, then any and all water supply Formatted: Indent: Hanging: 0.38", Tab stops: 1", Left Formatted: Indent: Left: 1", No bullets or numbering Formatted: Indent: Left: 1", No bullets or numbering Formatted: Indent: Hanging: 0.38" Formatted: No underline Formatted: No underline Formatted: Underline Formatted: Indent: Left: 1", No bullets or numbering 23-5 lines from the District's mains entering such premises, buildings, or structures shall be protected by an approved backflow prevention device. The type of device to be installed will be in accordance with the requirements of this Ordinance and all devices will be appropriate for the highest level of hazard found on the premises. C. Where Protection is Required 1. Each service connection from the District water system for supplying water to premises having an auxiliary water supply shall be protected against backflow of water from the premises into the public water system. 2. Each service connection from the District water system for supplying water to any premises on which any substance is handled in such fashion as may allow its entry into the water system shall be protected against backflow of the water from the premises into the public system. This includes commercial accounts, fire service accounts, irrigation accounts, multi-family dwellings, multi-story buildings, complex piping, and locations where the handling of process waters and waters originating from the District water system may be subjected to deterioration in sanitary quality. D. Type of Protection Required 1. The type of protection that shall be provided to prevent backflow into the approved water supply shall be commensurate to the degree of hazard that exists on the consumer's premises. The type of protective device that may be required (listed in increasing levels of protection) includes: double check valve backflow prevention assemblies, reduced pressure principle backflow prevention assemblies (RP), and an air-gap separation (AG). The water user may choose a higher level of protection than that required by the District. The minimum types of backflow protection required to protect the approved water supply at the user's water connection to premises 23-6 with varying degrees of hazard are given in Appendix D of the Cross-Connection Control Policy Handbook. Situations which are not covered in Appendix D shall be evaluated on a case-by-case basis, and the appropriate backflow protection shall be determined by the District. E. Approved Backflow Prevention Devices 1. Only lead-free backflow prevention assemblies which have been approved by the District shall be acceptable for installation by a water user connected to the District's potable water system. 2. 2. Where The repairs on existing lead containing backflow prevention assemblies are required, replacement parts must be lead-free. Where lead free replacement parts are not available, the entire backflow prevention assembly must be replaced with a lead-free assembly.District will provide to any affected customer, upon their request, a list of approved backflow prevention devices. 3. The District will provide to any affected customer, upon their request, a list of approved backflow prevention devices. F. Backflow Prevention Device Installation 1. Backflow prevention devices shall be installed in athe manner prescribed in Article 3 of the Cross- Connection Control Policy Handbook. Location of the devices should be as close as practical to the user's point of service connection. The District shall have the final authority in determining the required location of a backflow prevention device. a. Air-gap Separation (AG) - The air-gap separation shall be located on the user's side of, and as close to, the service connection as is practical. All piping from the service connection to the receiving tank shall be above grade and be entirely visible. No water use shall be Formatted: Font: (Default) Courier New, 12 pt Formatted: Font: (Default) Courier New, 12 pt Formatted: Indent: Left: 1.25", First line: 0" 23-7 provided from any point between the service connection and the air-gap separa- tion. The water inlet piping shall terminate a distance of at least two (2) pipe diameters of the supply inlet, but in no case less than one inch above the overflow rim of the receiving tank. b. Reduced Pressure Principle Backflow Prevention Device (RP) - The approved reduced pressure principle backflow prevention device shall be installed on the user's side of the service connection at a distance consistent with the District's Standard Drawings and Specifications. The device shall be installed a minimum of twelve inches (12") but not more than twenty-four inches (24") above grade, measured from the bottom of the relief valve and with a minimum of twelve inches (12") side clearance, and twenty-four inches (24”) of clearance on the side of the assembly containing the test cocks. The device shall be installed so that it is readily accessible for maintenance and testing. Water supplied from any point between the service connection and the RP device shall be protected in a manner approved by the District. Additionally, materials and installation shall at all times conform to water agency standards which can be found at www.sdwas.org. G. Backflow Prevention Device Testing and Maintenance 1. The owners of any premises on which, or on account of which, backflow prevention devices are installed shall have the devices tested by a person who has demonstrated their competency in testing of these devices to the District and has been approved by the District. Backflow prevention devices must be tested at least annually and immediately after installation, relocation, or repair. The District may require a more frequent testing schedule if it is determined to be necessary. No device shall be 23-8 placed back in service unless it is functioning as required. An online testing result submission, through in a form acceptable to the District’s backflow compliance program, shall be made within five (5) working days each time a device is tested, relocated, or repaired. Backflow preventionThese devices shall be serviced, overhauled, or replaced whenever they are found to be defective or observed to not be in proper working order. and aAll costs of testing, repair, and maintenance shall be borne by the water user. 2. Initial testing after installation and subse- quent retesting shall be performed using the UCSC Manual of Cross-Connection Control 10th edition (or current) approved testing proceduresat all times conform to water agency standards as outlined in www.sdwas.org. 3. The District will supply affected water users with a list of persons acceptable to the District to test backflow prevention devices. The District will notify affected customers by mail when annual testing of a device is needed and will also supply users with the necessary testing information to be submitted each time a device is tested or repaired. 4. Existing double check valves and pressure vacuum breakers on median strip irrigation areas which function adequately may remain in place, however, as the District no longer recognizes such devices to be commensurate with the degree of potential hazard, failures of these devices will necessitate their replacement with a reduced pressure principal backflow prevention device (RP). H. Backflow Prevention Device Removal 1. Written approval must be obtained from the District before a backflow prevention device is removed, relocated, repaired or replaced. a. Removal: The use of a device may be discontinued and device removed from Formatted: Superscript 23-9 service upon presentation of sufficient evidence to the District to verify that a hazard no longer exists or is not likely to be created in the future. Sites with wells are required to keep a backflow prevention assembly in place until which time a well deconstruction permit is completed with the County Department of Environment Health and Quality and a well deconstruction inspection report can be provided. b. Relocation: A device may be relocated following confirmation by the District that the device is lead free and that the relocation will continue to provide the required protection and satisfy installation requirements. Any lead containing devices will require a complete replacement in lieu of relocation. A retest of the backflow prevention assembly will be required following the relocation of the device. c. Repair: A device may be removed for repair, provided the water use is either discontinued until repair is completed and the device is returned to service, or the service connection is equipped with other backflow protection approved by the District. A retest will be required following the repair of the device. d. Replacement: A device may be removed and replaced provided the water use is discontinued until the replacement device is installed and tested. All replacement devices must be approved by the District and must be commensurate with the degree of hazard involved. I. User Supervisor 1. At each premises where it is necessary, in the opinion of the District, a user supervisor shall be designated by and at the expense of the water 23-10 user. This user supervisor shall be responsible for the monitoring of theinternal backflow prevention devices and for avoidance of cross- connections within the premises. In the event of contamination or pollution of the drinking water system due to an on- premises cross- connection, on the premises, the District shall be promptly notified as soon as possible but no later than 24 hours after the observance of the unprotected cross connection by the user supervisor so appropriate measures may be taken to overcome the contamination. 2. The water user shall inform the District of the user supervisor's required information, including certification, a current contact phone number, and current email address. Contact information shall be provided on an annual basis or whenever a change occurs. 3. The user supervisor is responsible for the avoidance of cross-connections during the installation, operation and maintenance of the water user’s pipelines and equipment. The user supervisor must be trained on the fluids used and backflow protection for the premises and must inform the District of changes in piping. 1.4. The user supervisor must meet the qualification and training requirements described in the District’s cross-connection control plan. J. Administrative Procedures Water System SurveyHazard Assessments 1. The District shall review all requests for new services to determine if backflow protection is needed. Plans and specifications must be submitted to the District upon request for review of possible cross-connection hazards as a condition of service for new service connections. If it is determined that a backflow prevention device is necessary to protect the public water system, the required Formatted: Indent: Left: 1.38", No bullets or numbering Formatted: Indent: Left: 1.38", No bullets or numbering Formatted: List Paragraph, No bullets or numbering 23-11 device must be installed before service will be activated. An initial hazard assessment of each premises must be completed before service is provided to the site. 2. The District may require an on premise inspection hazard assessment to evaluate cross- connection hazards. The District will transmit a written notice requesting an inspection appointment to each affected water user. Any customer who cannot or will not allow an on premise inspection of their piping system shall be required to install a reduced pressure principle the backflow prevention device assembly in accordance with the CCCPH Appendix DDistrict considers necessary. 3. The District may, at its discretion, require a periodic re-assessmentinspection for cross- connection hazards of any premises to which it serves water. Re-assessments will occur whenever there is a usage type change at a site, when an ownership change occurs(excluding single family residential sites), when the District believes that activities on the site present a higher level of hazard than when previously assessed, if backflow from a user’s premises occurs, and periodically on the timelines identified in the District’s cross connection control plan. The District will transmit a written notice requesting an inspection appointment to each affected water user. Any customer who cannot or will not allow an on- premise inspection of their piping system shall be required to install a reduced pressure principle the backflow prevention deviceassembly in accordance with the theCCCPH Appendlix D. District considers necessary. K. Customer Notification - Device Installation and/or Repair (Corrective Action) 1. The District will notify the water user of the survey findings, listing corrective action to be taken if required. A period of 30 days will be given to complete all corrective action 23-12 required including installation of backflow prevention devices. 2. A second notice will be sent to each water user who does not take the required corrective action prescribed in the first notice within the 30- day period allowed. The second notice will give the water user a 14- day period to take the required corrective action and will generate the assessment of a fee in accordance with Appendix A of this Oordinance. If no action is taken within the 14- day period, the District may terminate water service to the affected water user until the required corrective actions are taken. 3. A third and final notice will be sent to each water user who fails to take the requisite corrective action detailed in the second notice within the 14- day period allowed. The third notice will indicate the date of service termination and will generate the assessment of a fee in accordance with Appendix A of this Oordinance. 4. Only passing test results from a certified and District-approved tester/installer received electronically through the District’s backflow compliance tester’s SwiftComply tester’s portal within the allotted time period will constitute compliance with the above requirements. L. Customer Notification - Testing 1. The District will notify each affected water user when it is time for the backflow preven- tion deviceassembly installed on their service connections to be tested. This written notice shall give the water user 650 days to have the device tested and will supply the water user with the necessary testing information to be used when submitting testing results to the District. 23-13 2. A second notice shall be sent to each water user who does not have their backflow preven- tion device tested by the response due date prescribed in the first noticeas prescribed in the first notice within the 60-day period allowed. The second notice will give the water user an additional 14 days to have their backflow prevention device tested. and will generate the assessment of a fee in accordance with Appendix A of this Ordinance. If no action is taken within the 14-day period, the District may terminate water service to the affected water user until the subject device is tested. 3. A third and final notice will be sent to each water user who fails to have their backflow prevention device(s) tested as required in the second notice within the 14-day period allowed. The third notice will indicate the date of service termination, (10 days after the receipt of the notice), and will generate the assessment of a fee in accordance with Appendix A of this oOrdinance. 4. Α hand delivered notice may be provided to the property, where possible, to each water user who fails to have their backflow prevention device(s) tested as required in the third notice within the 10-working day period allowed. The hand delivered notice will indicate the date of service termination, typically with 48-hours, and will generate the assessment of a fee in accordance with Appendix Α of this Ordinance. The District would make the final determination if a hand delivered notice will be provided as a final measure to achieve backflow testing compliance prior to service interruption. 45. Submittal of passing test results by a District approved tester, through the District’s backflow compliance tester’s portal, within the allotted time period will constitute compliance with the above requirements. M. Water Service Termination 23-14 A. General When the District encounters water uses that rep- resent a clear and immediate hazard to the potable water supply that cannot be immediately abated, the District shall institute the procedure for discontinuing the District water service. A reconnection fee will be assessed in accordance with Appendix A of this Ordinance. Where a disconnection of District water service is required, the District will make the final determination of which, if not all, services entering a site will be subjected to disconnection. B. Basis for Termination Conditions or water uses that create a basis for water service termination shall include, but are not limited to the following items: 1. Refusal to install a required backflow pre- vention device; 2. Refusal to test a backflow prevention device; 3. Refusal to repair a faulty backflow prevention device; 4. Refusal to replace a faulty backflow prevention device; 5. Observed bypassing or alteration of a backflow prevention device; 65. Direct or indirect connection between the public water system and a sewer line, including treated sewage; 76. Unprotected direct or indirect connection between the public water system and a system or equipment containing pollutants or contaminants; 87. Unprotected direct or indirect connection between the public water system and an auxil- iary water system; and/or 23-15 98. Any situation which presents an immediate health hazard to the public water system. Additional remedies for failure to comply with cross- connection requirements are referenced in Section 72 of the Code of Ordinances and may be prosecuted as set forth in Section 73.01 of this Code. N. Water Service Termination Procedures The District has absolute discretion to determine the corrective action required and referenced in Sections 72 and 73 of this Code. 1. For conditions 1, 2, 3, or 4, the District will terminate service to a customer's premise after two (2) written notices have been sent specifying the corrective action needed and the time period in which it must be done. If no action is taken within the allowed time period water service may be terminated. 2. For conditions 4, 5, 6, 7, 8, or 89, the District will take the following steps: a. Make reasonable effort to advise the water user of intent to terminate water service; b. Terminate water supply and lock service valve. The water service will remain inactive until corrections of violations hasve been approved by the District. O. Requirements for addition to or renewal on the Otay Water District list of approved backflow prevention device testers A. Each applicant (tester) desiring initial addition to or annual renewal on the District’s List of Approved Backflow Prevention Device Testers shall submit a fee in accordance with Appendix A of this Ordinance. Fees must be made in an acceptable form of payment to the District. Along with the fee, a current mailing address, email address, and phone number, and signed copy of the backflow prevention assembly tester’s code of conduct 23-16 must be furnished. Those applicants not meeting all qualifications specified herein will have current fees returned. B. Applicants shall hold a valid and current certification from the American Water Works Association (AWWA) California Nevada Section, the American Backflow Prevention Association (ABPA), or the American Society of Sanitary Engineering (ASSE). After July, 1 2027, acceptable organizations must be accredited by the , American National Standards Institute (ANSI) in accordance with ISO/IEC 17024 and be recognized by the State Water Resources Control Board as a certifying organization. Testing shall be performed using the most current test procedures from the University of Southern California foundation for Cross-Connection Control and Hydraulic Reasearch Test Procedures. (current edition) or from a certi- fication program recognized by the San Diego County Health Department. Evidence of said certification shall be furnished to the District at the time of application, at the time of renewal, and at any time the District requests verification. Certification alone does not constitute District approval. C. Each applicant shall furnish evidence to show the availability of the necessary tools and equipment to properly test and/or repair such devices. Test kits shall be recalibrated annually and evidence of this shall also be electronically submitted and maintained by the tester in the District’s backflow compliance program provided with both the initial application and subsequent renewals. D. The tester applicants must agree to comply with the Otay Water District’s backflow prevention assembly tester’s code of conduct. Each new applicant must provide a signed a copy of the tester’s code of conduct prior to being added to the District's List of Approved Backflow Prevention Device Testers. Testers currently listed must sign a new tester’s code of conduct on a four-year interval, as substantive changes 23-17 occur, and/or as determined by the District. Testers who fail to provide a signed tester’s code of conduct form will be removed from the list and will have to apply as a new tester during the next open enrollment period. shall be solely responsible for the competency and accuracy of all tests and reports prepared and submitted to the District. E. The tester shall be solely responsible for the competency and accuracy of all tests and reports prepared and submitted to the District. The District reserves the right at any time to require testers to perform repeat testing in the presence of a District staff member should the submitted results not appear to be accurate or if the device shows signs of requiring repairs at the time that passing results are received. F. Any tester found to be falsifying testing results or modifying backflow prevention assemblies in a manner other than how approval was received from either the University of Southern California Foundation for Cross- Connection Control and Hydraulic Research or ASSE International, will be removed from the District's List of Approved Backflow Prevention Device Testers for a minimum of three years and will be reported to the tester’s certifying organization. G. The list of approved testers will be furnished upon request to any District customer requiring such service. The list of approved testers will be updated on a bi-annual basis. H. The testers listed will remain listed for as long as their credentials, gauge calibrations, and testers code of conduct all remain current in the District’s backflow compliance program. Testers are required to update their credentials and gauge calibrations through the backflow compliance program’s electronic testers portal. Testers that do not update their credentials will not be able to submit 23-18 testing results and will be removed from the list after 45 days of being overdue for a credential update. Any tester that falls off of the list will need to reapply as a new tester at the next open enrollment period and will not be added back to the list until the next bi-annual update occurs. I. The District reserves the authority to revoke, suspend, or remove any tester from the list of approved testers for improper conduct, testing, repairs, and/or reporting at any time. Current District staff members and their associated companies cannot be added to the list or perform testing services for backflow prevention assemblies that are tracked in the District’s backflow compliance program. The list of approved testers will be furnished upon request to any District customer requiring such service. The testers listed will remain listed for a period of one year at which time they are subject to application for renewal. At the beginning of each year a grace period not to exceed ninety (90) days will be allowed for this process. Failure to renew within the grace period will constitute removal from the list. The District reserves the authority to revoke, suspend, or remove any tester from the list of authorized testers for improper conduct, testing, repairs, and/or reporting. FEES A. A second notice for required corrective action will result in a service fee, per backflow device as outlined in Appendix A. B. A third notice (termination of service notice) will result in a service fee per backflow device followed by the assessment of a reconnection fee if such action is required as outlined in Appendix A. Formatted: Numbered + Level: 1 + Numbering Style: I, II,III, … + Start at: 1 + Alignment: Left + Aligned at: 1" +Indent at: 1.5" 23-19 C. A reconnection fee per service is required for service to be resumed as outlined in Appendix A. D. Applicants for addition to the list of approved backflow prevention device testers in the Otay Water District will submit an initial filing fee and an annual renewal fee, as outlined in Appendix A. 23.05 WATER SERVICE FOR STEAM BOILERS Customers using District water to supply steam boilers are required to provide adequate storage of water for boiler use for a minimum period of 12 hours. 23.06 ELECTRICAL GROUND CONNECTIONS The connection of electrical ground wire to water pipes is prohibited. The District shall assume no responsibility for any loss or damage resulting from such a connection. 23-1 SECTION 23 NON-RESPONSIBILITY OF DISTRICT 23.01 INTERRUPTIONS OF WATER SERVICE District does not guarantee continuous delivery of water on demand. From time to time, it may be necessary for the District to shut off the flow of water in any of its water systems. Except in emergencies, such stoppages will not be made without prior notice to the customers involved. The District shall not assume any responsibility for loss or damages which may occur due to interruption of water service. 23.02 PRIVATELY-OWNED WATER LINES The District assumes no responsibility for the delivery of water through privately-owned pipelines or systems, nor shall it assume any responsibility for damages resulting from the operation of any such system even though water may be received from a district water distribution system. 23.03 WATER PRESSURE REGULATION A.Customer Responsibility. The District shall assume no responsibility for water pressure regulation within a customer's service area. The customer shall be responsible for providing adequate safeguard measures for the customer's water system wherever pressure regulation is necessary. B.Requirements for Installation in New Construction. Customers making application for water service for new construction for residential, commercial or industrial use shall be required to install an appropriate pressure regulation device for such service. 23.04 CROSS-CONNECTIONS AND BACKFLOW DEVICES State Regulations for Cross-Connections The California State Water Resources Control Board has issued regulations related to cross-connections, outlined in the Cross-Connection Control Policy Handbook (CCCPH), for the purpose of safeguarding drinking water supplies by preventing backflow into public water systems. It is unlawful for any person, firm, or corporation at any time to make or maintain, or cause to be made or main- tained, temporarily or permanently, for any period of time whatsoever, any cross-connection between plumbing pipes or water fixtures being served with water by the District water department and any other source of water supply; or to main- tain any sanitary fixtures or other appurtenances or fixtures Exhibit 2 23-2 which, by reason of their construction, may cause or allow backflow of water or other substances into the water supply system of the District and/or the service of water pipes or fixtures of any consumer of the District. A. Definitions: For a complete listing, see the California State Water Resources Control Board’s Cross-Connection Control Policy Handbook. 1. Air-Gap Separation or “AG”: The term "air-gap separation" means a physical vertical separation of at least two (2) times the effective pipe diameter between the free-flowing discharge end of a potable water supply pipeline and the flood level of an open or non-pressurized receiving vessel, and in no case less than one (1) inch. 2. Approved Backflow Prevention Device: The term "approved backflow prevention device" shall mean devices which have passed laboratory and field evaluation tests performed by a recognized testing organization which has demonstrated their competency to perform such test to the State Water Resources Control Board and the Otay Water District. 3. AWWA Standard: The term "AWWA Standard" means an official standard developed and approved by the American Water Works Association (AWWA). 4. Backflow: The term "backflow" means an undesired or unintended reversal of flow of water and/or other liquids, gases, or other substances into a public water system’s distribution system or approved water supply. 5. Backflow Prevention Assembly or “BPA”: The term “backflow prevention assembly” means a mechanical assembly designed and constructed to prevent backflow, such that while in-line it can be maintained and its ability to prevent backflow, as designed, can be field tested, inspected and evaluated. 6. Cross-Connection: The term "cross-connection" means any actual or potential connection or structural arrangement between a public water system, including a piping system connected to the public water system and located on the premises of a water user or available to the water user, and any source or distribution system containing liquid, gas, or other substances not from an approved water supply. 23-3 7. Cross-Connection Control Specialist: A “cross- connection control specialist” means a person who is certified as a cross-connection control specialist. 8. Double Check Valve Backflow Prevention Assembly or “DC”: The term "double check valve backflow prevention assembly" means an assembly consisting of two independently-acting internally-loaded check valves, with tightly closing shut-off valves located at each end of the assembly (upstream and downstream of the two check valves) and fitted with test cocks that enable accurate field testing of the assembly. 9. Hazard Assessment: The term “hazard assessment” means an evaluation of a user premises designed to evaluate the types and degrees of hazard at a user’s premises. 10. Reduced Pressure Principle Backflow Prevention Assembly or “RP”: The term "reduced pressure principle backflow prevention assembly" means an assembly with two independently acting internally- loaded check valves, with a hydraulically operating mechanically independent differential-pressure relief valve located between the check valves and below the upstream check valve. The assembly shall have shut-off valves located upstream and downstream of the two check valves, and test cocks to enable accurate field testing of the assembly. 11. Reduced Pressure Principle Detector Backflow Prevention Assembly or “RPDA”: The term “reduced pressure principle detector backflow prevention assembly” means a reduced pressure principle backflow prevention assembly that includes a bypass with a water meter and reduced pressure principle backflow prevention assembly, with the bypass’ water meter accurately registering flow rates up to two gallons per minute and visually showing a registration for all rates of flow. 12. User’s Service Connection: The term "user’s service connection" means either the point where a water user’s piping is connected to a water system or the point in a water system where the approved water supply can be protected from backflow using an air- gap or backflow prevention assembly. 23-4 13. User Supervisor: The term “user supervisor” means a person designated by a water user to oversee a water use site and responsible for the avoidance of cross- connections. B. General Provisions 1. Unprotected cross-connections with the public water supply are prohibited. 2. Whenever backflow protection has been found necessary, the District will require the water user to install an approved backflow prevention device, by and at his/her expense, for continued services or before a new service will be granted. 3. Wherever backflow protection has been found necessary on a water supply line entering a water user's premises, then all water supply lines from the District's mains entering such premises, buildings, or structures shall be protected by an approved backflow prevention device. The type of device to be installed will be in accordance with the requirements of this Ordinance and all devices will be appropriate for the highest level of hazard found on the premises. C. Where Protection is Required 1. Each service connection from the District water system for supplying water to premises having an auxiliary water supply shall be protected against backflow of water from the premises into the public water system. 2. Each service connection from the District water system for supplying water to any premises on which any substance is handled in such fashion as may allow its entry into the water system shall be protected against backflow of the water from the premises into the public system. This includes commercial accounts, fire service accounts, irrigation accounts, multi-family dwellings, multi-story buildings, complex piping, and locations where the handling of process waters and waters originating from the District 23-5 water system may be subjected to deterioration in sanitary quality. D. Type of Protection Required 1. The type of protection that shall be provided to prevent backflow into the approved water supply shall be commensurate to the degree of hazard that exists on the consumer's premises. The type of protective device that may be required (listed in increasing levels of protection) includes: double check valve backflow prevention assemblies, reduced pressure principle backflow prevention assemblies (RP), and an air-gap separation (AG). The water user may choose a higher level of protection than that required by the District. The minimum types of backflow protection required to protect the approved water supply at the user's water connection to premises with varying degrees of hazard are given in Appendix D of the Cross-Connection Control Policy Handbook. Situations which are not covered in Appendix D shall be evaluated on a case-by-case basis, and the appropriate backflow protection shall be determined by the District. E. Approved Backflow Prevention Devices 1. Only lead-free backflow prevention assemblies which have been approved by the District shall be acceptable for installation by a water user connected to the District's potable water system. 2. Where repairs on existing lead containing backflow prevention assemblies are required, replacement parts must be lead-free. Where lead free replacement parts are not available, the entire backflow prevention assembly must be replaced with a lead-free assembly. 3. The District will provide to any affected customer, upon their request, a list of approved backflow prevention devices. F. Backflow Prevention Device Installation 23-6 1. Backflow prevention devices shall be installed in the manner prescribed in Article 3 of the Cross- Connection Control Policy Handbook. Location of the devices should be as close as practical to the user's point of service connection. The District shall have the final authority in determining the required location of a backflow prevention device. a. Air-gap Separation (AG) - The air-gap separation shall be located on the user's side of, and as close to, the service connection as is practical. All piping from the service connection to the receiving tank shall be above grade and be entirely visible. No water use shall be provided from any point between the service connection and the air-gap separa- tion. The water inlet piping shall terminate a distance of at least two (2) pipe diameters of the supply inlet, but in no case less than one inch above the overflow rim of the receiving tank. b. Reduced Pressure Principle Backflow Prevention Device (RP) - The approved reduced pressure principle backflow prevention device shall be installed on the user's side of the service connection at a distance consistent with the District's Standard Drawings and Specifications. The device shall be installed a minimum of twelve inches (12") but not more than twenty-four inches (24") above grade, measured from the bottom of the relief valve and with a minimum of twelve inches (12") side clearance, and twenty-four inches (24”) of clearance on the side of the assembly containing the test cocks. The device shall be installed so that it is readily accessible for maintenance and testing. Water supplied from any point between the service connection and the RP device shall be protected in a manner approved by the District. Additionally, materials and installation shall conform to water agency 23-7 standards which can be found at www.sdwas.org. G. Backflow Prevention Device Testing and Maintenance 1. The owners of any premises on which, or on account of which, backflow prevention devices are installed shall have the devices tested by a person who has demonstrated their competency in testing of these devices to the District and has been approved by the District. Backflow prevention devices must be tested at least annually and immediately after installation, relocation, or repair. The District may require a more frequent testing schedule if it is determined to be necessary. No device shall be placed back in service unless it is functioning as required. An online testing result submission, through the District’s backflow compliance program, shall be made within five (5) working days each time a device is tested, relocated, or repaired. Backflow prevention devices shall be serviced, overhauled, or replaced whenever they are found to be defective or observed to not be in proper working order. All costs of testing, repair, and maintenance shall be borne by the water user. 2. Initial testing after installation and subse- quent retesting shall be performed using the USC Manual of Cross-Connection Control 10th edition (or current) approved testing procedures. 3. The District will supply affected water users with a list of persons acceptable to the District to test backflow prevention devices. The District will notify affected customers by mail when annual testing of a device is needed and will also supply users with the necessary testing information to be submitted each time a device is tested or repaired. H. Backflow Prevention Device Removal 1. Written approval must be obtained from the District before a backflow prevention device is removed, relocated, repaired or replaced. 23-8 a. Removal: The use of a device may be discontinued and device removed from service upon presentation of sufficient evidence to the District to verify that a hazard no longer exists or is not likely to be created in the future. Sites with wells are required to keep a backflow prevention assembly in place until a well deconstruction permit is completed with the County Department of Environment Health and Quality and a well deconstruction inspection report can be provided. b. Relocation: A device may be relocated following confirmation by the District that the device is lead free and that the relocation will continue to provide the required protection and satisfy installation requirements. Any lead containing devices will require a complete replacement in lieu of relocation. A retest of the backflow prevention assembly will be required following the relocation. c. Repair: A device may be removed for repair, provided the water use is either discontinued until repair is completed and the device is returned to service, or the service connection is equipped with other backflow protection approved by the District. A retest will be required following the repair of the device. d. Replacement: A device may be removed and replaced provided the water use is discontinued until the replacement device is installed and tested. All replacement devices must be approved by the District and must be commensurate with the degree of hazard involved. I. User Supervisor 1. At premises where it is necessary, in the opinion of the District, a user supervisor shall 23-9 be designated by and at the expense of the water user. This user supervisor shall be responsible for the monitoring of internal backflow prevention devices and for avoidance of cross- connections within the premises. In the event of contamination or pollution of the drinking water system due to an on-premise cross- connection, the District shall be notified as soon as possible but no later than 24 hours after the observance of the unprotected cross connection by the user supervisor so appropriate measures may be taken to overcome the contamination. 2. The water user shall inform the District of the user supervisor's required information, including certification, a current contact phone number, and current email address. Contact information shall be provided on an annual basis or whenever a change occurs. 3. The user supervisor is responsible for the avoidance of cross-connections during the installation, operation and maintenance of the water user’s pipelines and equipment. The user supervisor must be trained on the fluids used and backflow protection for the premises and must inform the District of changes in piping. 4. The user supervisor must meet the qualification and training requirements described in the District’s cross-connection control plan. J. Administrative Procedures Hazard Assessments 1. The District shall review all requests for new services to determine if backflow protection is needed. Plans and specifications must be submitted to the District upon request for review of possible cross-connection hazards as a condition of service for new service connections. If it is determined that a backflow prevention device is necessary to protect the public water system, the required device must be installed before service will be 23-10 activated. An initial hazard assessment of each premise must be completed before service is provided to the site. 2. The District may require an on premise hazard assessment to evaluate cross-connection hazards. The District will transmit a written notice requesting an inspection appointment to each affected water user. Any customer who cannot or will not allow an on premise inspection of their piping system shall be required to install a reduced pressure principle backflow prevention assembly in accordance with the CCCPH Appendix D. 3. The District may, at its discretion, require a periodic re-assessment for cross-connection hazards of any premises to which it serves water. Re-assessments will occur whenever there is a usage type change at a site, when an ownership change occurs(excluding single family residential sites), when the District believes that activities on the site present a higher level of hazard than when previously assessed, if backflow from a user’s premises occurs, and periodically on the timelines identified in the District’s cross connection control plan. The District will transmit a written notice requesting an inspection appointment to each affected water user. Any customer who cannot or will not allow an on-premise inspection of their piping system shall be required to install a reduced pressure principle backflow prevention assembly in accordance with the CCCPH Appendlix D. K. Customer Notification - Device Installation and/or Repair (Corrective Action) 1. The District will notify the water user of the survey findings, listing corrective action to be taken if required. A period of 30 days will be given to complete all corrective action required including installation of backflow prevention devices. 23-11 2. A second notice will be sent to each water user who does not take the required corrective action prescribed in the first notice within the 30-day period allowed. The second notice will give the water user a 14-day period to take the required corrective action and will generate the assessment of a fee in accordance with Appendix A of this Ordinance. If no action is taken within the 14-day period, the District may terminate water service to the affected water user until the required corrective actions are taken. 3. A third and final notice will be sent to each water user who fails to take the requisite corrective action detailed in the second notice within the 14-day period allowed. The third notice will indicate the date of service termination and will generate the assessment of a fee in accordance with Appendix A of this Ordinance. 4. Only passing test results from a certified and District-approved tester/installer received electronically through the District’s backflow compliance tester’s portal within the allotted time period will constitute compliance with the above requirements. L. Customer Notification - Testing 1. The District will notify each affected water user when it is time for the backflow preven- tion assembly installed on their service connections to be tested. This written notice shall give the water user 50 days to have the device tested and will supply the water user with the necessary testing information to be used when submitting testing results to the District. 2. A second notice shall be sent to each water user who does not have their backflow preven- tion device tested by the response due date prescribed in the first notice. The second notice will give the water user an additional 14 days to have their backflow prevention 23-12 device tested. If no action is taken within the 14-day period, the District may terminate water service to the affected water user until the subject device is tested. 3. A third notice will be sent to each water user who fails to have their backflow prevention device(s) tested as required in the second notice within the 14-day period allowed. The third notice will indicate the date of service termination (10 days after the receipt of the notice) and will generate the assessment of a fee in accordance with Appendix A of this ordi- nance. 4. Α hand delivered notice may be provided to the property, where possible, to each water user who fails to have their backflow prevention device(s) tested as required in the third notice within the 10-working day period allowed. The hand delivered notice will indicate the date of service termination, typically with 48-hours, and will generate the assessment of a fee in accordance with Appendix Α of this Ordinance. The District would make the final determination if a hand delivered notice will be provided as a final measure to achieve backflow testing compliance prior to service interruption. 5. Submittal of passing test results by a District approved tester, through the District’s backflow compliance tester’s portal, within the allotted time period will constitute compliance with the above requirements. M. Water Service Termination A. General When the District encounters water uses that rep- resent a clear and immediate hazard to the potable water supply that cannot be immediately abated, the District shall institute the procedure for discontinuing the District water service. A reconnection fee will be assessed in accordance with Appendix A of this Ordinance. Where a disconnection 23-13 of District water service is required, the District will make the final determination of which, if not all, services entering a site will be subjected to disconnection. B. Basis for Termination Conditions or water uses that create a basis for water service termination shall include, but are not limited to the following items: 1. Refusal to install a required backflow pre- vention device; 2. Refusal to test a backflow prevention device; 3. Refusal to repair a faulty backflow prevention device; 4. Refusal to replace a faulty backflow prevention device; 5. Observed bypassing or alteration of a backflow prevention device; 6. Direct or indirect connection between the public water system and a sewer line, including treated sewage; 7. Unprotected direct or indirect connection between the public water system and a system or equipment containing pollutants or contaminants; 8. Unprotected direct or indirect connection between the public water system and an auxil- iary water system; and/or 9. Any situation which presents an immediate health hazard to the public water system. Additional remedies for failure to comply with cross- connection requirements are referenced in Section 72 of the Code of Ordinances and may be prosecuted as set forth in Section 73.01 of this Code. N. Water Service Termination Procedures 23-14 The District has absolute discretion to determine the corrective action required and referenced in Sections 72 and 73 of this Code. 1. For conditions 1, 2, 3, or 4, the District will terminate service to a customer's premise after two (2) written notices have been sent specifying the corrective action needed and the time period in which it must be done. If no action is taken within the allowed time period water service may be terminated. 2. For conditions 4, 5, 6, 7, 8, or 9, the District will take the following steps: a. Make reasonable effort to advise the water user of intent to terminate water service; b. Terminate water supply and lock service valve. The water service will remain inactive until corrections of violations have been approved by the District. O. Requirements for addition to or renewal on the Otay Water District list of approved backflow prevention device testers A. Each applicant (tester) desiring initial addition to the District’s List of Approved Backflow Prevention Device Testers shall submit a fee in accordance with Appendix A of this Ordinance. Fees must be made in an acceptable form of payment to the District. Along with the fee, a current mailing address, email address, phone number, and signed copy of the backflow prevention assembly tester’s code of conduct must be furnished. Those applicants not meeting all qualifications specified herein will have current fees returned. B. Applicants shall hold a valid and current certification from the American Water Works Association (AWWA) California Nevada Section, the American Backflow Prevention Association (ABPA), or the American Society of Sanitary Engineering (ASSE). After July, 1 2027, acceptable organizations must be accredited by 23-15 the American National Standards Institute (ANSI) in accordance with ISO/IEC 17024 and be recognized by the State Water Resources Control Board as a certifying organization. Testing shall be performed using the most current test procedures from the University of Southern California foundation for Cross-Connection Control and Hydraulic Reasearch. Evidence of said certification shall be furnished to the District at the time of application, at the time of renewal, and at any time the District requests verification. Certification alone does not constitute District approval. C. Each applicant shall furnish evidence to show the availability of the necessary tools and equipment to properly test and/or repair such devices. Test kits shall be recalibrated annually and evidence of this shall be electronically submitted and maintained by the tester in the District’s backflow compliance program. D. Tester applicants must agree to comply with the Otay Water District’s backflow prevention assembly tester’s code of conduct. Each new applicant must provide a signed a copy of the tester’s code of conduct prior to being added to the District's List of Approved Backflow Prevention Device Testers. Testers currently listed must sign a new tester’s code of conduct on a four-year interval, as substantive changes occur, and/or as determined by the District. Testers who fail to provide a signed tester’s code of conduct form will be removed from the list and will have to apply as a new tester during the next open enrollment period. E. The tester shall be solely responsible for the competency and accuracy of all tests and reports prepared and submitted to the District. The District reserves the right at any time to require testers to perform repeat testing in the presence of a District staff member should the submitted results not appear to be accurate or if the device shows signs of requiring 23-16 repairs at the time that passing results are received. F. Any tester found to be falsifying testing results or modifying backflow prevention assemblies in a manner other than how approval was received from either the University of Southern California Foundation for Cross- Connection Control and Hydraulic Research or ASSE International, will be removed from the District's List of Approved Backflow Prevention Device Testers for a minimum of three years and will be reported to the tester’s certifying organization. G. The list of approved testers will be furnished upon request to any District customer requiring such service. The list of approved testers will be updated on a bi-annual basis. H. The testers listed will remain listed for as long as their credentials, gauge calibrations, and testers code of conduct all remain current in the District’s backflow compliance program. Testers are required to update their credentials and gauge calibrations through the backflow compliance program’s electronic testers portal. Testers that do not update their credentials will not be able to submit testing results and will be removed from the list after 45 days of being overdue for a credential update. Any tester that falls off of the list will need to reapply as a new tester at the next open enrollment period and will not be added back to the list until the next bi-annual update occurs. I. The District reserves the authority to revoke, suspend, or remove any tester from the list of approved testers for improper conduct, testing, repairs, and/or reporting at any time. Current District staff members and their associated companies cannot be added to the list or perform testing services for backflow prevention assemblies that are tracked in the District’s backflow compliance program. 23-17 FEES A. A second notice for required corrective action will result in a service fee, per backflow device as outlined in Appendix A. B. A third notice (termination of service notice) will result in a service fee per backflow device followed by the assessment of a reconnection fee if such action is required as outlined in Appendix A. C. A reconnection fee per service is required for service to be resumed as outlined in Appendix A. D. Applicants for addition to the list of approved backflow prevention device testers in the Otay Water District will submit an initial filing fee as outlined in Appendix A. 23.05 WATER SERVICE FOR STEAM BOILERS Customers using District water to supply steam boilers are required to provide adequate storage of water for boiler use for a minimum period of 12 hours. 23.06 ELECTRICAL GROUND CONNECTIONS The connection of electrical ground wire to water pipes is prohibited. The District shall assume no responsibility for any loss or damage resulting from such a connection. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: July 2, 2025 SUBMITTED BY: Kevin Koeppen Assistant Chief of Finance PROJECT: Various DIV. NO.ALL APPROVED BY: Joe Beachem, Chief of Finance Jose Martinez, General Manager SUBJECT: Adopt Ordinance No. 599 Amending Section 25 and Section 53 of the District’s Code of Ordinances to Add a Variance Allowance for Water and Sewer Fees and Charges, and Incorporate Other Miscellaneous Updates GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Ordinance No. 599, amending Section 25 and Section 53 of the District’s Code of Ordinances to add variance allowances for water and sewer fees and charges, and to incorporate other miscellaneous updates. PURPOSE: To request that the Board adopt Ordinance No. 599, amending sections 25 and 53 of the District’s Code of Ordinances to add variance allowances for water and sewer fees and charges, and to incorporate miscellaneous updates. ANALYSIS: Periodically, District staff perform reviews of policies and procedures and recommends amendments to align with District practices and/or industry standards. During a recent review of the District’s Code of Ordinances, specifically Section 25, Conditions for Water Service, and Section 53, Conditions for Sewer Service, staff AGENDA ITEM 4 2 identified updates that should be made based on the District’s current practices and/or industry standards. The first set of amendments pertains to Section 25, Conditions for Water Service. Staff recommends revising subsection 25.03.B to update the treatment of pass-through fixed fees from the San Diego County Water Authority (CWA) and the Metropolitan Water District of Southern California (MWD). Specifically, staff proposes to: A) Remove the MWD Capacity Reservation Charge from the fixed fee, as this peaking-based fee is collected through the District’s potable usage charge. B) Add CWA’s Fixed Transportation Charge to the fixed fee. This new charge was implemented by CWA in 2025 and is currently recovered through the District’s MWD/CWA Fixed Charges. The second amendment pertains to the addition of a variance allowance process to the District’s Code of Ordinances, specifically Section 25, Conditions for Water Service, and Section 53, Conditions for Sewer Service. The District commonly allows variances to water and sewer charges for certain atypical circumstances. For example, one- time leak adjustment credits are provided to customers who experience a significant bill increase due to a pipe burst or other personal plumbing issue on their property. Another example involves customers who are required to have a one-inch meter strictly for fire flow purposes but whose actual demand is consistent with a 3/4-inch meter and are therefore charged the 3/4-inch system fees. The District’s adoption of this amendment will, first and foremost, codify current practices. Second, it will provide a formal application process for customers to request a variance to the standard District fee or charge based on unusual circumstances. This option is available when a customer’s water or sewer usage characteristics differ substantially from the assumptions for their customer class or meter size. Finally, offering customers a method to be accurately classified based on their usage patterns will help the District address and mitigate potential Proposition 218 issues. FISCAL IMPACT: Joe Beachem, Chief Financial Officer None. STRATEGIC GOAL: The District ensures its continued financial health through long-term financial and debt planning. 3 LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B – Ordinance No. 599 Exhibit 1a – Section 25 Strike-through Exhibit 1b – Section 53 Strike-through Exhibit 2a – Section 25 Proposed Exhibit 2b – Section 53 Proposed ATTACHMENT A SUBJECT/PROJECT: Adopt Ordinance No. 599 Amending Section 25 and Section 53 of the District’s Code of Ordinances to Add a Variance Allowance for Water and Sewer Fees and Charges, and Incorporate Other Miscellaneous Updates COMMITTEE ACTION: NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for board approval. This report will be sent to the Board as a committee approved item, or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full board. 1 ORDINANCE NO. 599 AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AMENDING SECTION 25 AND SECTION 53 OF THE DISTRICT’S CODE OF ORDINANCES BE IT ORDAINED by the Board of Directors of the Otay Water District that Section 25, Conditions for Water Service, of the District’s Code of Ordinances shall be amended as set forth in Exhibit 1a, and Section 53, Conditions for Sewer Service, shall be amended as set forth in Exhibit 1b to this ordinance. NOW, THEREFORE, BE IT RESOLVED that the amended Sections 25 and 53, as presented in Exhibits 2a and 2b, respectively, shall become effective immediately. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting duly held this 2nd day of July 2025, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ President ATTEST: __________________________ District Secretary Attachment B 25-1 25 SECTION 25 CONDITIONS FOR WATER SERVICE 25.01 SERVICE AREA Water service shall be furnished by the District only to property within (annexed to) a water improvement district within the District’s service area. Water service to property located outside an improvement district may be furnished only upon prior approval of the Board of Directors. Temporary water service to property located outside an improvement district may be furnished, in accordance with Section 25.03 D.15., upon the approval of the General Manager. 25.02 DEFINITION OF "HCF" AND "UNIT OF WATER" As used in the Code the terms "HCF" and "unit of water" are interchangeable and each shall mean 100 cubic feet or 748 gallons of water. 25.03 DEFINITIONS OF WATER SERVICE CATEGORIES, WATER RATES, CHARGES AND FEES Water service furnished by the District shall be under the categories of services and at the rates, charges and fees as set forth in Appendix A, Section 25. All District water rates, charges and fees are subject to Board approval of rate increases beginning January 1, 2023 and periodically thereafter through December 31, 2027. The increases shall be the amount sufficient to cover pass-through costs from wholesale water and energy suppliers, and increases in overall non-supplier costs, in addition to increases in pass- through costs, not to exceed the annual increase in the Consumer Price Index-U for the San Diego-Carlsbad Area as of January 31 of the preceding year. Five-year periodic pass–through rate increases or decreases from District wholesalers – All District water rates, charges and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2023 through December 31, 2027. A.Set-up Fees for Accounts A set-up fee shall be charged for each account transferred to another customer. See AppendixA, 25.03 A. for charges. A deposit will be required of allcustomers who do not own the property to be served. See Appendix A, 25.04 A. for deposit amounts. B.Monthly Fixed MWD & CWA Charges Each potable water service customer shall pay a monthly MWD and CWA fixed system charge, as set forth in Appendix A, 25.03 B. Proceeds of the charge will be used to pay for operating and maintenance costs, including the following: MWD Readiness- Exhibit 1a 25-2 to-Serve Charge, and Capacity Reservation Charge; CWA Infrastructure Access Charge, Customer Service Charge, Emergency Storage Charge, Fixed Transportation Charge, and Supply Reliability Charge. The MWD & CWA charge is based on the size of the water meter(s) in service with the exception of upsizing the meter for individually metered residential fire service, as described in Section 38.03 of the Code. The MWD & CWA charge shall start upon installation of the meter. C. Monthly Fixed System Charges Each water service customer shall pay a monthly fixed system charge, as set forth in Appendix A, 25.03 C. Proceeds of the charge will be used to pay for water system replacement, maintenance, and operation expenses. The system charge is based on the customer class and the size of the water meter(s) in service. For individually metered residential fire service, as outlined in Section 38.03 of the Code, the size and fee would be set based on water use requirements without additional fire capacity. The system charge shall start upon installation of the meter. D. Categories of Water Service The definitions and rates and charges for water service furnished by the District shall be as follows: 1. DOMESTIC RESIDENTIAL WATER (a) Defined as: Water service for single residential and individually metered attached households as well as other domestic uses (other than that provided for in Paragraph 2.(a)). (b) Base Rate: The tiered base rates of water furnished under this category shall be set forth in Appendix A, 25.03 D.1.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.1. 2. MULTI-RESIDENTIAL WATER (a) Defined as: Master metered water service for multiple residential households, for example, duplexes, townhomes, apartments, and mobile homes. (b) Base Rate: The tiered base rates of water furnished for each dwelling unit in this category shall be as set forth in Appendix A, 25.03 D.2.(b). 25-3 (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.2. 3. BUSINESS AND COMMERCIAL WATER (a) Defined as: Potable water service for commercial and industrial establishments. (b) Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.3.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.3. 4. NON-PUBLIC IRRIGATION AND COMMERCIAL AGRICULTURE USING POTABLE WATER (a) Non-public irrigation is potable water service provided solely for irrigation of landscape or landscaping, as defined in Section 0.02 of this Code. (b) Commercial agricultural engaged in the growing or raising of livestock, in conformity with recognized practices of husbandry, for the purpose of commerce, trade or industry, or agricultural horticultural or floricultural products and produced, (i) for human consumption or for the market, or (ii) for the feeding of fowl or livestock produced for human consumption or for the market, or (iii) for feeding fowl or livestock for the purpose of obtaining their products for human consumption or for the market, such products to be grown or raised on a parcel of land having an area of not less than one acre utilized exclusively therefore. (c) Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.4.(c). (d) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.4. 5. PUBLICLY-OWNED WATER 25-4 (a) Defined as: Potable water service for publicly- owned establishments and/or entities exempt from District property taxes. (b) Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.5.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.5. 6. PUBLIC IRRIGATION WATER (a) Defined as: Potable water service provided solely for irrigation of publicly-owned landscape or landscaping as defined in Section 0.02 of this Code and/or entities exempt from District property taxes. (b) Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.6.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.6. 7. CONSTRUCTION WATER (a) Defined as: Potable water service for construction or for temporary purposes pursuant to Section 31 of this Code. (b) The rates for water furnished under this category is set forth in Appendix A, 25.03 D.7.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.7. 8. RECYCLED WATER – NON-PUBLIC IRRIGATION, CONSTRUCTION, AND CERTAIN NON-IRRIGATION PURPOSES (a) Defined as: Non-potable and recycled water service provided for irrigation of landscaping, as defined in Section 0.02 of the Code, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state, and local laws and regulations regarding use of recycled water. (b) The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly 25-5 enforced in connection with the use of recycled water. (c) Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.8.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 9. RECYCLED WATER - COMMERCIAL (a) Defined as: Non-potable and recycled water service provided for commercial customers, as defined in Section 0.02 of the Code, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state and local laws and regulations regarding use of recycled water. (b) The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. (c) Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.9.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 10. RECYCLED WATER – PUBLIC IRRIGATION (a) Defined as: Non-potable and recycled water service provided for irrigation of publicly-owned landscaping, as defined in Section 0.02 of the Code, and/or entities exempt from District property taxes, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state and local laws and regulations regarding use of recycled water. (b) The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. 25-6 (c) Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.10.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 11. POTABLE INTERIM BUSINESS AND COMMERCIAL WATER (a) Defined as: Potable water service provided by the District on a temporary basis to business and commercial customers in Improvement District 7 (ID 7) pursuant to individual agreements. (b) If capacity fees have not been paid by the customer, the rates for water furnished under this category is set forth in Appendix A, 25.03 D.11.(b). (c) If the customer has paid equivalent capacity and annexation fees, the rates and charges for water furnished under this category shall be the rates set forth in Appendix A, 25.03 D.3.(b). (d) The applicable monthly system charge shall be the same rates charged to customers in the same category of service on a permanent meter basis per Appendix A, 25.03 C.3. (e) Conversion to Permanent Service. At such time as use expires, the customer shall be required to pay all unpaid fees in effect at the time the permanent use is implemented. 12. POTABLE INTERIM NON-PUBLIC IRRIGATION AND COMMERCIAL AGRICULTURE WATER (a) Defined as: Potable water service provided by the District on a temporary basis to non-public irrigation and commercial agriculture customers in Improvement District 7 (ID 7). (b) If capacity fees have not been paid by the customer, the rates for water furnished under this category is set forth in Appendix A, 25.03 D.12.(b). (c) If the customer has paid capacity and annexation fees, the rates and charges for water furnished under this category shall be the rates set forth in Appendix A, 25.03 D.4.(c). (d) The applicable monthly system charge shall be the same rates charged to customers in the same 25-7 category of service on a permanent meter basis per Appendix A, 25.03 C.4. (e) Conversion to Permanent Service. At such time as use expires, the customer shall be required to pay all unpaid fees in effect at the time the permanent use is implemented. 13. TANK TRUCKS (a) Defined as: Water service provided for the filling of tanks on motor vehicles transporting water used for other than earth grading purposes, which service shall be made only through a portable meter issued by the District to a customer specifically for use in accordance with the provisions herein for such service. (b) The rate for metered water furnished under this category is reflected in Appendix A, 25.03.D.13. (b), plus a monthly system charge at the rate set forth in Appendix A, 25.03 C.4. (c) Requirements for Use of Water Meter (1) To receive such service, the customer must make a deposit for the use a water meter furnished by the District. The fee is set forth in Appendix A, 31.03 A.1. (2) Upon termination of the service, the Dis-trict will refund the amount of deposit remaining after making the following deductions: (i) Cost of repairing or replacing the meter, fire hydrant and/or any fittings damaged or lost while in use; and (ii) Unpaid charges for water or other applicable charges. (3) Prior to the end of each six month period following issuance of a meter under this section, or at the request of the District, whichever is earlier, the customer shall return the meter to the District for inspection, repair, or calibration as deemed necessary by the District. (4) Payment for water service under this cate- gory shall be made as follows: (i) The bill shall be based on the amount of water actually used, which shall be determined by the District’s reading of 25-8 the meter or by a report made by the customer to the District in the manner prescribed by the District. (ii) Where the actual amount of water used cannot be determined as provided in (i), the District will issue a bill based on a District estimate of the amount of water used, as determined by the District. Such estimates shall be reconciled with actual amounts used when the customer returns the meter to the District as provided in paragraph 3 above. (iii)Payments shall be made as specified on the bill. 14. WATER SERVICE OUTSIDE DISTRICT BOUNDARIES (a) Defined as: Water service for real property outside the service area of the District. (b) This service will be provided only upon prior approval of the General Manager when there is a surplus of water over and above the existing needs for service in the District. This service is temporary and may be terminated upon written notice from the District. Customers for this service are sometimes referred to as "outside users." (c) Customers applying for this category of service shall pay an application fee as set forth in Appendix A, 25.03 D.14.(c). (d) The rate for metered water furnished under this category shall be charged the rate as described in Appendix A, 25.03 D.14.(d), plus a monthly system charge at the rate set forth in Appendix A, 25.03 C.5. (e) Customers requesting only fire service or a fire hydrant under this category shall be charged a capacity fee based on one (1) EDU for a permanent meter in the improvement district from which the fire service derives its flow, plus a monthly system charge at the rate set forth in Appendix A, 25.03 D.16.(c). 15. WATER SERVICE OUTSIDE AN IMPROVEMENT DISTRICT (a) Defined as: Water service for property located within the boundaries of the District, but not within a water improvement district. Customers 25-9 for this service are sometimes referred to as "outside users." (b) Customers applying for this service shall pay an application fee as set forth in Appendix A, 25.03 D.15.(b). The District will review the application to determine whether the land to be served should be annexed to an improvement district. If it is determined that annexation is not practical, the Board of Directors may authorize service as an outside user. This service will be reviewed periodically until it is determined that the property must be annexed to an improvement district or that service must be terminated. (c) The rate for metered water furnished under this category is as set forth in Appendix A, 25.03 D.15.(c), plus a monthly system charge as set forth in Appendix A, 25.03 C.5. (d) Upon approval of the Board of Directors, a cus-tomer, who has paid all construction costs for facilities necessary to serve the customer's property in lieu of annexation to a water improvement district, shall be exempt from the provision for this category of service. 16. SERVICE FOR FIRE PROTECTION (a) Defined as: Water service provided by the Dis- trict solely to feed fire hydrants or fire sprinkler systems from lines or laterals con-nected to District water mains. (b) The District will not make a charge for the quantity of water used for fire protection purposes. (c) The monthly system charge for this category of service is set forth in Appendix A, 25.03 D.16.(c) for each connection to a District water main made for fire protection service. 17. WATER SERVICE UNDER SPECIAL AGREEMENTS (a) Defined as: Water service provided under express agreements approved by the Board of Directors for service to golf courses and other entities, which service may be curtailed or interrupted by the District under conditions provided in such agreements. (b) For water service under this category the base rate shall be determined on a case-by-case basis. 25-10 E. Energy Charges for Pumping Water In addition to water rates and other charges provided for in this Section 25.03, customers shall be charged an energy pumping charge based on the quantity of water used and the elevation to which the water has been lifted to provide service. 1. Potable Water Energy Pumping Charge: The energy pumping charge for potable water shall be made at the rate set forth in Appendix A, 25.03 E.1. 2. Recycled Water Energy Pumping Charge: The energy pumping charge for recycled water shall be made at the rate set forth in Appendix A, 25.03 E.2. 25.04 DEPOSITS BY LESSEES OR NON-OWNERS OF PROPERTY A. AMOUNT OF DEPOSIT The customer's deposit shall be applied to reduce or satisfy any delinquent payment or other amount due the District at the time of termination of water service to the customer. Any portion of the deposit remaining, after satisfaction of the amount due, shall be refunded to the customer that made the deposit. The deposits listed per Appendix A, 25.04 A. may be waived for a new residential applicant where the applicant demonstrates credit worthiness based upon prior utility payments or a non-delinquent water account for one year or other similar evidence of credit. B. REFUND OF DEPOSIT Where funds have been on deposit for twelve months in a domestic service account and there has been no more than one delinquent payment on that account during that period, the District will apply a credit to the water account in the amount of the deposit. C. LETTER OF CREDIT A letter of credit, in a form approved by the General Manager or Department Head of Finance, may be submitted to the District to satisfy the deposit requirements. 25.05 SERVICE TO SUBSEQUENT CUSTOMERS After a water meter has been installed for a customer and all fees and charges have been paid, water service may be furnished 25-11 to a subsequent customer through the water meter installed without payment of further charges, except for the set-up fee for transferred accounts, payment of delinquent charges for the applicant's service or other deposits that may be required by this Code. 25.06 PUBLIC NOTIFICATION AND LEGAL OBJECTION PROCESS FOR RATE CHANGES California law requires that certain changes to retail water and sewer fees and charges be adopted in accordance with procedures outlined in Article XIII D, of the California Constitution, commonly referred to as “Proposition 218." Additionally, the Otay Water District has established a formal process, an exhaustion of administrative remedies procedure (“exhaustion procedure”) consistent with Assembly Bill No. 2257 (2024) (chaptered at Government Code sections 53759.1 and 53759.2). The exhaustion procedure allows ratepayers to raise legal objections regarding proposed water or sewer rate increases. This process ensures that ratepayers have an opportunity to voice legal objections to a proposed property-related fee, charge, or assessment (“fee”) for water or sewer service, and provides an opportunity for the District to address or resolve any legal objections before the Board of Directors makes a final decision on whether to adopt a proposed fee pursuant to Proposition 218. The exhaustion procedure outlined below provides a structured framework and requires ratepayers to participate in the pre- adoption legal objection process in order to preserve the legal right to bring forward any judicial action or proceeding against the District regarding the fee structure. A. GENERAL DISTRICT REQUIREMENTS PER THE EXHAUSTION PROCEDURE 1. District will notify the public of the amount of the proposed fee by way of the Proposition 218 notice mailed to all customers and/or owners of record, 2. Make the District’s written basis for the proposed fee (including any cost of service report) publicly available (including on the District’s website), 3. Provide 45 days for any ratepayer to review the proposed fee and its basis and make any legal objection, 4. Require any such objection to be in a writing to the District that specifies the grounds for alleged noncompliance with Proposition 218, and 5. Require the District to consider and respond in writing to timely submitted objections prior to the close of the protest hearing required under Proposition 218. B. BOARD ACTIONS AND PUBLIC PARTICIPATION 25-12 1. The District Board hereby adopts the exhaustion of administrative remedies procedure contained in Government Code section 53759.1(c), as further described below. 2. In connection with the District’s consideration of water or sewer rate increases, the District Board hereby directs the staff to take the following actions: (a) Public Hearing Date. Establish a date certain for a public hearing on any proposed water or sewer rates, at which hearing the staff shall present a summary of any written legal objections from the public during the objection period and responses from staff to those objections. The Board may consider any protests to the proposed fee increases on the same or a different date, but only after considering all objections and responses. The Board may continue the hearing from time-to-time in order to provide additional time for consideration of, and responses to, any timely-submitted legal objections and/or protests. (b) Cost of Service Report. Make available to the public the written basis for the proposed fee or assessment (the “Cost of Service Report”) by: (i) posting it on the District’s website, (ii) making it available at the headquarters of the District, and (iii) mailing it to any property owner upon request. (c) Objection Period. Establish a time frame for an “objection period” of not less than 45 days between mailing of the notice described below and the public hearing, during which period the public may submit a written legal objection to any aspect of the Cost of Service Report. (d) Public Notice. Notify the public in writing of the availability of the Cost of Service Report in the notice sent pursuant to subdivision (c) of Section 4 or paragraph (1) of subdivision (a) of Section 6 of Article XIII D of the California Constitution, and include in that notice: (i) a prominently displayed statement that all written legal objections must be 25-13 submitted within the written objection period and that a failure to timely object in writing bars any right to challenge that fee or assessment through a legal proceeding; and (ii) a prominently displayed description of all substantive and procedural requirements for submitting an objection to the proposed fee or assessment; and (iii) the process for submitting protests. 3. In connection with the District’s consideration of water or sewer rate increases, the District Board will determine at the hearing: (a) Whether the written legal objections and the District’s response warrant clarifications to the proposed fee or assessment or the Cost of Service Report. (b) Whether to reduce the proposed fee or assessment. (c) Whether to further review the Cost of Service Report and proposed fee or assessment before making a determination on whether clarification or reduction is needed. (d) Whether to proceed with the protest hearing or ballot tabulation hearing required under Section 4 or 6 of Article XIII D of the California Constitution. 4. This exhaustion procedure will apply to any proposed water or sewer fees for which notice is provided pursuant to Proposition 218. 5. Pursuant to Government Code sections 53759.1 and 53759.2, a person or entity will be prohibited from bringing a judicial action or proceeding that alleges non-compliance with Proposition 218 for any new, increased, or extended fee adopted by the District, unless that person or entity has timely submitted to the District a written legal objection to that fee that specifies the grounds for the alleged non- compliance. 25.07 PROCESS TO REQUEST A VARIANCE FROM ANY APPLICABLE WATER FEES AND CHARGES A request for a variance or exception to any water-related fee or charge may be filed with the District. The request must be accompanied by photographs, drawings, or other supporting documentation, including a written statement from the applicant Formatted: Indent: Hanging: 0.63", Line spacing: Exactly12 pt Formatted: No underline Formatted: Line spacing: Exactly 12 pt 25-14 demonstrating that a variance or exception is justified due to unusual circumstances applicable to the property. The General Manager, or their designee, will review and act upon the request within thirty (30) days after a completed application package has been received. The applicant requesting the variance shall be notified of the decision in writing. Any approved change will commence on the next water billing cycle. Formatted: Font: (Default) Courier New, 12 pt 53-1 (1) See Appendix A, Section 53 for fees, rates, and charges. SECTION 53 CONDITIONS FOR SEWER SERVICE 53.01 CONDITIONS FOR ACQUISITION OF SEWER SERVICE CAPACITY Sewer service capacity may be acquired only for service to a specific address, parcel of land, or a land development project covered by an approved map. An approved map shall mean a recorded final map, a recorded parcel map or a tentative sub- division map that has been approved by the County or by a City, as applicable. A.District Acceptance of Sewer Facilities for Russell SquareArea - Under an Agreement with Cal Dorado Development, Inc., dated June 28, 1981, the District accepted title to a sewer pump station, force main and appurtenances for a sewage system to provide sewer service to the residential dwelling units to be constructed within the parcels of land in San Diego County Tentative Parcel Map 17150. Under an Agreement with Cal Dorado Development, Inc., dated June 18, 1981, the District agreed to provide service to such parcels on the terms and conditions contained therein. On October 1, 1984, pursuant to Resolution No. 2139, the District Board of Directors accepted title to the facilities. 53.02 SERVICE AREAS Sewer service shall be furnished by the District only to property located in Improvement District No. 18 (ID 18) and the Russell Square Sewer Service Area. Sewer service to property located outside such areas may be furnished only upon annexation to ID 18 and payment of all applicable annexation fees. (See Appendix A, Section 9) A.Designation of Russell Square Sewer Area - The geographicalarea described on the District Map entitled "Russell Square Sewer Service Area," dated October 11, 1988, on file withthe District Secretary, constitutes the Russell Square Sewer Service Area. 53.03 ACQUISITION OF SEWER CONNECTIONS FOR SERVICE Effective October 1, 2014, two separate sewer capacity fees have been established to ensure sewer customers do not pay for facilities twice. The first capacity fee applies to parcels within an ID that paid prior tax debt. The second capacity fee applies parcels outside an ID that have not paid the tax debt. The sewer capacity fees shall constitute the "base rate." For fees or charges after June 7, 2017, the base rate shall be adjusted on the first day of each calendar quarter for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 11,555.03 Exhibit 1b 53-2 (1) See Appendix A, Section 53 for fees, rates, and charges. (as of April 1, 2017) shall be deemed the "base index." The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from April 1, 2017 to the date of payment. 1. Sewer Capacity Fee within an ID All new sewer connections for parcels within a sewer ID shall pay a capacity fee (1) for each Equivalent Dwelling Unit (EDU) of sewer service provided. The capacity fee is due at the time an application for sewer service is requested. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. 2. Sewer Capacity Fee outside an ID All new sewer connections for parcels not within a sewer ID (requiring to be annexed into a sewer ID18 per Code Section 9.04 C.) shall pay a capacity fee (1) for each Equivalent Dwelling Unit (EDU) of sewer service provided. The capacity fee is due at the time an application for sewer service is requested. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. B. Russell Square Pump Station 1. Sewer Connection Fee A connection fee (1) for each Equivalent Dwelling Unit (EDU) of sewer service provided through Russell Square Pump Station shall be collected. The connection fee is due at the time an application for sewer service is submitted. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. The connection fee shall be used by the District solely for the maintenance, repair or replacement of the Russell Square Pump Station. (a) Exempt Parcels - The connection fee shall not apply to connections for sewer service to the parcels within the Tentative Parcel Map 17150. Such exempt parcels are currently identified as Assessor Parcel Nos. 497-011-41, 497-011-42, 497- 011-44, 497-011-46 and 497-011-47. 2. Monthly Sewer Service Charge A monthly sewer service charge (1) to cover normal operational costs of the Russell Square Pump Station and force mains shall be collected. This charge shall be reviewed by the Board of Directors from time to time to assure that such charges cover the costs for operation of the sewer facilities. 53-3 (1) See Appendix A, Section 53 for fees, rates, and charges. In addition, the customer for such service shall pay the monthly service charge (1) for sewer service set forth in Section 53.10 A and B of the Code. 53.04 CHARGES FOR INSTALLATION OF SEWER LATERALS Upon application for construction of one or more sewer laterals, the customer shall deposit with the District the estimated costs to be incurred by the District in connection with the instal- lation of the facilities required, as determined by the District. Upon completion of the work, the District shall calculate the actual costs incurred by the District in performing the work. If actual costs are less than the amount deposited, the District shall refund the balance of the deposit to the customer. If actual costs exceed the amount deposited, the customer shall reimburse the District for the additional costs. 53.05 PAYMENT OF FEES All fees prescribed in the Code shall become owing, due and payable at the time application is made to connect a premise to the sewer system of the District. The fees shall be paid to the District prior to the issuance of any permit authorizing the connection of such premise to the District sewer system. If the proposed connection cannot be made, the fee may be refunded when approved by the General Manager. 53.06 SEWER SERVICE USE CHANGES RESULTING IN INCREASED SYSTEM UTILIZATION The use of a sewer connection shall be limited to the type and number of EDUs authorized by the original wastewater discharge permit. Before adding any additional equivalent dwelling units, buildings, modifying existing buildings, or change of occupancy type, the property owner shall make a supplementary wastewater permit application to the District for such change in use and pay additional sewer annexation fees per EDU, if necessary, as may be applicable. Periodic inspection of the premises may be made by the District and if actual use is greater than estimated use, an assessment for additional annexation fees shall be assessed. (1) 53.07 WASTEWATER DISCHARGE PERMIT ISSUANCE AND LIMITATION A. A wastewater discharge permit shall be required for any property for which a request is made to discharge into the District sewage system. B. Every wastewater discharge permit shall expire by limitations and shall become null and void, if the construction or work authorized by such permit is not commenced within 120 days from date of issuance of such 53-4 (1) See Appendix A, Section 53 for fees, rates, and charges. wastewater discharge permit or if the construction or work authorized by such wastewater discharge permit is suspended or abandoned for a period of 120 days at any time after the work is commenced. C. Before such work can be recommenced, a new wastewater discharge permit application must be filed with the District. The District may reactivate the previous wastewater discharge permit provided that wastewater quantity and type is the same as the wastewater discharge allowed under the original permit, and provided further that such suspension and abandonment has not exceeded one year. Fees paid for the previous wastewater discharge permit may be credited toward the total permit fees required on the new permit application. Reactivation of the previous wastewater discharge permit shall be subject to District sewer capacity being available at the time of new application and subject to any additional costs or charges imposed during the period of such suspension or abandonment. 53.08 BASIS FOR DETERMINATION OF EQUIVALENT DWELLING UNITS (EDUs) The number of EDUs for sewer service shall be determined on the following basis: A. Residential Facilities EDUs Description 1 ▪ Single-family residence (Includes manufactured homes and mobile homes which are on private lots.) ▪ A secondary structure with a kitchen is considered an additional EDU ▪ Each individual living unit in apartments, multi- family housing and residential condominiums ▪ Each individual space in mobile homes and trailer Parks 53-5 (1) See Appendix A, Section 53 for fees, rates, and charges. B. Commercial/Industrial Facilities 1. Food Service Establishments EDUs Description 3 ▪ Take-out restaurants with disposable utensils, no dishwasher and no public restrooms ▪ Take-out restaurants with disposable utensils, no dishwasher and no public restrooms ▪ Miscellaneous food establishments – ice cream shops, yogurt shops, bakeries (sales on premise only) ▪ Take-out/eat-in restaurants with disposable utensils, but with seating and public restrooms ▪ Restaurants with reusable utensils, seating and public restrooms (0-18 seats) o Add 1.0 EDU for each additional 6 seat unit, or portion thereof 2. Hotels and Motels EDUs Description .38 Per living unit without kitchen .60 Per living unit with Kitchen 3. Commercial, Professional, Industrial Buildings and Establishments not specifically listed herein EDUs Description 1.2 For first 1,000 square feet AND +0.7 For each additional 1,000 square feet or portion thereof Applies to any office, store or industrial condominium or Establishments 1.2 +0.7 For first 1,000 square feet AND For each additional 1,000 square feet of gross building floor area. Portions less than 1,000 sq. ft. will be prorated. Applies to situations where the occupancy type or usage is unknown at the time of application for service. This shall include, but not be limited to, shopping centers, industrial parks and professional office buildings. 1.0 Self-service laundry per washer 53-6 (1) See Appendix A, Section 53 for fees, rates, and charges. 4. Convalescent Homes EDUs Description 0.7/bed Skilled nursing care facilities, psychological hospitals, convalescent hospitals; licensed by the applicable Governmental Agency. 0.5/bed Community Care Facilities with 16 or more beds licensed by the applicable Governmental Agency. 1.0 Community Care Homes with six or fewer total residents, including resident staff and housekeepers (to be the same EDU as a single family residence). C. Other commercial, industrial and other types of business establishments not included in 53.08 B.1 through 53.08 B.4 If the establishment is not included in 53.08 B.1 through 53.08 B.4 or if the EDUs specified in 53.08 B.1 through 53.08 B.4 are not representative of actual flow due to the number of employees or type of operation, the number of EDUs shall be determined in each case by the list of commercial strengths as defined by the State Water Resources Control Board (SWRCB) or by the General Manager and shall be based upon the estimated volume and type of wastewater discharge into the sewer. Examples of commercial, industrial and other business establishments include, but are not limited to, bottling works, supermarkets, markets, deli/markets, convenience stores, hospitals, laundries (other than self-service laundries), automobile service stations, mortuaries, day- care centers, bars and pool halls. 53.09 TRANSFER, ASSIGNMENT, OR RESALE OF SEWER CONNECTION RIGHTS EDU sewer connection rights obtained by a customer may not be sold, transferred, or assigned separately from ownership of the real property for which they were obtained, unless otherwise stated in an agreement with the District. 53.10 DEFINITIONS OF RESIDENTIAL AND MULTI-RESIDENTIAL SEWER SERVICE RATES, CHARGES AND FEES All District sewer rates, charges, and fees are subject to Board approval of rate increases to residential and multi-residential sewer services billed on or after January 1, 2021 and may apply to sewer services as early as the beginning of December 2020 and periodically thereafter through December 31, 2025. The increases shall be the amount sufficient to cover cost increases 53-7 (1) See Appendix A, Section 53 for fees, rates, and charges. related to operation and maintenance, but not to exceed 10% per year. Five-year Periodic Pass-through Rate Increases or Decreases from District Wholesalers - All District sewer rates, charges, and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2021 through December 31, 2025. Set-up Fees for Accounts - A set-up fee (1) shall be charged for each account transferred to another customer. Three-year Winter Average - Sewer rates shall be based on the average of the customer’s “Three-Year Winter Average” water consumption, measured in units of hundred cubic feet (HCF). The winter average period is January through April. The three-year winter average is calculated by adding the four months of water consumption and dividing the resulting amount by four for each of the preceding three years and then taking the average of those three years. This average is then reduced by a 15% usage discount, recognizing that not all water used flows into the sewer system. The sewer rate is multiplied by the “Three-Year Winter Average” calculation for each customer (after the above noted 15% discount) and this amount is added to the monthly fixed sewer system charge applicable to the size of meter. The resulting amount shall be charged on a monthly basis and fixed for an entire calendar year, until a new “Three-Year Winter Average” is determined for the following year. The sewer rate is multiplied by the “Three-year Winter Average” calculation for each customer (after the above noted 15% discount) and this amount is added to the monthly fixed sewer system charge applicable to the size of meter. The resulting amount shall be charged on a monthly basis and fixed for an entire calendar year, until a new “Three-year Winter Average” is determined for the following year. (1) A. Residential Rate Charges 1. Defined as: Sewer service for individually metered residential households. 2. The monthly sewer bill is calculated by adding the system charge plus the sewer rate as described in Section 53.10 above. 3. The maximum “Three-year Winter Average” for individually metered residential customers is 30 units (after the 15% discount). 4. Monthly Residential Sewer Charges without three years of Consumption History: The average residential sewer rate shall be determined by calculating the total monthly sewer rate for all residential customers and dividing it 53-8 (1) See Appendix A, Section 53 for fees, rates, and charges. by the number of residential customers. The monthly average residential sewer rate is then added to the monthly fixed sewer system charge which shall then be used to determine the total monthly amount for residential customers with less than three months of winter usage, customers using well water or other unmetered water. New customers with less than three years of history but more than three months of winter usage in any given year, will have their “Three-Year Winter Average” determined by the average of the winter water usage for the total number of years they have been customers of record.(1) B. Multi-Residential Rate Charges 1. Defined as: Sewer service for master metered water service for multi-residential households including for example; duplexes, townhomes, apartments, and mobile homes. 2. The monthly sewer bill for the complex is calculated by adding the monthly fixed sewer system charge based on meter size, plus the sewer rates multiplied by the three-year winter average, for the entire complex. (1) Note: There is no cap on consumption for multi-residential customers. 3. Monthly Multi-Residential Sewer Charges without Consumption History: The multi-residential sewer rate shall be determined by calculating the total monthly sewer rate for all multi-residential customers and dividing it by the number of multi-residential dwelling units. The monthly sewer rate per dwelling unit is multiplied by the new customer’s number of dwelling units and this shall be added to the monthly fixed sewer system charges, based on meter size, to determine the monthly rate. This is applicable to new complexes that do not have a prior winter consumption history.(1) New multi-residential customers with less than three years of history but more than three months of winter usage in any given year, will have their “Three-Year Winter Average” determined by the average of the winter water usage for the total number of years they have been customers of record. 53.11 DEFINITIONS OF COMMERCIAL AND INDUSTRIAL SEWER SERVICE RATES, CHARGES AND FEES All District sewer rates, charges, and fees are subject to Board approval of rate increases to commercial and industrial sewer services billed on or after January 1, 2021 and may apply to sewer services as early as the beginning of December 2020 and periodically thereafter through December 31, 2025. The 53-9 (1) See Appendix A, Section 53 for fees, rates, and charges. increases shall be the amount sufficient to cover cost increases related to operation and maintenance, but not to exceed 10% per year. Five-year Periodic Pass-through Rate Increases or Decreases from District Wholesalers - All District sewer rates, fees, and charges, are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2021 through December 31, 2025. Set-up Fees for Accounts - A set-up fee (1) shall be charged for each account transferred to another customer. Average Annual Consumption - The Average Annual Consumption, measured in units of hundred cubic feet (HCF). The annual consumption period is January through December of the preceding year divided by the number of months of consumption. This average is reduced by a 15% usage discount which recognizes that not all water used flows into the sewer system. Sewer Rate - The rate (1) is determined by the commercial customer’s sewer strength category in which they are assigned (low strength, medium strength or high strength). Monthly Fixed Sewer System Charges - The monthly fixed sewer system charge is determined by the commercial customer’s water meter size. (1) Strength Factor - The State Water Resources Control Board (SWRCB) has grouped commercial customers into various categories and has identified Strength Factors for each of these business categories. The standard of measure for Strength Factors is the typical sewer strength of a single‐family residence which has strength factor of 1. A. Commercial Rate Charges 1. The monthly sewer bill for commercial sewer customers is calculated by multiplying the average annual consumption, reduced by 15%, by the sewer rates based on strength plus the monthly fixed sewer system charges based on the customer’s water meter size. (1) 2. For new commercial sewer customers without consumption history, staff shall make a determination of the average annual consumption to be used until a year’s consumption data can be collected. The determination shall be based on the prior owner or tenant of the sewer connection, or based on the most similar type of current business operation. If the customer does not agree with staff’s recommendation, the customer may request an adjustment in writing, and direct it to the General Manager. 53-10 (1) See Appendix A, Section 53 for fees, rates, and charges. B. Industrial and Other Users 1. Charges determined by the Board of Directors on a case-by-case basis. Monthly fixed sewer system charges shall commence upon installation of the water meter to serve the premises receiving the sewer service, upon connection to the District sewer system, upon start of occupancy of the premises to be served, or one year after the date the application for sewer service is filed. If a sewer service connection has been obtained and if sewer service will not be used until sometime after installation of the water meter, commencement of the sewer system charge may be deferred until the later date only upon prior approval of the General Manager. C. Commercial User Classifications Commercial sewer service customers are subject to periodic inspection of the premises by the District for verification of proper sewer strength classification. In addition to such periodic inspections, strength classifications will be reviewed periodically, at the discretion of the District. If warranted following a periodic inspection, periodic classification review, or a change in the nature of a customer’s business and/or use of the property, customers may be reclassified to reflect their current business operations and proper sewer strength, at the discretion of the District and consistent with the standards set forth herein and in the State Water Resources Control Board (SWRCB) listing for sewer strength. 1. Low-Strength Commercial = 1.0 Strength Factor Car wash General office and buildings Barber and beauty shops Department, retail stores and general commercial Hospitals and convalescent homes Public Laundromats and dry cleaners Professional office or office building Warehouse Bars without dining facilities Churches Schools (Elementary, junior & High Schools, Colleges) Other uses having a similar strength as determined by the District 2. Medium-Strength Commercial = 2.0 Strength Factor Hotels without dining facilities or cooking facilities 53-11 (1) See Appendix A, Section 53 for fees, rates, and charges. Auto repair/sales shop and service station Shopping centers Other uses having a similar strength as determined by the District 3. High-Strength Commercial = 4.0 Strength Factor Bakery or bakery with deli Hotel with dining facilities Restaurants and bars with food Grocery stores with onsite butcher and/or bakery Other uses having a similar strength as determined by the District D. Process to Request a variance from any applicable sewer fees and charges: 1. A request for a variance or exception to any sewer related fee or charge may be filed with the District. The request must be accompanied by photographs, drawings and other supporting information including a written statement from the applicant. The General Manager, or designee, will act upon the request within thirty (30) days after a completed application package has been received. The applicant requesting the variance shall be notified in writing of the decision. Any approved change will commence on the next sewer billing cycle. 53.12 ISSUANCE AND PAYMENT OF SEWER BILLS A. Issuance of Statements: Statements for sewer service or other charges will be mailed monthly or as soon as practical, after the applicable charges have been determined. B. Due Date: Each statement issued by the District for such charges shall be due and payable on the date of mailing or other presentation to the customer. C. Final Payment Date: All charges in each statement must be paid on or before the final payment date shown on the statement, which shall be at least 20 calendar days following the date of mailing or presentation of the statement. D. Place of Payment: Payments shall not be credited to a customer’s account until cash, check, credit card, draft, electronic funds transfer, money order or any other acceptable form of payment that will be honored by the bank has been received by the District at the District business office during regular office hours. Deposit of payment in the mail or at a location other than the District business office shall not be credited to a customer’s account until Formatted: Font: 12 pt, Underline Formatted: List Paragraph, Indent: Left: 0", First line: 0", Line spacing: single, Tab stops: 1.51", Left + 1.51",Left + Not at 1" 53-12 (1) See Appendix A, Section 53 for fees, rates, and charges. received at the business office. E. Returned Check Charges: A returned payment charge (see Appendix A, Section 34 for charge) shall be added to a customer’s account in each instance where payment has been made to the District with a check, draft, credit card or any other acceptable form of payment that has not been honored upon presentment to the bank upon which it is drawn. 53.13 DELINQUENT ACCOUNTS A. Requirement of Deposit Due to Repeated Delinquencies: If payments on a customer account have become delinquent five or more times, the General Manager, Chief Financial Officer, or any person delegated by the General Manager, shall be authorized to require the customer to make a deposit with the District, in cash or any other form satisfactory to the General Manager. The deposit amount shall be established at the discretion of the General Manager and the Chief Financial Officer, but shall not exceed two times the highest bill during the twelve (12) months preceding the date of demand for a deposit. B. Handling of Deposit: A deposit shall not earn interest and shall only be applied to reduce or satisfy amounts due the District in the event of termination of service. A deposit does not constitute payment for service bills and the customer shall be required to comply with bill payment requirements to continue receiving service. C. Refund of Deposit: A deposit required under this Section shall be refunded to the customer as provided in Section 25.04 B of the Code. 53.14 PROCESS TO REQUEST A VARIANCE FROM ANY APPLICABLE SEWER FEES AND CHARGES A request for a variance or exception to any sewer-related fee or charge may be filed with the District. The request must be accompanied by photographs, drawings, or other supporting documentation, including a written statement from the applicant demonstrating that a variance or exception is justified due to unusual circumstances applicable to the property. The General Manager, or their designee, will review and act upon the request within thirty (30) days after a completed application package has been received. The applicant requesting the variance shall be notified of the decision in writing. Any approved change will commence on the next sewer billing cycle. Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Font: 12 pt, Underline Formatted: Underline Formatted: Indent: Left: 1.07", Right: 0.25", SpaceBefore: 9.6 pt, Line spacing: Multiple 0.88 li, Tab stops: 4.57", Left + 6.87", Left 25-1 25 SECTION 25 CONDITIONS FOR WATER SERVICE 25.01 SERVICE AREA Water service shall be furnished by the District only to property within (annexed to) a water improvement district within the District’s service area. Water service to property located outside an improvement district may be furnished only upon prior approval of the Board of Directors. Temporary water service to property located outside an improvement district may be furnished, in accordance with Section 25.03 D.15., upon the approval of the General Manager. 25.02 DEFINITION OF "HCF" AND "UNIT OF WATER" As used in the Code the terms "HCF" and "unit of water" are interchangeable and each shall mean 100 cubic feet or 748 gallons of water. 25.03 DEFINITIONS OF WATER SERVICE CATEGORIES, WATER RATES, CHARGES AND FEES Water service furnished by the District shall be under the categories of services and at the rates, charges and fees as set forth in Appendix A, Section 25. All District water rates, charges and fees are subject to Board approval of rate increases beginning January 1, 2023 and periodically thereafter through December 31, 2027. The increases shall be the amount sufficient to cover pass-through costs from wholesale water and energy suppliers, and increases in overall non-supplier costs, in addition to increases in pass- through costs, not to exceed the annual increase in the Consumer Price Index-U for the San Diego-Carlsbad Area as of January 31 of the preceding year. Five-year periodic pass–through rate increases or decreases from District wholesalers – All District water rates, charges and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2023 through December 31, 2027. A.Set-up Fees for Accounts A set-up fee shall be charged for each account transferred to another customer. See Appendix A, 25.03 A. for charges. A deposit will be required of all customers who do not own the property to be served. See Appendix A, 25.04 A. for deposit amounts. B.Monthly Fixed MWD & CWA Charges Each potable water service customer shall pay a monthly MWD and CWA fixed system charge, as set forth in Appendix A, 25.03 B. Proceeds of the charge will be used to pay for operating and maintenance costs, including the following: MWD Readiness- Exhibit 1b 25-2 to-Serve Charge, CWA Infrastructure Access Charge, Customer Service Charge, Emergency Storage Charge, Fixed Transportation Charge, and Supply Reliability Charge. The MWD & CWA charge is based on the size of the water meter(s) in service with the exception of upsizing the meter for individually metered residential fire service, as described in Section 38.03 of the Code. The MWD & CWA charge shall start upon installation of the meter. C.Monthly Fixed System Charges Each water service customer shall pay a monthly fixed system charge, as set forth in Appendix A, 25.03 C. Proceeds of the charge will be used to pay for water system replacement, maintenance, and operation expenses. The system charge is based on the customer class and the size of the water meter(s) in service. For individually metered residential fire service, as outlined in Section 38.03 of the Code, the size and fee would be set based on water use requirements without additional fire capacity. The system charge shall start upon installation of the meter. D.Categories of Water Service The definitions and rates and charges for water service furnished by the District shall be as follows: 1.DOMESTIC RESIDENTIAL WATER (a)Defined as: Water service for single residential and individually metered attached households as well as other domestic uses (other than that provided for in Paragraph 2.(a)). (b) Base Rate: The tiered base rates of water furnished under this category shall be set forth in Appendix A, 25.03 D.1.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.1. 2.MULTI-RESIDENTIAL WATER (a)Defined as: Master metered water service for multiple residential households, for example, duplexes, townhomes, apartments, and mobile homes. (b)Base Rate: The tiered base rates of water furnished for each dwelling unit in this category shall be as set forth in Appendix A, 25.03 D.2.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.2. 25-3 3.BUSINESS AND COMMERCIAL WATER (a)Defined as: Potable water service for commercial and industrial establishments. (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.3.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.3. 4.NON-PUBLIC IRRIGATION AND COMMERCIAL AGRICULTURE USING POTABLE WATER (a)Non-public irrigation is potable water service provided solely for irrigation of landscape or landscaping, as defined in Section 0.02 of this Code. (b) Commercial agricultural engaged in the growing or raising of livestock, in conformity with recognized practices of husbandry, for the purpose of commerce, trade or industry, or agricultural horticultural or floricultural products and produced, (i) for human consumption or for the market, or (ii)for the feeding of fowl or livestock produced for human consumption or for the market, or (iii) for feeding fowl or livestock for the purpose of obtaining their products for human consumption or for the market, such products to be grown or raised on a parcel of land having an area of not less than one acre utilized exclusively therefore. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.4.(c). (d) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.4. 5.PUBLICLY-OWNED WATER (a)Defined as: Potable water service for publicly- owned establishments and/or entities exempt from District property taxes. 25-4 (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.5.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.5. 6.PUBLIC IRRIGATION WATER (a)Defined as: Potable water service provided solely for irrigation of publicly-owned landscape or landscaping as defined in Section 0.02 of this Code and/or entities exempt from District property taxes. (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.6.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.6. 7.CONSTRUCTION WATER (a)Defined as: Potable water service for construction or for temporary purposes pursuant to Section 31 of this Code. (b)The rates for water furnished under this category is set forth in Appendix A, 25.03 D.7.(b). (c)Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.7. 8.RECYCLED WATER – NON-PUBLIC IRRIGATION, CONSTRUCTION, AND CERTAIN NON-IRRIGATION PURPOSES (a)Defined as: Non-potable and recycled water service provided for irrigation of landscaping, as defined in Section 0.02 of the Code, and certain non- irrigation purposes, other than domestic use, in compliance with federal, state, and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. 25-5 (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.8.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 9.RECYCLED WATER - COMMERCIAL (a)Defined as: Non-potable and recycled water service provided for commercial customers, as defined in Section 0.02 of the Code, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.9.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 10.RECYCLED WATER – PUBLIC IRRIGATION (a)Defined as: Non-potable and recycled water service provided for irrigation of publicly-owned landscaping, as defined in Section 0.02 of the Code, and/or entities exempt from District property taxes, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.10.(c). 25-6 (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 11.POTABLE INTERIM BUSINESS AND COMMERCIAL WATER (a) Defined as: Potable water service provided by the District on a temporary basis to business and commercial customers in Improvement District 7 (ID 7) pursuant to individual agreements. (b)If capacity fees have not been paid by the customer, the rates for water furnished under this category is set forth in Appendix A, 25.03 D.11.(b). (c)If the customer has paid equivalent capacity and annexation fees, the rates and charges for water furnished under this category shall be the rates set forth in Appendix A, 25.03 D.3.(b). (d)The applicable monthly system charge shall be the same rates charged to customers in the same category of service on a permanent meter basis per Appendix A, 25.03 C.3. (e)Conversion to Permanent Service. At such time as use expires, the customer shall be required to pay all unpaid fees in effect at the time the permanent use is implemented. 12.POTABLE INTERIM NON-PUBLIC IRRIGATION AND COMMERCIAL AGRICULTURE WATER (a) Defined as: Potable water service provided by the District on a temporary basis to non-public irrigation and commercial agriculture customers in Improvement District 7 (ID 7). (b)If capacity fees have not been paid by the customer, the rates for water furnished under this category is set forth in Appendix A, 25.03 D.12.(b). (c)If the customer has paid capacity and annexation fees, the rates and charges for water furnished under this category shall be the rates set forth in Appendix A, 25.03 D.4.(c). (d)The applicable monthly system charge shall be the same rates charged to customers in the same category of service on a permanent meter basis per Appendix A, 25.03 C.4. (e)Conversion to Permanent Service. At such time as 25-7 use expires, the customer shall be required to pay all unpaid fees in effect at the time the permanent use is implemented. 13.TANK TRUCKS (a)Defined as: Water service provided for the filling of tanks on motor vehicles transporting water used for other than earth grading purposes, which service shall be made only through a portable meter issued by the District to a customer specifically for use in accordance with the provisions herein for such service. (b)The rate for metered water furnished under this category is reflected in Appendix A, 25.03.D.13. (b), plus a monthly system charge at the rate set forth in Appendix A, 25.03 C.4. (c)Requirements for Use of Water Meter (1)To receive such service, the customer must make a deposit for the use a water meter furnished by the District. The fee is set forth in Appendix A, 31.03 A.1. (2)Upon termination of the service, the Dis- trict will refund the amount of deposit remaining after making the following deductions: (i)Cost of repairing or replacing the meter, fire hydrant and/or any fittings damaged or lost while in use; and (ii)Unpaid charges for water or other applicable charges. (3)Prior to the end of each six month period following issuance of a meter under this section, or at the request of the District, whichever is earlier, the customer shall return the meter to the District for inspection, repair, or calibration as deemed necessary by the District. (4)Payment for water service under this cate- gory shall be made as follows: (i)The bill shall be based on the amount of water actually used, which shall be determined by the District’s reading of the meter or by a report made by the customer to the District in the manner prescribed by the District. 25-8 (ii) Where the actual amount of water used cannot be determined as provided in (i), the District will issue a bill based on a District estimate of the amount of water used, as determined by the District. Such estimates shall be reconciled with actual amounts used when the customer returns the meter to the District as provided in paragraph 3 above. (iii)Payments shall be made as specified on the bill. 14.WATER SERVICE OUTSIDE DISTRICT BOUNDARIES (a)Defined as: Water service for real property outside the service area of the District. (b)This service will be provided only upon prior approval of the General Manager when there is a surplus of water over and above the existing needs for service in the District. This service is temporary and may be terminated upon written notice from the District. Customers for this service are sometimes referred to as "outside users." (c)Customers applying for this category of service shall pay an application fee as set forth in Appendix A, 25.03 D.14.(c). (d)The rate for metered water furnished under this category shall be charged the rate as described in Appendix A, 25.03 D.14.(d), plus a monthly system charge at the rate set forth in Appendix A, 25.03 C.5. (e)Customers requesting only fire service or a fire hydrant under this category shall be charged a capacity fee based on one (1) EDU for a permanent meter in the improvement district from which the fire service derives its flow, plus a monthly system charge at the rate set forth in Appendix A, 25.03 D.16.(c). 15.WATER SERVICE OUTSIDE AN IMPROVEMENT DISTRICT (a)Defined as: Water service for property located within the boundaries of the District, but not within a water improvement district. Customers for this service are sometimes referred to as "outside users." 25-9 (b)Customers applying for this service shall pay an application fee as set forth in Appendix A, 25.03 D.15.(b). The District will review the application to determine whether the land to be served should be annexed to an improvement district. If it is determined that annexation is not practical, the Board of Directors may authorize service as an outside user. This service will be reviewed periodically until it is determined that the property must be annexed to an improvement district or that service must be terminated. (c) The rate for metered water furnished under this category is as set forth in Appendix A, 25.03 D.15.(c), plus a monthly system charge as set forth in Appendix A, 25.03 C.5. (d)Upon approval of the Board of Directors, a cus- tomer, who has paid all construction costs for facilities necessary to serve the customer's property in lieu of annexation to a water improvement district, shall be exempt from the provision for this category of service. 16.SERVICE FOR FIRE PROTECTION (a)Defined as: Water service provided by the Dis- trict solely to feed fire hydrants or fire sprinkler systems from lines or laterals con- nected to District water mains. (b)The District will not make a charge for the quantity of water used for fire protection purposes. (c)The monthly system charge for this category of service is set forth in Appendix A, 25.03 D.16.(c) for each connection to a District water main made for fire protection service. 17.WATER SERVICE UNDER SPECIAL AGREEMENTS (a)Defined as: Water service provided under express agreements approved by the Board of Directors for service to golf courses and other entities, which service may be curtailed or interrupted by the District under conditions provided in such agreements. (b)For water service under this category the base rate shall be determined on a case-by-case basis. E.Energy Charges for Pumping Water 25-10 In addition to water rates and other charges provided for in this Section 25.03, customers shall be charged an energy pumping charge based on the quantity of water used and the elevation to which the water has been lifted to provide service. 1. Potable Water Energy Pumping Charge: The energy pumping charge for potable water shall be made at the rate set forth in Appendix A, 25.03 E.1. 2. Recycled Water Energy Pumping Charge: The energy pumping charge for recycled water shall be made at the rate set forth in Appendix A, 25.03 E.2. 25.04 DEPOSITS BY LESSEES OR NON-OWNERS OF PROPERTY A. AMOUNT OF DEPOSIT The customer's deposit shall be applied to reduce or satisfy any delinquent payment or other amount due the District at the time of termination of water service to the customer. Any portion of the deposit remaining, after satisfaction of the amount due, shall be refunded to the customer that made the deposit. The deposits listed per Appendix A, 25.04 A. may be waived for a new residential applicant where the applicant demonstrates credit worthiness based upon prior utility payments or a non-delinquent water account for one year or other similar evidence of credit. B. REFUND OF DEPOSIT Where funds have been on deposit for twelve months in a domestic service account and there has been no more than one delinquent payment on that account during that period, the District will apply a credit to the water account in the amount of the deposit. C. LETTER OF CREDIT A letter of credit, in a form approved by the General Manager or Department Head of Finance, may be submitted to the District to satisfy the deposit requirements. 25.05 SERVICE TO SUBSEQUENT CUSTOMERS After a water meter has been installed for a customer and all fees and charges have been paid, water service may be furnished to a subsequent customer through the water meter installed without payment of further charges, except for the set-up fee 25-11 for transferred accounts, payment of delinquent charges for the applicant's service or other deposits that may be required by this Code. 25.06 PUBLIC NOTIFICATION AND LEGAL OBJECTION PROCESS FOR RATE CHANGES California law requires that certain changes to retail water and sewer fees and charges be adopted in accordance with procedures outlined in Article XIII D, of the California Constitution, commonly referred to as “Proposition 218." Additionally, the Otay Water District has established a formal process, an exhaustion of administrative remedies procedure (“exhaustion procedure”) consistent with Assembly Bill No. 2257 (2024) (chaptered at Government Code sections 53759.1 and 53759.2). The exhaustion procedure allows ratepayers to raise legal objections regarding proposed water or sewer rate increases. This process ensures that ratepayers have an opportunity to voice legal objections to a proposed property-related fee, charge, or assessment (“fee”) for water or sewer service, and provides an opportunity for the District to address or resolve any legal objections before the Board of Directors makes a final decision on whether to adopt a proposed fee pursuant to Proposition 218. The exhaustion procedure outlined below provides a structured framework and requires ratepayers to participate in the pre- adoption legal objection process in order to preserve the legal right to bring forward any judicial action or proceeding against the District regarding the fee structure. A.GENERAL DISTRICT REQUIREMENTS PER THE EXHAUSTION PROCEDURE 1.District will notify the public of the amount of the proposed fee by way of the Proposition 218 notice mailed to all customers and/or owners of record, 2.Make the District’s written basis for the proposed fee (including any cost of service report) publicly available (including on the District’s website), 3.Provide 45 days for any ratepayer to review the proposed fee and its basis and make any legal objection, 4.Require any such objection to be in a writing to the District that specifies the grounds for alleged noncompliance with Proposition 218, and 5.Require the District to consider and respond in writing to timely submitted objections prior to the close of the protest hearing required under Proposition 218. B.BOARD ACTIONS AND PUBLIC PARTICIPATION 1.The District Board hereby adopts the exhaustion of administrative remedies procedure contained in 25-12 Government Code section 53759.1(c), as further described below. 2.In connection with the District’s consideration of water or sewer rate increases, the District Board hereby directs the staff to take the following actions: (a)Public Hearing Date. Establish a date certain for a public hearing on any proposed water or sewer rates, at which hearing the staff shall present a summary of any written legal objections from the public during the objection period and responses from staff to those objections. The Board may consider any protests to the proposed fee increases on the same or a different date, but only after considering all objections and responses. The Board may continue the hearing from time-to-time in order to provide additional time for consideration of, and responses to, any timely-submitted legal objections and/or protests. (b)Cost of Service Report. Make available to the public the written basis for the proposed fee or assessment (the “Cost of Service Report”) by: (i)posting it on the District’s website, (ii)making it available at the headquarters of the District, and (iii)mailing it to any property owner upon request. (c)Objection Period. Establish a time frame for an “objection period” of not less than 45 days between mailing of the notice described below and the public hearing, during which period the public may submit a written legal objection to any aspect of the Cost of Service Report. (d)Public Notice. Notify the public in writing of the availability of the Cost of Service Report in the notice sent pursuant to subdivision (c) of Section 4 or paragraph (1) of subdivision (a) of Section 6 of Article XIII D of the California Constitution, and include in that notice: (i)a prominently displayed statement that all written legal objections must be submitted within the written objection period and that a failure to timely 25-13 object in writing bars any right to challenge that fee or assessment through a legal proceeding; and (ii)a prominently displayed description of all substantive and procedural requirements for submitting an objection to the proposed fee or assessment; and (iii)the process for submitting protests. 3.In connection with the District’s consideration of water or sewer rate increases, the District Board will determine at the hearing: (a)Whether the written legal objections and the District’s response warrant clarifications to the proposed fee or assessment or the Cost of Service Report. (b)Whether to reduce the proposed fee or assessment. (c)Whether to further review the Cost of Service Report and proposed fee or assessment before making a determination on whether clarification or reduction is needed. (d)Whether to proceed with the protest hearing or ballot tabulation hearing required under Section 4 or 6 of Article XIII D of the California Constitution. 4.This exhaustion procedure will apply to any proposed water or sewer fees for which notice is provided pursuant to Proposition 218. 5.Pursuant to Government Code sections 53759.1 and 53759.2, a person or entity will be prohibited from bringing a judicial action or proceeding that alleges non-compliance with Proposition 218 for any new, increased, or extended fee adopted by the District, unless that person or entity has timely submitted to the District a written legal objection to that fee that specifies the grounds for the alleged non- compliance. 25.07 PROCESS TO REQUEST A VARIANCE FROM ANY APPLICABLE WATER FEES AND CHARGES A request for a variance or exception to any water-related fee or charge may be filed with the District. The request must be accompanied by photographs, drawings, or other supporting documentation, including a written statement from the applicant demonstrating that a variance or exception is justified due to unusual circumstances applicable to the property. The General 25-14 Manager, or their designee, will review and act upon the request within thirty (30) days after a completed application package has been received. The applicant requesting the variance shall be notified of the decision in writing. Any approved change will commence on the next water billing cycle. 53-1 (1) See Appendix A, Section 53 for fees, rates, and charges. SECTION 53 CONDITIONS FOR SEWER SERVICE 53.01 CONDITIONS FOR ACQUISITION OF SEWER SERVICE CAPACITY Sewer service capacity may be acquired only for service to a specific address, parcel of land, or a land development project covered by an approved map. An approved map shall mean a recorded final map, a recorded parcel map or a tentative sub- division map that has been approved by the County or by a City, as applicable. A.District Acceptance of Sewer Facilities for Russell Square Area - Under an Agreement with Cal Dorado Development, Inc., dated June 28, 1981, the District accepted title to a sewer pump station, force main and appurtenances for a sewage system to provide sewer service to the residential dwelling units to be constructed within the parcels of land in San Diego County Tentative Parcel Map 17150. Under an Agreement with Cal Dorado Development, Inc., dated June 18, 1981, the District agreed to provide service to such parcels on the terms and conditions contained therein. On October 1, 1984, pursuant to Resolution No. 2139, the District Board of Directors accepted title to the facilities. 53.02 SERVICE AREAS Sewer service shall be furnished by the District only to property located in Improvement District No. 18 (ID 18) and the Russell Square Sewer Service Area. Sewer service to property located outside such areas may be furnished only upon annexation to ID 18 and payment of all applicable annexation fees. (See Appendix A, Section 9) A.Designation of Russell Square Sewer Area - The geographical area described on the District Map entitled "Russell Square Sewer Service Area," dated October 11, 1988, on file with the District Secretary, constitutes the Russell Square Sewer Service Area. 53.03 ACQUISITION OF SEWER CONNECTIONS FOR SERVICE Effective October 1, 2014, two separate sewer capacity fees have been established to ensure sewer customers do not pay for facilities twice. The first capacity fee applies to parcels within an ID that paid prior tax debt. The second capacity fee applies parcels outside an ID that have not paid the tax debt. The sewer capacity fees shall constitute the "base rate." For fees or charges after June 7, 2017, the base rate shall be adjusted on the first day of each calendar quarter for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 11,555.03 Exhibit 2b 53-2 (1) See Appendix A, Section 53 for fees, rates, and charges. (as of April 1, 2017) shall be deemed the "base index." The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from April 1, 2017 to the date of payment. 1. Sewer Capacity Fee within an ID All new sewer connections for parcels within a sewer ID shall pay a capacity fee (1) for each Equivalent Dwelling Unit (EDU) of sewer service provided. The capacity fee is due at the time an application for sewer service is requested. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. 2. Sewer Capacity Fee outside an ID All new sewer connections for parcels not within a sewer ID (requiring to be annexed into a sewer ID18 per Code Section 9.04 C.) shall pay a capacity fee (1) for each Equivalent Dwelling Unit (EDU) of sewer service provided. The capacity fee is due at the time an application for sewer service is requested. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. B. Russell Square Pump Station 1. Sewer Connection Fee A connection fee (1) for each Equivalent Dwelling Unit (EDU) of sewer service provided through Russell Square Pump Station shall be collected. The connection fee is due at the time an application for sewer service is submitted. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. The connection fee shall be used by the District solely for the maintenance, repair or replacement of the Russell Square Pump Station. (a) Exempt Parcels - The connection fee shall not apply to connections for sewer service to the parcels within the Tentative Parcel Map 17150. Such exempt parcels are currently identified as Assessor Parcel Nos. 497-011-41, 497-011-42, 497- 011-44, 497-011-46 and 497-011-47. 2. Monthly Sewer Service Charge A monthly sewer service charge (1) to cover normal operational costs of the Russell Square Pump Station and force mains shall be collected. This charge shall be reviewed by the Board of Directors from time to time to assure that such charges cover the costs for operation of the sewer facilities. 53-3 (1) See Appendix A, Section 53 for fees, rates, and charges. In addition, the customer for such service shall pay the monthly service charge (1) for sewer service set forth in Section 53.10 A and B of the Code. 53.04 CHARGES FOR INSTALLATION OF SEWER LATERALS Upon application for construction of one or more sewer laterals, the customer shall deposit with the District the estimated costs to be incurred by the District in connection with the instal- lation of the facilities required, as determined by the District. Upon completion of the work, the District shall calculate the actual costs incurred by the District in performing the work. If actual costs are less than the amount deposited, the District shall refund the balance of the deposit to the customer. If actual costs exceed the amount deposited, the customer shall reimburse the District for the additional costs. 53.05 PAYMENT OF FEES All fees prescribed in the Code shall become owing, due and payable at the time application is made to connect a premise to the sewer system of the District. The fees shall be paid to the District prior to the issuance of any permit authorizing the connection of such premise to the District sewer system. If the proposed connection cannot be made, the fee may be refunded when approved by the General Manager. 53.06 SEWER SERVICE USE CHANGES RESULTING IN INCREASED SYSTEM UTILIZATION The use of a sewer connection shall be limited to the type and number of EDUs authorized by the original wastewater discharge permit. Before adding any additional equivalent dwelling units, buildings, modifying existing buildings, or change of occupancy type, the property owner shall make a supplementary wastewater permit application to the District for such change in use and pay additional sewer annexation fees per EDU, if necessary, as may be applicable. Periodic inspection of the premises may be made by the District and if actual use is greater than estimated use, an assessment for additional annexation fees shall be assessed. (1) 53.07 WASTEWATER DISCHARGE PERMIT ISSUANCE AND LIMITATION A. A wastewater discharge permit shall be required for any property for which a request is made to discharge into the District sewage system. B. Every wastewater discharge permit shall expire by limitations and shall become null and void, if the construction or work authorized by such permit is not commenced within 120 days from date of issuance of such 53-4 (1) See Appendix A, Section 53 for fees, rates, and charges. wastewater discharge permit or if the construction or work authorized by such wastewater discharge permit is suspended or abandoned for a period of 120 days at any time after the work is commenced. C. Before such work can be recommenced, a new wastewater discharge permit application must be filed with the District. The District may reactivate the previous wastewater discharge permit provided that wastewater quantity and type is the same as the wastewater discharge allowed under the original permit, and provided further that such suspension and abandonment has not exceeded one year. Fees paid for the previous wastewater discharge permit may be credited toward the total permit fees required on the new permit application. Reactivation of the previous wastewater discharge permit shall be subject to District sewer capacity being available at the time of new application and subject to any additional costs or charges imposed during the period of such suspension or abandonment. 53.08 BASIS FOR DETERMINATION OF EQUIVALENT DWELLING UNITS (EDUs) The number of EDUs for sewer service shall be determined on the following basis: A. Residential Facilities EDUs Description 1 ▪ Single-family residence (Includes manufactured homes and mobile homes which are on private lots.) ▪ A secondary structure with a kitchen is considered an additional EDU ▪ Each individual living unit in apartments, multi- family housing and residential condominiums ▪ Each individual space in mobile homes and trailer Parks 53-5 (1) See Appendix A, Section 53 for fees, rates, and charges. B. Commercial/Industrial Facilities 1. Food Service Establishments EDUs Description 3 ▪ Take-out restaurants with disposable utensils, no dishwasher and no public restrooms ▪ Take-out restaurants with disposable utensils, no dishwasher and no public restrooms ▪ Miscellaneous food establishments – ice cream shops, yogurt shops, bakeries (sales on premise only) ▪ Take-out/eat-in restaurants with disposable utensils, but with seating and public restrooms ▪ Restaurants with reusable utensils, seating and public restrooms (0-18 seats) o Add 1.0 EDU for each additional 6 seat unit, or portion thereof 2. Hotels and Motels EDUs Description .38 Per living unit without kitchen .60 Per living unit with Kitchen 3. Commercial, Professional, Industrial Buildings and Establishments not specifically listed herein EDUs Description 1.2 For first 1,000 square feet AND +0.7 For each additional 1,000 square feet or portion thereof Applies to any office, store or industrial condominium or Establishments 1.2 +0.7 For first 1,000 square feet AND For each additional 1,000 square feet of gross building floor area. Portions less than 1,000 sq. ft. will be prorated. Applies to situations where the occupancy type or usage is unknown at the time of application for service. This shall include, but not be limited to, shopping centers, industrial parks and professional office buildings. 1.0 Self-service laundry per washer 53-6 (1) See Appendix A, Section 53 for fees, rates, and charges. 4. Convalescent Homes EDUs Description 0.7/bed Skilled nursing care facilities, psychological hospitals, convalescent hospitals; licensed by the applicable Governmental Agency. 0.5/bed Community Care Facilities with 16 or more beds licensed by the applicable Governmental Agency. 1.0 Community Care Homes with six or fewer total residents, including resident staff and housekeepers (to be the same EDU as a single family residence). C. Other commercial, industrial and other types of business establishments not included in 53.08 B.1 through 53.08 B.4 If the establishment is not included in 53.08 B.1 through 53.08 B.4 or if the EDUs specified in 53.08 B.1 through 53.08 B.4 are not representative of actual flow due to the number of employees or type of operation, the number of EDUs shall be determined in each case by the list of commercial strengths as defined by the State Water Resources Control Board (SWRCB) or by the General Manager and shall be based upon the estimated volume and type of wastewater discharge into the sewer. Examples of commercial, industrial and other business establishments include, but are not limited to, bottling works, supermarkets, markets, deli/markets, convenience stores, hospitals, laundries (other than self-service laundries), automobile service stations, mortuaries, day- care centers, bars and pool halls. 53.09 TRANSFER, ASSIGNMENT, OR RESALE OF SEWER CONNECTION RIGHTS EDU sewer connection rights obtained by a customer may not be sold, transferred, or assigned separately from ownership of the real property for which they were obtained, unless otherwise stated in an agreement with the District. 53.10 DEFINITIONS OF RESIDENTIAL AND MULTI-RESIDENTIAL SEWER SERVICE RATES, CHARGES AND FEES All District sewer rates, charges, and fees are subject to Board approval of rate increases to residential and multi-residential sewer services billed on or after January 1, 2021 and may apply to sewer services as early as the beginning of December 2020 and periodically thereafter through December 31, 2025. The increases shall be the amount sufficient to cover cost increases 53-7 (1) See Appendix A, Section 53 for fees, rates, and charges. related to operation and maintenance, but not to exceed 10% per year. Five-year Periodic Pass-through Rate Increases or Decreases from District Wholesalers - All District sewer rates, charges, and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2021 through December 31, 2025. Set-up Fees for Accounts - A set-up fee (1) shall be charged for each account transferred to another customer. Three-year Winter Average - Sewer rates shall be based on the average of the customer’s “Three-Year Winter Average” water consumption, measured in units of hundred cubic feet (HCF). The winter average period is January through April. The three-year winter average is calculated by adding the four months of water consumption and dividing the resulting amount by four for each of the preceding three years and then taking the average of those three years. This average is then reduced by a 15% usage discount, recognizing that not all water used flows into the sewer system. The sewer rate is multiplied by the “Three-Year Winter Average” calculation for each customer (after the above noted 15% discount) and this amount is added to the monthly fixed sewer system charge applicable to the size of meter. The resulting amount shall be charged on a monthly basis and fixed for an entire calendar year, until a new “Three-Year Winter Average” is determined for the following year. The sewer rate is multiplied by the “Three-year Winter Average” calculation for each customer (after the above noted 15% discount) and this amount is added to the monthly fixed sewer system charge applicable to the size of meter. The resulting amount shall be charged on a monthly basis and fixed for an entire calendar year, until a new “Three-year Winter Average” is determined for the following year. (1) A. Residential Rate Charges 1. Defined as: Sewer service for individually metered residential households. 2. The monthly sewer bill is calculated by adding the system charge plus the sewer rate as described in Section 53.10 above. 3. The maximum “Three-year Winter Average” for individually metered residential customers is 30 units (after the 15% discount). 4. Monthly Residential Sewer Charges without three years of Consumption History: The average residential sewer rate shall be determined by calculating the total monthly sewer rate for all residential customers and dividing it 53-8 (1) See Appendix A, Section 53 for fees, rates, and charges. by the number of residential customers. The monthly average residential sewer rate is then added to the monthly fixed sewer system charge which shall then be used to determine the total monthly amount for residential customers with less than three months of winter usage, customers using well water or other unmetered water. New customers with less than three years of history but more than three months of winter usage in any given year, will have their “Three-Year Winter Average” determined by the average of the winter water usage for the total number of years they have been customers of record.(1) B. Multi-Residential Rate Charges 1. Defined as: Sewer service for master metered water service for multi-residential households including for example; duplexes, townhomes, apartments, and mobile homes. 2. The monthly sewer bill for the complex is calculated by adding the monthly fixed sewer system charge based on meter size, plus the sewer rates multiplied by the three-year winter average, for the entire complex. (1) Note: There is no cap on consumption for multi- residential customers. 3. Monthly Multi-Residential Sewer Charges without Consumption History: The multi-residential sewer rate shall be determined by calculating the total monthly sewer rate for all multi-residential customers and dividing it by the number of multi-residential dwelling units. The monthly sewer rate per dwelling unit is multiplied by the new customer’s number of dwelling units and this shall be added to the monthly fixed sewer system charges, based on meter size, to determine the monthly rate. This is applicable to new complexes that do not have a prior winter consumption history.(1) New multi-residential customers with less than three years of history but more than three months of winter usage in any given year, will have their “Three-Year Winter Average” determined by the average of the winter water usage for the total number of years they have been customers of record. 53.11 DEFINITIONS OF COMMERCIAL AND INDUSTRIAL SEWER SERVICE RATES, CHARGES AND FEES All District sewer rates, charges, and fees are subject to Board approval of rate increases to commercial and industrial sewer services billed on or after January 1, 2021 and may apply to sewer services as early as the beginning of December 2020 and periodically thereafter through December 31, 2025. The 53-9 (1) See Appendix A, Section 53 for fees, rates, and charges. increases shall be the amount sufficient to cover cost increases related to operation and maintenance, but not to exceed 10% per year. Five-year Periodic Pass-through Rate Increases or Decreases from District Wholesalers - All District sewer rates, fees, and charges, are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2021 through December 31, 2025. Set-up Fees for Accounts - A set-up fee (1) shall be charged for each account transferred to another customer. Average Annual Consumption - The Average Annual Consumption, measured in units of hundred cubic feet (HCF). The annual consumption period is January through December of the preceding year divided by the number of months of consumption. This average is reduced by a 15% usage discount which recognizes that not all water used flows into the sewer system. Sewer Rate - The rate (1) is determined by the commercial customer’s sewer strength category in which they are assigned (low strength, medium strength or high strength). Monthly Fixed Sewer System Charges - The monthly fixed sewer system charge is determined by the commercial customer’s water meter size. (1) Strength Factor - The State Water Resources Control Board (SWRCB) has grouped commercial customers into various categories and has identified Strength Factors for each of these business categories. The standard of measure for Strength Factors is the typical sewer strength of a single‐family residence which has strength factor of 1. A. Commercial Rate Charges 1. The monthly sewer bill for commercial sewer customers is calculated by multiplying the average annual consumption, reduced by 15%, by the sewer rates based on strength plus the monthly fixed sewer system charges based on the customer’s water meter size. (1) 2. For new commercial sewer customers without consumption history, staff shall make a determination of the average annual consumption to be used until a year’s consumption data can be collected. The determination shall be based on the prior owner or tenant of the sewer connection, or based on the most similar type of current business operation. If the customer does not agree with staff’s recommendation, the customer may request an adjustment in writing, and direct it to the General Manager. 53-10 (1) See Appendix A, Section 53 for fees, rates, and charges. B. Industrial and Other Users 1. Charges determined by the Board of Directors on a case-by-case basis. Monthly fixed sewer system charges shall commence upon installation of the water meter to serve the premises receiving the sewer service, upon connection to the District sewer system, upon start of occupancy of the premises to be served, or one year after the date the application for sewer service is filed. If a sewer service connection has been obtained and if sewer service will not be used until sometime after installation of the water meter, commencement of the sewer system charge may be deferred until the later date only upon prior approval of the General Manager. C. Commercial User Classifications Commercial sewer service customers are subject to periodic inspection of the premises by the District for verification of proper sewer strength classification. In addition to such periodic inspections, strength classifications will be reviewed periodically, at the discretion of the District. If warranted following a periodic inspection, periodic classification review, or a change in the nature of a customer’s business and/or use of the property, customers may be reclassified to reflect their current business operations and proper sewer strength, at the discretion of the District and consistent with the standards set forth herein and in the State Water Resources Control Board (SWRCB) listing for sewer strength. 1. Low-Strength Commercial = 1.0 Strength Factor Car wash General office and buildings Barber and beauty shops Department, retail stores and general commercial Hospitals and convalescent homes Public Laundromats and dry cleaners Professional office or office building Warehouse Bars without dining facilities Churches Schools (Elementary, junior & High Schools, Colleges) Other uses having a similar strength as determined by the District 2. Medium-Strength Commercial = 2.0 Strength Factor Hotels without dining facilities or cooking facilities 53-11 (1) See Appendix A, Section 53 for fees, rates, and charges. Auto repair/sales shop and service station Shopping centers Other uses having a similar strength as determined by the District 3. High-Strength Commercial = 4.0 Strength Factor Bakery or bakery with deli Hotel with dining facilities Restaurants and bars with food Grocery stores with onsite butcher and/or bakery Other uses having a similar strength as determined by the District 53.12 ISSUANCE AND PAYMENT OF SEWER BILLS A. Issuance of Statements: Statements for sewer service or other charges will be mailed monthly or as soon as practical, after the applicable charges have been determined. B. Due Date: Each statement issued by the District for such charges shall be due and payable on the date of mailing or other presentation to the customer. C. Final Payment Date: All charges in each statement must be paid on or before the final payment date shown on the statement, which shall be at least 20 calendar days following the date of mailing or presentation of the statement. D. Place of Payment: Payments shall not be credited to a customer’s account until cash, check, credit card, draft, electronic funds transfer, money order or any other acceptable form of payment that will be honored by the bank has been received by the District at the District business office during regular office hours. Deposit of payment in the mail or at a location other than the District business office shall not be credited to a customer’s account until received at the business office. E. Returned Check Charges: A returned payment charge (see Appendix A, Section 34 for charge) shall be added to a customer’s account in each instance where payment has been made to the District with a check, draft, credit card or any other acceptable form of payment that has not been honored upon presentment to the bank upon which it is drawn. 53.13 DELINQUENT ACCOUNTS A. Requirement of Deposit Due to Repeated Delinquencies: If payments on a customer account have become delinquent five or more times, the General Manager, Chief Financial Officer, or any person delegated by the General Manager, shall be 53-12 (1) See Appendix A, Section 53 for fees, rates, and charges. authorized to require the customer to make a deposit with the District, in cash or any other form satisfactory to the General Manager. The deposit amount shall be established at the discretion of the General Manager and the Chief Financial Officer, but shall not exceed two times the highest bill during the twelve (12) months preceding the date of demand for a deposit. B. Handling of Deposit: A deposit shall not earn interest and shall only be applied to reduce or satisfy amounts due the District in the event of termination of service. A deposit does not constitute payment for service bills and the customer shall be required to comply with bill payment requirements to continue receiving service. C. Refund of Deposit: A deposit required under this Section shall be refunded to the customer as provided in Section 25.04 B of the Code. 53.14 PROCESS TO REQUEST A VARIANCE FROM ANY APPLICABLE SEWER FEES AND CHARGES A request for a variance or exception to any sewer-related fee or charge may be filed with the District. The request must be accompanied by photographs, drawings, or other supporting documentation, including a written statement from the applicant demonstrating that a variance or exception is justified due to unusual circumstances applicable to the property. The General Manager, or their designee, will review and act upon the request within thirty (30) days after a completed application package has been received. The applicant requesting the variance shall be notified of the decision in writing. Any approved change will commence on the next sewer billing cycle. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: July 2, 2025 SUBMITTED BY: Andrea Carey, Customer Service Manager PROJECT: P2662 DIV. NO.All APPROVED BY: Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Award a Professional Services Agreement to E Source Companies LLC, and Authorize the General Manager to Execute an Agreement with E Source Companies LLC for Project Management Services for the Meter Changeout Project for Fiscal Years 2026 through 2031, in an Amount Not-to-Exceed $808,575 GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award a professional services agreement to E Source Companies LLC, and authorize the General Manager to execute an agreement with E Source Companies LLC for project management services for the Meter Changeout Project for Fiscal Years 2026 through 2031, in an amount not-to-exceed $808,575. COMMITTEE ACTION: See Attachment A. PURPOSE: To obtain Board approval for the General Manager to enter into an agreement with E Source Companies LLC for project management services for the Meter Changeout Project for Fiscal Years 2026 through 2031, in an amount not-to-exceed $808,575. BACKGROUND: On January 8, 2025, the Board approved for the General Manager to enter into an agreement with Badger Meter, Inc. for the purchase and installation of water meters and endpoints as part of a District-wide meter changeout program scheduled to span the next six years. This project will include the installation of ¾-inch to 2-inch water meters and a cellular Automated Metering Infrastructure (AMI). AGENDA ITEM 5 ANALYSIS: Given the scope, scale, and duration of the project, the District requires the services of a project management firm to provide project management services, software integration oversight, business process design, and field quality control assistance. Understanding the complexity of the overall project, the District solicited services from consulting firms with experience overseeing similar projects. The scope of the services is focused on two main components: Project Management and Solution Integration. Project management services include managing communications between all parties involved in the project, ensuring the project meets all necessary timeline milestones, developing field verification protocols, and ensuring the project stays on budget. Solution integration services include ensuring successful integration of the AMI system with all other District applications, testing and validating the data being integrated, and working with District staff to update or create business processes in response to this new technology. A Request for Proposal (RFP) was advertised on April 25, 2025, on the District’s website and through the District’s online bid solicitation platform, PlanetBids. Proposals were due on May 15, 2025, at which time the District received four proposals from the following firms: • Carolla Engineers, Inc. • E Source Companies LLC • Force 77 Engineering and Consulting • Zicali, Inc. A five-person review panel evaluated these proposals, scoring each firm’s experience, qualifications, and project approach. The panel then interviewed the top two firms on June 4, 2025. E Source Companies LLC (E Source) received the highest score based on their extensive experience with similar projects, comprehensive understanding of the scope of work, and methodology to perform the services required. A summary of the complete evaluation is shown in Attachment B. E Source was previously selected as the consultant to assist with the procurement and contract negotiation phase of the project. Staff has been very pleased with their work performance and believes that the continuity of their involvement during the implementation phase will be valuable to the project overall. E Source has extensive experience performing similar services to water districts across the country, including many in California. Notable recent meter projects include collaborations with the City of Palo Alto, City of Oceanside, and the City of Santa Ana. Reference checks were completed by staff and all references rated their performance as excellent. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The total budget for the Potable Meter Change Out CIP P2662, as approved in the FY 2026 budget, is $31,645,000. Based on a review of the financial budgets, the Project Manager anticipates that the budget for CIP P2662 is sufficient to support the project. The Finance Department has determined that, under the current rate model, 100% of the funding will be available from the Replacement Fund. STRATEGIC GOAL: Practice ongoing infrastructure renewal and organizational improvement through planning and increased operational efficiency. LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B – Project Management Evaluation ATTACHMENT A SUBJECT/PROJECT: Award a Professional Services Agreement to E Source Companies LLC, and Authorize the General Manager to Execute an Agreement with E Source Companies LLC for Project Management Services for the Meter Changeout Project for Fiscal Years 2026 through 2031, in an Amount Not-to-Exceed $808,575 COMMITTEE ACTION: NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for board approval. This report will be sent to the Board as a committee approved item, or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full board. Firm’s experience with similar projects Qualifications & experience of the personnel assigned to this project Project approach & understanding Individual Subtotal Average Technical Score Fee Score Total Score Team Presentation & Communication Strength of the Project Manager & Team Implementation & Integration Strategy Problem-Solving & Change Management Value-Added Expertise & Lessons Learned Individual Subtotal Average Interview Score Grand Total Score Maximum Points 30 25 30 85 85 15 100 10 10 10 10 10 50 50 150 Evaluator 1 22 19 23 64Evaluator 2 25 21 26 72 Evaluator 3 26 22 27 75 Evaluator 4 22 21 24 67 Evaluator 5 21 18 21 60 Evaluator 1 30 24 28 82 9 10 9 10 10 48 Evaluator 2 28 24 28 80 10 10 10 9 10 49 Evaluator 3 28 23 28 79 9 10 9 9 10 47 Evaluator 4 28 25 29 82 9 10 9 9 10 47 Evaluator 5 26 21 26 73 9 9 8 8 8 42 Evaluator 1 9 9 5 23 Evaluator 2 17 15 22 54 Evaluator 3 18 14 18 50 Evaluator 4 5 5 5 15 Evaluator 5 9 9 15 33 Evaluator 1 25 19 28 72 6 7 8 7 8 36 Evaluator 2 22 20 24 66 7 7 8 8 7 37 Evaluator 3 28 23 28 79 8 8 9 7 8 40 Evaluator 4 26 23 27 76 6 7 8 7 6 34 Evaluator 5 23 19 23 65 5 6 7 7 5 30 Firm NTE Total Fee Carollo Engineers, Inc.$2,353,600 E Source Companies LLC $808,575 Force 77 Engineering and Co $1,428,960 Zicali, Inc.$788,970 122.0035.40 Not Interviewed44.00 86.60 Force 77 Engineering and Consulting 35.00 9 Zicali, Inc.71.60 15 15 140.80 Evaluation Score SummaryProject Management Services for Meter Changeout/AMI Project RFP #FY25-2342-0425 Carollo Engineers, Inc. E Source Companies LLC 67.60 79.20 46.6094.20 Technical Score Not Interviewed68.60 Interview Score 1 Attachment B 1 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: July 2, 2025 PROJECT: Various DIV. NO. ALL SUBMITTED BY: Michael Kerr Information Technology Manager APPROVED BY: Adolfo Segura, Chief of Administrative Services Jose Martinez, General Manager SUBJECT: REDUCE CIP P2718 FROM $1,675,000 TO $945,120 AND AWARD A CONTRACT TO SPRYPOINT SERVICES, INC. TO REPLACE THE DISTRICT’S UTILITY BILLING AND CUSTOMER INFORMATION SYSTEM IN AN AMOUNT NOT-TO- EXCEED $2,674,288 GENERAL MANAGER'S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) authorize the General Manager to enter into a contract with SpryPoint Services, Inc. (SpryPoint), a Canadian Corporation, in an amount not-to- exceed $2,674,288 for the acquisition and implementation of a Utility Billing (UB) and Customer Information System (CIS) software solution to include software licensing, implementation services, data conversion, training, post-implementation support, five (5) years of maintenance, and authorize an enterprise Software-as-a-Service (SaaS) agreement to support the delivery of conversion to a cloud-based UB and CIS solution. COMMITTEE ACTION: Please see "Attachment A". PURPOSE: To obtain Board authorization for the General Manager to negotiate and award (1) a contract with SpryPoint for the purchase of license fees and implementation services for UB and CIS software, and (2) adoption of a cloud-based UB solution through an Enterprise Software-as-a-Service (SaaS) agreement, including all related maintenance, support, and training services. AGENDA ITEM 6 2 BACKGROUND: The new UB and CIS replaces the 20-year-old existing system, which no longer offers formal support, modern capabilities, or flexibility required to meet current and future UB and customer service needs. As the primary interface with nearly every District customer, the UB system is essential to delivering services, fostering public engagement, and ensuring reliable revenue collection. Each year, it generates more than 660,000 bills across the District’s three primary service areas: potable water, recycled water, and sewer; resulting in over $120 million in revenue that directly supports core operations. ANALYSIS: On September 6, 2023, the Board adopted the Tyler Technologies (Tyler) system to replace the District’s 20-year-old platform. Tyler’s Enterprise ERP (EERP) service purchase includes core financial operations, with modules for Accounting, General Ledger, Budgeting, Human Capital Management, and Licensing and Permitting, but does not include the UB module. During that meeting, staff highlighted specific challenges related to the Munis UB module and discussed the potential need for an external UB solution due to identified limitations. Following a comprehensive assessment, staff confirmed that the Munis UB module lacks the flexibility and features necessary to effectively support the District’s complex billing structures and customer service expectations. At the March 5 Board meeting, staff provided an update on the UB system upgrade and presented two potential paths forward: pursuing extensive customization of the Munis UB module or adopting a third-party solution. After further analysis, staff concluded that the level of customization required to adapt Munis’ UB system would add significant complexity and long-term cost, while still falling short of fully addressing the District’s operational needs. In contrast, a third-party UB system offers a more viable and sustainable alternative, with built-in capabilities designed to meet the District’s unique billing and customer engagement requirements. At that time, the Board was advised that staff would return with a final recommendation based on a detailed evaluation. That analysis is now complete. 3 Custom Enhancements to Tyler’s EERP UB Module As part of the evaluation process, staff assessed the feasibility of enhancing Tyler’s UB module to meet the District’s needs. It became clear that meeting the District’s requirements would require extensive custom development. Tyler confirmed that essential functions, including flexible rate management, real-time usage data access, and efficient billing processes, are not available as standard features and would require costly and complex enhancements. To gain additional insight into this option, staff conducted a comprehensive review that included consultations with other agencies currently using the Tyler UB solution. While these agencies acknowledged certain limitations, they noted that their rate structures were generally simpler and more standardized than those of the District. Taking this feedback into account, along with staff’s analysis and understanding of the District’s operational requirements, a heavily customized solution was deemed impractical due to substantial long-term operational costs and system risks. Evaluation of a Third-Party UB Solution In parallel with the above, staff initiated a comprehensive market evaluation to identify alternative UB systems better aligned with the District's operational needs. Over an 18-month period, this process included the issuance of a Request for Information (RFI), which helped refine key priorities and technical considerations. Following Policy 21, on January 23, 2025, the District issued a Request for Proposals (RFP) for a Utility Billing Software System, which was advertised on the District’s website and through its online bidding portal, PlanetBids. A total of 15 proposals were received by the February 26, 2025, deadline, with two determined to be non-responsive. A cross-departmental evaluation panel conducted a structured review of all 13 responsive proposals, using clearly defined criteria including each vendor’s relevant experience, implementation methodology, ability to meet functional requirements, system support and maintenance capabilities, and overall pricing. Based on these initial evaluations, the top five vendors were invited to participate in a second phase, which included live system demonstrations and follow-up interviews. Vendors were informed in advance that these sessions would be scored using pre- established evaluation criteria. During this phase, the staff panel performed detailed assessments, posed targeted questions, and evaluated how well each solution aligned with the District’s operational needs. Staff narrowed the list of potential vendors between Advanced Utility Systems (Advanced) and SpryPoint. Based on the evaluation results, two vendors, Advanced and SpryPoint, were identified as finalists. To support 4 the final selection process, staff requested supplemental demonstrations, additional discussions, and best and final offers from both vendors. SpryPoint emerged as the highest-ranked finalist, demonstrating strong alignment with the District’s technical and operational needs. The platform includes built-in functionality to support complex rate structures, a modern user interface, and an integrated self-service module that enables customers to independently access usage data, billing history, and service requests. These features address current limitations in the District’s existing system, where such information must be provided manually by staff. Enhancing self-service functionality will help reduce the volume of routine customer service inquiries and improve overall staff efficiency. As a result, the upgraded system will enable the reallocation of staff time and facilitate a broader review of existing job roles and responsibilities, helping to strengthen operational continuity. In contrast, the proposal from Advanced relies on third-party applications for core components such as the customer portal and mobile access. This approach may present integration and support challenges, particularly in areas such as long-term maintenance and system updates. Reference checks for Advanced also identified concerns related to delayed resolution of issues, limited product knowledge among support personnel, and insufficient training resources. While Advanced is an established vendor, its proposed solution is relatively new and lacks the level of built-in functionality and administrative efficiency demonstrated by SpryPoint. RECOMMENDATION: Based on the evaluation panel’s scoring (Attachment B), SpryPoint received the highest overall score. As a result, staff recommends SpryPoint’s UB and CIS solution as the replacement for the District’s existing UB system. During the demonstration phase and reference checks, SpryPoint presented detailed information on its experience, which includes more than 80 utility system implementations across North America, with most completed within the past five years. Feedback from peer agencies, including Coachella Water District, Modesto Water District, Placer County, CA, and City of Aurora, CO, demonstrated SpryPoint’s proven ability to deliver timely, effective system deployments and to achieve measurable gains in customer service, billing accuracy, and overall operational efficiency. Proposed Project Timeline The project timeline outlines a phased approach to the ongoing ERP 5 implementation, detailing the proposed timelines and completion dates for each phase, with a specific focus on the new UB and CIS solution. Begin Phase Completion Module Go-Live Deliverables Jan 2024 Jan 2025 Financial Jan 2025 Chart of Accounts, General Ledger, Accounts Receivable, Purchasing (Completed) Oct 2024 Oct 2025 HRM/Payroll Oct 2025 Human Resources, Employee Records, Benefits (Ongoing) Oct 2025 April 2027 UB/CIS April 2027 Utility Billing, Customer Information System Jan 2026 Jan 2027 Permitting Jan 2027 Licensing, Permitting, and Inspections FISCAL IMPACT: Joe Beachem, Chief Financial Officer The total budget for CIP P2718, as approved in the FY2026 budget, is $1,675,000. Staff recommends reducing this amount to $945,120. The approved FY2026 budget includes funding to cover the ongoing annual maintenance costs associated with the new system. While the scope of the project was defined during the initial RFP process, staff anticipated higher implementation costs given the complexity typically associated with UB systems and based on industry benchmarks. As a result, a conservative budgeting approach was used to ensure sufficient funding for all project needs and to account for unforeseen costs. With vendor selection and cost negotiations complete, the final implementation cost is lower than initially projected. The total cost of purchasing and transitioning to SpryPoint’s UB and CIS complete, cloud-based solution over the initial five-year term amounts to $2,674,288, as detailed below: Utility Billing & Customer Information System Budget CIP Operating 5-Year Maintenance and Support $1,684,368 Training $44,800 Sub-Total $1,729,168 Implementation, Data Conversion, Project Mgmt $799,200 Contingency (10%) $79,920 Travel (Bill as Incurred) $66,000 Sub-Total $945,120 Total Request $2,674,288 6 Operations: $1,729,168 Annual Maintenance, Support, and Training: This fee includes five (5) years of ongoing maintenance and support for the new UB system, along with vendor-provided training throughout the implementation phases. Annual maintenance costs have been, and will continue to be, incorporated into the District’s operational budget. The FY2026 budget includes funding for the first year of post go-live support. Future maintenance and support costs will be planned and budgeted in accordance with the terms outlined in SpryPoint’s contract. Capital Expenses: $945,120 This fee covers all implementation-related costs, including data conversion, system implementation, project management, vendor travel, and a contingency allowance to address unforeseen project needs. A combination of CIP and Operational budgets will fund the total estimated project cost, plus five years of annual support and maintenance of $2,674,288. The Finance Department has determined that, under the current rate model, 100% of the maintenance and training is included in the 6-year expenditure forecast, and 100% of the funding for CIP P2718 is available from the Replacement Fund. STRATEGIC GOAL: This project aligns with the strategic objective of enhancing operational effectiveness by completing the evaluation and upgrade of the District's financial management system through the implementation of new technologies. LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – Evaluation Panel's Scoring Attachment C – PowerPoint Presentation 7 ATTACHMENT A SUBJECT/PROJECT: REDUCE CIP P2718 FROM $1,675,000 TO $945,120 AND AWARD A CONTRACT TO SPRYPOINT SERVICES, INC. TO REPLACE THE DISTRICT’S UTILITY BILLING AND CUSTOMER INFORMATION SYSTEM IN AN AMOUNT NOT-TO-EXCEED $2,674,288 COMMITTEE ACTION: This item was presented to the Finance and Administration Committee at a meeting held on June 18, 2025. The Committee supports presentation to the full Board. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for Board approval. This report will be sent to the Board as a committee approved item or modified to reflect any discussion or changes as directed by the committee prior to presentation to the full Board. ATTACHMENT B July 2, 2025 Utility Billing and Customer Information System Replacement ATTACHMENT C April 2004 – September 2024 [September 6, 2023] March 5, 2025 – Update on the UB system upgrade Replace a 20-year-old system at end-of-life Address limitations in financial and billing processes Support critical functions: Accounting, Budgeting, Human Capital Management, Permitting & Licensing, Utility Billing Vendor Selected: Tyler Technologies/Eden Background - Enterprise Resource Planning (ERP) System Exploration of Solutions Considered two paths: third-party integration or customization Extensive research conducted over the past 18 months Request for Information (RFI) issued to assess vendor capabilities Formal Request for Proposal (RFP) to solicit competitive bids Third-Party UB System •Advanced features for detailed water usage tracking •Enhanced customer experience with modern tools •Special rate- structure billing options available Custom Development •Enhancing the Tyler EERP UB module through custom development •Potential to tailor solutions to the District's specific needs •Balancing between integration and customization Evaluation Process Request for Proposal (RFP) conducted Thirteen Responsive Proposals Received Firm’s Relevant Experience (15pts) Implementation approach (25pts) Functional Requirements (20pts) Support and Maintenance (20pts) Pricing (20pts) Top five vendors invited for live demonstrations Overall Product & Team Demonstration (10pts) Functionality of Software (30pts) Implementation/Support/Training (10pts) Two finalists advanced to second-round demonstrations, follow-up Q&A, reference checks, and best and final offers Advanced Utility Systems SpryPoint Services, Inc. 360S2G (San Francisco, CA) Advanced Utility Systems (Ottawa, Canada) Cayenta (Vancouver, Canada) NorthStar Utilities Solutions (Ottawa, Canada) SpryPoint (Charlottetown, Canada) Project Cost Utility Billing and CIS Budget CIP Operating 5-Year Maintenance and Support $1,684,368 Training $44,800 Sub-Total $1,729,168 Implementation, Data Conversion, Project Management $799,200 Contingency (10%)$79,920 Travel (Bill as Incurred)$66,000 Sub-Total $945,120 Total Request $2,674,288 Staff’s Recommendation A.Reduce CIP P2718 from $1,675,000 to $945,120 B.Authorize the General Manager to execute a contract with SpryPoint Services, Inc. in an amount not-to-exceed $2,674,288 for implementation of a cloud-based Utility Billing and Customer Information System solution, including software licensing, implementation services, data conversion, training, and five years of ongoing maintenance under a Software-as-a- Service (SaaS) model UB/CIS Timeline (CY) 2024 2025 2026 2027 Status FINANCE Completed HUMAN RESOURCE MANAGEMENT UTILITY BILLING ENTERPRISE PERMITTING & LICENSE