HomeMy WebLinkAbout06-22-16 FA&C Committee Packet 1
OTAY WATER DISTRICT
FINANCE, ADMINISTRATION AND COMMUNICATIONS
COMMITTEE MEETING
and
SPECIAL MEETING OF THE BOARD OF DIRECTORS
2554 SWEETWATER SPRINGS BOULEVARD
SPRING VALLEY, CALIFORNIA
BOARDROOM
WEDNESDAY
June 22, 2016
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 JU-
RISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
DISCUSSION ITEMS
3. APPROVE A FIVE (5) YEAR AGREEMENT (THREE [3] YEARS WITH TWO [2]
ADDITIONAL YEARS AT THE DISTRICT’S OPTION) WITH ALLIANT INSURANCE
SERVICES, INC. (ALLIANT) FOR BENEFIT CONSULTING AND BROKER
SERVICES IN AN AMOUNT NOT-TO-EXCEED $148,480 AND IDENTIFYING
ALLIANT AS THE DISTRICT’S BROKER OF RECORD (WILLIAMSON) [5 minutes]
4. ADOPT RESOLUTION NO. 4309 UPDATING BOARD OF DIRECTORS POLICY NO.
22, DRUG-FREE WORKPLACE POLICY AND PROCEDURE, TO CHANGE THE
RANDOM TESTING PERCENTAGES FOR ALL EMPLOYEES SUBJECT TO THIS
POLICY AND REVISE THE DEFINITION OF SAFETY-SENSITIVE DUTIES
(WILLIAMSON) [5 minutes]
5. ADOPT RESOLUTION NO. 4308 AMENDING BOARD OF DIRECTORS POLICY NO.
35, THE MEDICAL RESERVE FUND FOR DISTRICT RETIREES, OF THE
DISTRICT’S CODE OF ORDINANCES TO REFLECT THE CURRENT PROCESSES
AND PROCEDURES FOR THE MEDICAL RESERVE FUND (KOEPPEN) [5 minutes]
6. ADOPT RESOLUTION NO. 4310 DECLARING AN END TO WATER SHORTAGE
RESPONSE LEVEL 2- SUPPLY ALERT CONDITION (CAREY) [5 minutes]
2
7. ADOPT ORDINANCE NO. 556 AMENDING SECTION 39, WATER SHORTAGE
RESPONSE PROGRAM, OF THE DISTRICT’S CODE OF ORDINANCES (CAREY) [5
minutes]
8. REQUEST THAT THE BOARD OF DIRECTORS CONSIDER PLACING A
PERMANENT MORATORIUM ON THE INSTALLATION OF NEW RECYCLED
WATER FACILITIES ON OTAY MESA (MARTIN) [5 minutes]
9. ADJOURNMENT
BOARD MEMBERS ATTENDING:
Jose Lopez, Chair
Mitch Thompson
All items appearing on this agenda, whether or not expressly listed for action, may be delib-
erated 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 all attachments are also available through the District Secretary by contacting
her at (619) 670-2280.
If you have any disability which would require accommodation in order to enable you to par-
ticipate in this meeting, please call the District Secretary at 670-2280 at least 24 hours prior
to the meeting.
Certification of Posting
I certify that on June 17, 2016 I posted a copy of the foregoing agenda near the regu-
lar 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 17, 2016.
______/s/_ Susan Cruz, District Secretary _____
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: July 6, 2016
PROJECT: Various DIV. NO.: All
SUBMITTED BY: Kelli Williamson, Human Resources Manager
APPROVED BY:
Adolfo Segura, Chief, Administrative Services
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: APPROVE THE SELECTION OF ALLIANT INSURANCE SERVICES, INC. FOR
BENEFIT CONSULTING SERVICES AND AS THE DISTRICT’S BROKER OF
RECORD
GENERAL MANAGER’S RECOMMENDATION:
That the Board authorize the General Manager to negotiate and enter
into a five (5) year agreement (three [3] years with two [2] additional
years at the District’s option) with Alliant Insurance Services, Inc.
for benefit consulting and broker services and identify Alliant as the
District’s Broker of Record in an amount not-to-exceed $148,480.
COMMITTEE ACTION:
Please see “Attachment A”.
PURPOSE:
To obtain Board authorization for the General Manager to enter into a
five (5) year agreement with Alliant Insurance Services, Inc. for
benefit consulting and broker services and identify Alliant as the
District’s Broker of Record in an amount not-to-exceed $148,480.
ANALYSIS:
In 2012, the District and Alliant Insurance Services, Inc. (Alliant)
entered into a three (3) year agreement with up to two (2) options to
renew. The District is completing the fourth year of this agreement. In
an effort to continue with best practices and to validate that the
District is receiving the best available benefit consulting services at
a competitive price, the District solicited bids once again for benefit
consultants in February 2016. Since labor negotiations will be occurring
2
next year, the District began the RFP process one (1) year ahead of
schedule.
The District uses benefit consultant services to perform a full range
of services related to the design, bidding, implementation,
maintenance, renewal, communication, and improvement of the District’s
group health, dental, life insurance, long-term disability programs and
flexible benefits program.
The District sent an RFP to nine (9) reputable benefit consulting firms
and received responses from the following five (5) firms:
Alliant Insurance Services
Barney & Barney
Keenan & Associates
Living Benefits, Inc.
WSP Corporate Benefits and Insurance Services, Inc.
The proposal received by Barney & Barney was reviewed, however it was
not rated due to their fee structure being outside of the competitive
range and exceeding the District’s budgeted allotment.
The other four proposals were jointly reviewed and rated by a four-
person panel (Attachment B). The written proposal review included
evaluation on the following criteria:
Written Proposal Criteria Maximum Points
Perceived ability of Consultant to negotiate a
benefits program that meets the needs of the District. 15
Consultant’s knowledge and/or technical support
related to the implementation of Online Benefits Open
Enrollment.
10
Consultant’s and other assigned staff’s availability
and accessibility including the location of the office
that will be servicing the District’s account. 20
Qualifications, background, and experience of
Consultant and staff and team composition. 15
Consultant’s ability to provide proactive support to
the District’s Human Resources function including
dissemination of current general and legal updates as
well as time-sensitive insurance carrier information.
20
Completeness, addressed requested information,
readability. 10
Proposed fees as compared to level of effort expended. 10
Total 100
After evaluating the firms’ written responses, the panel invited four
firms for an oral interview (Alliant, Keenan & Associates, Living
Benefits, and WSP Corporate Benefits and Insurance Services, Inc.). The
criteria used to evaluate the firms during the oral interview were based
on the following:
3
Oral Interview Criteria Maximum Points
Demonstration of having powerful leverage and
influence in the insurance market.
20
Ability to provide creative or unique solutions to
clients.
20
Ability to communicate and deal effectively and
professionally with all levels of the organization.
Approachability.
20
Ability to ensure accuracy of the data collected and
analysis given to the District.
20
Total 80
Based on the overall evaluation, which included a review and rating of
proposals, interviews, references, and overall best value, staff
recommends contracting with Alliant. While all consultants evaluated
are reputable firms, Alliant scored exceptionally well in all categories
being evaluated demonstrating their expertise and knowledge in the
health insurance industry and their capability in offering robust
leverage in the marketplace, cost-saving solutions to the District, and
the ability to provide comprehensive resources.
As an additional benefit, Alliant currently serves as the benefits
consultant to the CSAC/SDRMA Medical pool of which the District is a
member. Their transparent relationship has proven to be invaluable and
should continue to strengthen communication and legal compliance
regarding benefit-related topics for the District. Moreover, continuing
with Alliant should result in efficiencies as there will be no loss of
staff time in onboarding a new consultant.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The annual cost of the agreement is $29,000 for each of the first three
(3) years and will not exceed $148,480 over five (5) years. Funding for
this expenditure is provided through the operating budget and the FY17
budget, which includes $35,000.
STRATEGIC GOAL:
Provide enhanced value by directing and managing financial issues that
are critical to the District.
LEGAL IMPACT:
None.
Attachments: Attachment A - Committee Action Report
Attachment B - Summary of Proposal Rankings
ATTACHMENT A
SUBJECT/PROJECT:
APPROVE THE SELECTION OF ALLIANT INSURANCE SERVICES FOR
BENEFIT CONSULTING SERVICES AND AS THE DISTRICT’S BROKER OF
RECORD
COMMITTEE ACTION:
The Finance, Administration, and Communications Committee met on June
22, 2016, to review this item. The Committee supported 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 from the committee prior to presentation to the
full Board.
Negotiation
Skills
Online Benefits Open
Enrollment Staff Availability
Qualifications,
Background, &
Experience
Proactive Support with
Legal &Time-Sensitive
Insurance Carrier
Information
Completeness of
Proposal
INDIVIDUAL
SUBTOTAL -
WRITTEN
AVERAGE SUBTOTAL -
WRITTEN
Proposed
Rates**
TOTAL -
WRITTEN
15 10 20 15 20 10 90 10 100
Rater 1 15 10 20 12 20 10 87
Rater 2 15 10 20 14 20 9 88
Rater 3 14 9 18 15 19 10 85
Rater 4 14 9 18 14 18 8 81
Rater 1 15 10 15 12 20 10 82
Rater 2 15 9 18 14 18 10 84
Rater 3 14 9 18 14 18 9 82
Rater 4 13 9 15 14 18 8 77
Rater 1 10 8 15 12 15 8 68
Rater 2 12 9 15 13 15 9 73
Rater 3 11 7 14 11 14 6 63
Rater 4 11 7 11 13 15 6 63
Rater 1 15 10 15 12 15 8 75
Rater 2 15 8 15 13 16 8 75
Rater 3 12 8 14 12 15 7 68
Rater 4 10 7 10 12 14 6 59
Leverage in the
Insurance Market
Place
Creative or Unique
Solutions
Communication
Skills &
Approachability
Accuracy of Data
Collected &
Analysis
INDIVIDUAL TOTAL -
ORAL
AVERAGE
TOTAL ORAL TOTAL SCORE REFERENCES
20 20 20 20 80 180 Poor/Good/ Excellent
Rater 1 20 18 20 18 76
Rater 2 18 14 18 16 66
Rater 3 18 18 20 18 74
Rater 4 18 16 18 18 70
Rater 1 20 18 20 16 74
Rater 2 16 14 14 14 58
Rater 3 18 18 20 16 72
Rater 4 18 18 18 18 72
Rater 1 16 16 14 16 62
Rater 2 10 12 16 10 48
Rater 3 9 12 12 12 45
Rater 4 12 14 16 10 52
Rater 1 14 14 16 14 58
Rater 2 12 10 12 10 44
Rater 3 10 10 12 10 42
Rater 4 12 10 12 10 44
CONSULTANT
FEE RATE
(3 years with 2
option years)
SCORE
Barney & Barney*$213,818.00
Alliant $148,480.00 6
Keenan & Associates $157,363.00 5
Living Benefits $121,450.00 8
WSP Corporate Benefits $93,305.00 10 * Barney & Barney was not rated/interviewed due to the compensation fees being outside of the competitive range and exceeding the District's budgeted allotment.
WRITTEN
SUMMARY OF PROPOSAL RANKINGS
Benefit Broker
Excellent
Keenan & Associates 81 5
MAXIMUM POINTS
Barney & Barney*NOT RATED
75
79
Alliant 85 6 91
WSP Corp. Benefits 69 10
Living Benefits
86
69 155
Living Benefits 67 8
COMPENSATION RATES (FEES) SCORING CHART**
MAXIMUM POINTS
Barney & Barney*
Alliant
Keenan & Associates
52
72
WSP Corp. Benefits
NOT INTERVIEWED
47 126
ORAL
127
163
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: July 6, 2016
PROJECT: DIV. NO. ALL
SUBMITTED BY: Kelli Williamson
Human Resources Manager
APPROVED BY:
Adolfo Segura, Chief, Administrative Services
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: ADOPT RESOLUTION #4309 TO UPDATE BOARD POLICY #22, DRUG-FREE
WORKPLACE POLICY AND PROCEDURE
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution #4309 to update Board Policy #22, Drug-
Free Workplace Policy and Procedure, to change the random testing
percentages for all employees subject to this policy and revise the
definition of safety-sensitive duties.
COMMITTEE ACTION:
Please see “Attachment A”.
PURPOSE:
To request that the Board adopt Resolution #4309 to update Board Policy
#22, Drug-Free Workplace Policy and Procedure.
ANALYSIS:
Consistent with the District’s Strategic Plan and Board Policy #44,
Review of Procedures, the District regularly reviews policies and
procedures to ensure they are streamlined and are clear and consistent
with applicable laws.
Based on recent changes to the Department of Transportation’s (DOT)
random drug and alcohol testing, the District made necessary updates to
our DOT Testing Human Resources Policy and Procedure to be in compliance,
District staff is recommending revisions to the attached policy, Drug-
Free Workplace Policy and Procedure, so that both policies are consistent
(Attachment C). Updates are detailed below and revisions are shown in
the attached strike-through version of the policy (Exhibit 1).
Drug-Free Workplace Policy and Procedure (Board Policy #22)
The Drug-Free Workplace (DFW) random testing policy currently requires
testing percentages at 50% drugs and 10% alcohol (of the pool of
employees per year) for safety-sensitive employees, however, recent
updates to the DOT regulations changed the minimum testing percentages
to 25% drugs and 10% alcohol for DOT employees (from 50% drugs and 10%
alcohol). Therefore, in order to make both policies consistent, the
District is recommending to lower the drug testing percentage for the
DFW to 25% to be consistent with DOT’s and to increase the alcohol
testing percentage to both DOT and DFW to 25%. By having the percentages
the same, at 25% drugs and 25% alcohol for both DOT and DFW policies,
employees would be tested for both drugs and alcohol while they are at
the testing facility and the drug and alcohol testing procedure would be
more efficient. The testing percentages would be changed to be the same
across the board for all employees (including management) that are
subject to either the DOT or DFW policy. Additional updates to the policy
include revisions to the definition of safety-sensitive duties to be in
line with the safety duties performed by employees. Updating the
definition has no impact on employees since employees performing these
safety-sensitive duties are already in the random drug testing pool.
The Association has agreed to the policy as presented and General Counsel
has reviewed the proposed updates.
Based on the above, it is recommended that the Board of Directors adopt
Resolution #4309 in support of the proposed revisions.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
Optimize the District’s Operating Efficiency.
LEGAL IMPACT:
None.
ATTACHMENTS:
Attachment A – Committee Action Report
Attachment B – Resolution #4309
Exhibit 1 – Drug-Free Workplace Policy and Procedure
Attachment C – Proposed Copy, Drug-Free Workplace Policy and Procedure
(Board Policy #22)
ATTACHMENT A
SUBJECT/PROJECT: ADOPT RESOLUTION #4309 TO REVISE AND UPDATE BOARD POLICY
#22, DRUG-FREE WORKPLACE POLICY AND PROCEDURE
COMMITTEE ACTION:
The Finance, Administration and Communications Committee met on June 22,
2016, to review this item. The Committee supports presentation to the
full Board for their consideration.
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
RESOLUTION NO. 4309
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE OTAY WATER DISTRICT TO
REVISE DISTRICT POLICY
WHEREAS, the Board of Directors of Otay Water District
have established policies, procedures, ordinances, and
resolutions for the efficient operation of the District; and
WHEREAS, it is the policy of the District to establish
procedures to review policies, procedures, ordinances, and
resolutions periodically to ensure they are current and
relevant; and
WHEREAS, District staff has identified Board Policy #22,
Drug-Free Workplace Policy and Procedure, as requiring
revisions as per the attached strike-through copy.
NOW, THEREFORE, BE IT RESOLVED that the Board of
Directors of the Otay Water District amends the Board
Policies indicated above in the form presented to the Board
at this meeting.
PASSED, APPROVED AND ADOPTED by the Board of Directors of
the Otay Water District at a regular meeting held this 6th of
July, 2016.
__________________________
President
ATTEST:
___________________________
Secretary
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 6/6/12
7/6/16
Page 1 of 20
A. Policy
The Otay Water District (“District”) has zero tolerance for the use
of controlled substances or the abuse of alcohol. Employees who
are under the influence of a drug or alcohol on the job compromise
the District’s interests and endanger their own health and safety
as well as the health and safety of others. The District prohibits
the use, possession, manufacture, distribution, or being under the
influence of alcohol or controlled substances by any District
employee while on District property or while on duty, except as
specified herein. Violation of this policy is an act of misconduct
meriting dismissal without prior warning or disciplinary action in
accordance with the District’s Discipline Policy and Procedures.
B. Exceptions
The following exceptions apply to this policy:
1. Events – Authorized Use of Alcohol
The General Manager or his/her designee, at his/her discretion,
may authorize the use of alcohol at a District event, subject
to any conditions he/she elects to impose.
2. Customary Use of Over-the Counter or Prescription Drugs
The exceptions set forth in this section do not extend to the
use of marijuana, or any product made or derived from
marijuana, regardless of whether the employee’s doctor
prescribes, recommends, or authorizes its use. With respect to
an employee, use of an over-the-counter drug, or a
prescription-only drug under a prescription for the employee,
in the manner prescribed, will not be treated as a violation of
this policy unless the drug has potential side effects which
impair the employee’s ability to perform any safety-sensitive
duty and/or the core duties of his/her position and the
employee has failed to notify his/her supervisor or Human
Resources of such side effects before performing duties while
under the influence of the drug. The District may require a
note from the employee’s doctor concerning authorization for a
prescription and/or the possible side effects of the prescribed
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 6/6/12
7/6/16
Page 2 of 20
drugs. The District shall comply with all applicable laws
concerning the privacy of employees’ medical information.
With respect to an applicant, use of an over-the-counter drug,
or a prescription-only drug under a prescription for the
applicant, in the manner prescribed, will not disqualify the
applicant for employment if he/she satisfactorily explains such
use upon being informed of a positive test for controlled
substances. The District may require a note from the
applicant’s doctor concerning authorization for a prescription
and/or the possible side effects of the prescribed drugs.
C. Definitions
1. Accident:
a. Any accident, in which an employee is driving on District
business, and is at fault or suspected of having
significantly contributed to an accident. This shall apply
to employees covered by the Department of Transportation
(“DOT”) policy only if the accident is not subject to the
DOT policy.
b. Any accident, not involving the driving of a District
vehicle, that is reasonably believed by management or
credibly reported by another person to have been caused by
an on-duty employee and which results in serious physical
injury.
2. Controlled Substance:
a. Any drug or substance identified by section 40.85 of title
49 of the Code of Federal Regulations or sections 11054-
11058 of the California Health and Safety Code.
b. Any drug or substance.
3. Dilute Specimen: A specimen with creatinine and specific
gravity values that are lower than expected for human urine or
a specimen that is adulterated in any way.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 6/6/12
7/6/16
Page 3 of 20
4. Drug Paraphernalia: This term has the same definition as is
used in section 11364.5(d) of the California Health and Safety
Code and applies only to paraphernalia deemed unlawful under
section 11364.5(d).
5. Manager/Management: A District employee who is designated as a
supervisor, manager, or executive.
6. Medical Review Officer: A person who is a licensed physician
and who is responsible for receiving and reviewing laboratory
results for substance tests and evaluating medical explanations
for certain test results.
7. Negative: A person is considered to have tested negative for a
substance if his/her substance test does not produce a positive
result.
8. Positive: A person is considered positive for alcohol if
he/she has a blood alcohol concentration of 0.04 or greater at
the time he/she submits to testing. A person is considered
positive for a controlled substance if he/she has any amount of
a controlled substance at or above a “cutoff concentration”
specified in section 40.87 of title 49 of the Code of Federal
Regulations at the time he/she submits to testing.
9. Reasonable Suspicion: A reasonable suspicion exists that a
person is under the influence of a substance if a trained
observer reasonably comes to the conclusion that the person is
under the influence of a substance due to having personally
observed, with respect to the person, some or all of the
effects specified in Appendix A of this policy.
Additionally, a reasonable suspicion exists that a person is
under the influence of a substance if an observer has seen the
person use a substance.
No one factor is sufficient to create a reasonable suspicion,
but an observer may make a reasonable assessment based on the
quantity, degree, and/or severity of applicable factors.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 6/6/12
7/6/16
Page 4 of 20
10. Refusal to Submit to Testing. Each of the following constitutes
a refusal to submit to testing:
a. Failing to immediately report for substance testing when
directed to do so;
b. Failing to complete the testing process (including signing
any forms necessary to authenticate or identify a
specimen);
c. Failing to provide an adequate amount of breath, saliva, or
urine for a test;
d. Failing to cooperate with any aspect of the testing
process, including but not limited to refusing to wash
hands when directed, being confrontational with testing
personnel, or failing to comply with instructions in a
“direct observation,” as that term is used in section
40.197 of title 49 of the Code of Federal Regulations;
e. Using or wearing a prosthetic device to interfere with the
collection process;
f. Admitting to adulterating or diluting the specimen; or
g. Any act or failure to act that is intended to interfere
with the results.
11. Safety-Sensitive Duties: Duties which consist of any of the
following:
Operating any assigned District vehicle or equipment
(includes management and non-management employees);
High-voltage electrical work (600 volts or greater);
Work in “confined spaces,” as that term is defined in
District regulations or CalOSHA regulations;
Performing maintenance on any vehicle;
Loading, and unloading or attending any District vehicle or
equipment; or
Access to sensitive/classified information related to
emergency response, safety or security duties;.
Participation in Hazardous Waste Operations and Emergency
Response Confined Space Rescue Team;
Work performed at elevated or depth locations more than 4ft
above or below ground; or
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 6/6/12
7/6/16
Page 5 of 20
Work involving the use or disposal of hazardous chemicals
as that term is defined in District regulations or Cal OSHA
regulations.
12. Serious Physical Injury: An injury to an employee that causes
the employee to be absent from work following an accident or
which requires hospitalization of the employee.
13. Substance: Any substance containing alcohol or any controlled
substance.
14. Under the Influence: With respect to alcohol, a person is under
the influence at the time he/she is ordered to submit to
testing if he/she tests positive for alcohol at the time he/she
submits to testing. With respect to controlled substances, a
person is under the influence at the time he/she is ordered to
submit to testing if he/she tests positive for a controlled
substance at the time he/she submits to testing.
D. Conflicts with DOT Policy
As to applicants or employees to whom the DOT Policy applies, to
the extent this policy imposes a requirement that is less stringent
than the DOT Policy the more stringent requirements of the DOT
Policy will control.
E. Testing Procedures
When an employee or applicant is to be tested, the District shall
use the same testing procedures that are used for testing under the
DOT Drug and Alcohol Testing Policy, including the procedures for
testing a “split specimen,” as that term is defined in section 40.3
of title 49 of the Code of Federal Regulations. The service
providers shall comply with section 40.47 of title 49 of the Code
of Federal Regulations except they shall use a non-federal custody
and control form for applicants and employees.
1. Alcohol Testing
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 6/6/12
7/6/16
Page 6 of 20
Alcohol testing will be conducted using evidential breath
testing devices (“EBT”) approved by the National Highway
Traffic Safety Administration. A screening test must be
conducted first. If the result is an alcohol concentration
level of less than 0.02, the test is considered a negative
test. If the alcohol concentration level is 0.02 or more, a
second confirmation test must be conducted. Alcohol testing
shall be accomplished by a laboratory certified by the U.S.
Department of Health and Human Services.
2. Controlled Substance Testing
a. The test must be conducted by analyzing the employee's
urine.
b. The urinalysis shall be done at a laboratory certified by
the U.S. Department of Health and Human Services.
c. The urine specimen must be split into two bottles labeled
as "primary" and "split" specimen. Both bottles must be
sent to the laboratory.
d. If the urinalysis of the primary specimen tests positive
for the presence of illegal, controlled substances, the
employee has 72 hours from time of notification to request
that the split specimen be analyzed by a different
certified laboratory.
e. The urine sample shall be tested for the following:
marijuana metabolites, cocaine metabolites, opiates,
amphetamines and phencyclidine (“PCP”);
f. If the test is positive for one or more of the drugs listed
in subsection "e" above, a confirmation test must be
performed using gas chromatography/mass spectrometry
analysis.
g. All drug test results will be reviewed and interpreted by
the Medical Review Officer before they are reported to the
District.
h. With all positive drug tests, the Medical Review Officer
will contact the employee to determine if there is a
medical explanation for the positive test result. If
documentation is provided and the Medical Review Officer
determines that there is a legitimate medical use for the
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 6/6/12
7/6/16
Page 7 of 20
prohibited drug, the test result may be reported to the
District as negative.
F. Testing
1. Persons Subject to Substance Screening
All applicants for employment, in conjunction with pre-
employment physical examination;
All employees reasonably suspected of using substances
while on duty or on District property or while working
while under the influence of substances;
All employees reasonably suspected of possessing,
manufacturing, or distributing substances while on duty or
on District property;
Any employee at fault or reasonably suspected of having
significantly contributed to an accident while on duty;
Any employee who performs safety-sensitive duties whose
name is selected for testing pursuant to the District’s
random testing policy; or
Any District employee who applies for and is selected for a
position that will require the performance of safety-
sensitive duties.
2. Pre-employment, Promotions and Transfer Physicals
All applicants for employment shall, as part of their pre-
employment physical examination, submit to a urine analysis or
other legally authorized testing methods as selected by the
District for substances.
Any District employee who applies for a position that will
require the performance of safety-sensitive duties shall, as a
precondition to appointment to such position, submit to a urine
analysis or other legally authorized testing methods as
selected by the District for substances.
3. Random Testing of Managers and Safety-Sensitive Duty Employees
Each year the District shall randomly conduct substance tests
of employees who perform safety-sensitive duties. Based on the
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number of such employees employed by the District on January 1,
the District shall conduct by the following December 31, a
number of tests for controlled substances equal to 2550 percent
of the total number of employees who perform safety-sensitive
duties, or the minimum amount required by DOT regulations,
whichever is greater. Within the same time period, the
District shall randomly conduct a number of tests for alcohol
equal to 2510 percent of the same number of safety-sensitive
employees, or the minimum amount required by DOT regulations,
whichever is greater.
Each year the District shall randomly conduct substance tests
of managers who are not randomly tested as employees performing
safety-sensitive duties. Based on the number of managers
employed by the District on January 1, the District shall
conduct by the following December 31 a number of tests for
controlled substances equal to 2510 percent of the total number
of such managers, or the minimum amount required by DOT
regulations, whichever is greater. Within the same time
period, the District shall randomly conduct a number of tests
for alcohol equal to 2510 percent of the same number of such
managers, or the minimum amount required by DOT regulations,
whichever is greater. Managers who perform safety-sensitive
duties and who are included in the pool of safety-sensitive
duty employees selected for random testing shall not be
included in the pool of non-safety-sensitive duty managers who
are selected for random testing.
The General Manager will contract with a service provider to
perform the random selection of employee names for substance
testing and select the dates upon which the employees will be
tested. The service provider must ensure that every safety-
sensitive employee has an equal chance of being selected each
time a name is randomly drawn and that any employee whose name
is selected is not exempt from having his/her name selected in
any subsequent drawing in the same year.
The service provider shall provide the selected names and dates
to the Safety and Security Specialist Administrator and/or
Human Resources Manager, who shall not disclose this
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information to any other person except to the employee selected
for testing and the employee’s supervisor at the time that the
employee is required to submit to testing. If the employee is
absent from duty on a date that he/she has been randomly
selected for testing, an alternate name may be selected or
he/she may be required to submit to a test immediately upon
returning to work, without prior notice.
Upon being informed that he/she is required to submit to a
random test, the employee must report to the testing location,
as quickly as possible but no greater than one hour from being
informed, and complete the test as directed by personnel at the
testing location. Upon completing testing, the employee shall
report back to duty if his/her duty day has not yet concluded.
Random testing is separate from the other forms of testing
described in this policy. An employee who submits to a
reasonable suspicion or post-accident test does not satisfy the
requirement that he/she submit to a random test when ordered.
4. Post-accident Testing
If an employee is involved in an accident that under this
policy requires that the employee submit to substance testing,
the employee’s supervisor shall immediately contact Human
Resources and the Safety and Security Specialist Administrator
to report the accident and the necessity of testing. After
consultation with Human Resources, if it is determined that the
employee should be tested, then the supervisor shall direct the
employee to report to the testing location and complete the
test as directed by personnel at the testing location. The
supervisor shall arrange to transport the employee to the
testing location. Upon completing testing, the employee shall
report back to duty if his/her duty day has not yet concluded,
unless a reasonable suspicion exists, based on the observation
of the employee’s supervisor and in consultation with Human
Resources, that the employee was under the influence of a
substance at the time or shortly after the accident. If such a
reasonable suspicion exists, the employee shall be released
from duty for the remainder of the day. The supervisor, in
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consultation with Human Resources, thereafter shall determine
on a day-to-day basis whether to permit the employee to return
to duty, until the results of the test have returned. If an
employee has been ordered to submit to substance testing for
post-accident testing, and reasonable suspicion exists, the
District may place the employee on leave without pay pending
the test results. If the employee’s test results are negative,
the District shall restore any salary lost by the employee for
the days he/she was on leave, as though the employee had
reported for duty.
If the employee requires immediate medical assistance due to
the accident, such that he/she is unable to report to the
testing location, the supervisor shall coordinate with the
hospital to conduct the test or require the employee to report
to the testing location as soon as is practicable.
The determination as to whether an employee is involved in an
accident shall be made by the employee’s supervisor in
consultation with the Safety and Security Specialist
Administrator and Human Resources, based on the information
available to him/her. If it cannot be immediately determined
whether the employee was involved in an accident, the
supervisor shall not order the employee to testing until a
determination can be made.
The following criteria apply when conducting drug and alcohol
tests due to an accident:
a. A breath alcohol test must be administered as soon as
possible. Every effort should be made to ensure that a
breath alcohol test is performed within eight hours
following the accident. If testing has not occurred within
eight hours, attempts to test should be discontinued.
However, if testing did not occur within eight hours, and
reasonable suspicion existed at the time or shortly after
the accident the employee may resume duties with his/her
next shift that begins after the eight hours have passed.
Prior to the employee’s return, management shall observe
the employee’s condition before the employee is allowed to
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resume duties to ensure that there is no longer reasonable
suspicion.
b. A drug screening test should be initiated prior to the 32nd
hour following an accident.
c. The employee must remain readily available for testing or
he or she will be deemed to have refused the test (see
Refusal to Submit to Testing). This rule does not require
the delay of necessary medical attention for injured
persons following the accident nor prohibit the employee
from leaving the scene to obtain assistance or necessary
emergency medical care.
d. An employee subject to post-accident testing may not use
alcohol within eight hours following the accident or before
an alcohol test, whichever comes first.
e. Testing will not be conducted on any deceased employee.
f. The results of a breath or blood test for the use of
alcohol or a urine test for controlled substances,
conducted by Federal, State, or local officials having
independent authority for the test, shall be considered to
meet the requirements of this policy provided such results
are obtained by the employer, and conform to the applicable
Federal, State or local requirements.
g. The potentially affected employee will not be allowed to
proceed alone to or from the collection site. Time spent
in complying with post-accident testing is compensable.
h. Documentation of the activity being performed by the
employee that supports the determination to conduct post-
accident testing should be prepared and signed by the
supervisor requesting the test within 24 hours of the
accident or before the results of the drug test are
released, if possible.
5. Reasonable Suspicion Testing
If a supervisor, manager, the Safety and Security Specialist
Administrator, or other personnel has a reasonable suspicion
that the employee is under the influence of a substance while
on District property or on duty, he/she shall consult with
Human Resources of this observation to determine if testing is
appropriate. After consultation with Human Resources, if it is
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determined that the employee should be tested, a supervisor
shall direct the employee to immediately report for testing and
complete the test as directed by personnel at the testing
location. The supervisor shall arrange to transport the
employee to the testing location. If the person who advises
Human Resources of the observation reasonable suspicion is not
the employee’s supervisor, Human Resources must immediately
notify the supervisor of the employee’s reasonable
suspicionthat the employee is reporting to Human Resources and
why, and the supervisor shall arrange to transport the employee
to the testing location. The supervisor(s) witnessing the
impairment must document the specific observations upon which
the reasonable suspicion is based.
Upon completing testing, the employee shall be released from
duty for the remainder of the day. The supervisor, in
consultation with Human Resources, thereafter, shall determine
on a day-to-day basis whether to permit the employee to return
to duty, until the results of the test have returned. If an
employee has been ordered to submit to substance testing for
reasonable suspicion, the District may place the employee on
leave without pay pending the test results. If the employee’s
test results are negative, the District shall restore any
salary lost by the employee for the days he/she was on leave,
as though the employee had reported for duty.
The following criteria apply when conducting drug and alcohol
tests due to reasonable suspicion:
a. Alcohol
A breath alcohol test must be administered as soon as
possible. Every effort should be made to ensure that a
breath alcohol test is performed within eight hours. If
testing has not occurred within eight hours, attempts to
test should be discontinued and the employee may resume
duties with his/her next shift that begins after the eight
hours have passed. However, prior to the employee’s
return, management shall observe the employee’s condition
before the employee is allowed to resume duties to ensure
that there is no longer reasonable suspicion.
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b. Controlled Substances
A urinalysis test for controlled substances must be
administered as soon as possible. Every effort should be
made to ensure the urinalysis is performed within 32 hours
of the observation.
c. The employee may not proceed alone to or from the
collection site. The supervisor or other appropriate
person making the observation shall arrange to transport
the employee to the testing site.
d. Documentation to support the determination to conduct
reasonable suspicion testing should be prepared and signed
by the person who made the determination within 24 hours of
the determination or before the results of the test are
released, whichever is earlier, if possible.
6. Acknowledgment and Consent
Any employee subject to testing under this policy will be asked
to sign a form acknowledging the procedures governing testing,
and consenting to (1) the collection of a urine sample for the
purpose of determining the presence of alcohol or controlled
substances, and (2) the release to the District of medical
information regarding the test results. Refusal to sign the
agreement and consent form, or to submit to the drug test, will
result in the revocation of an applicant’s job offer, or will
subject an employee to discipline up to and including
termination.
7. Refusal to Submit to Testing
If an applicant refuses to submit to testing for any substance,
the applicant is disqualified for employment. If a District
employee who has applied for a position that requires the
performance of safety-sensitive duties refuses to submit to
testing for any substance, the employee is disqualified for
such position.
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If an employee refuses to submit to testing for any substance,
the District may treat such refusal as an act of
insubordination. The District shall also impose the same
disciplinary action of dismissal for a refusal to test that it
would impose for a positive test result, so as not to encourage
employees to refuse to test in the hope of avoiding more severe
disciplinary action. The District may immediately place an
employee on leave without pay if the employee refuses to submit
for testing.
8. Refusal to Authorize Disclosure of Results of Testing
If an applicant refuses to authorize the disclosure of the
testing results to the District, the applicant is disqualified
for employment. If a District employee who has applied for a
position that requires the performance of safety-sensitive
duties refuses to authorize the disclosure of the test results
to the District, the employee is disqualified for such
position.
If an employee refuses to authorize the disclosure of results
of testing to the District, the District will impose the same
disciplinary action of dismissal for a refusal to authorize the
disclosure of results of testing, that it would impose for a
positive test result, so as not to encourage employees to
refuse to authorize the disclosure of test results in the hope
of avoiding more severe disciplinary action.
9. Positive Test
If an applicant tests positive for a controlled substance,
he/she shall be disqualified for employment unless he/she meets
the requirements for the over-the-counter/prescription drug
exception set forth in Section B(2) of this policy. If a
District employee who has applied for a position that requires
the performance of safety-sensitive duties tests positive for a
substance, the employee is disqualified for such position.
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If an employee tests positive for a substance, the employee
shall not be returned to duty and shall not receive pay during
his/her absence until the employee requests that the split
urine specimen be tested and the test of that specimen is not
positive for a substance.
This unpaid absence shall not be considered a disciplinary or
punitive action against the employee and any record of such
absence shall be maintained separately from the employee’s
personnel file. The absence is for the administrative and
safety interests of the District. This unpaid absence has no
effect on the District’s decision or ability to discipline an
employee for violating this policy.
If the Medical Review Officer determines that an employee’s
specimen is a dilute specimen and the specimen is positive for
a substance, the employee shall be considered to have tested
positive for that substance. If a dilute specimen produces a
negative result then the employee shall be required to submit
to a second substance test, in the manner prescribed in section
40.197 of title 49 of the Code of Federal Regulations. All such
second tests shall be with “direct observation,” as that term
is used in section 40.197.
10. Request for Retest
If an employee tests positive for any substance, the employee
may, within 72 hours of being notified of the positive test
result, request of the Medical Review Officer that the split
specimen be tested. If the employee does not timely submit a
request, the employee shall be considered to have waived
his/her right to have the split specimen tested. The employee
shall pay for the cost of testing the split specimen. If the
employee is unable to pay this cost at the time of the request,
the District must ensure that the split specimen is tested even
if it means that the District may have to initially bear the
cost. The District may recover the cost from the employee at a
later time.
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If a split specimen does not produce a positive result for a
substance, the District shall restore any salary lost by the
employee as a result of an absence imposed because of the
positive result on the first specimen. The employee shall be
considered to have not tested positive for a substance. The
District shall also reimburse the employee for the cost of the
retest if the employee paid for the retest.
The District may not request that the split specimen be tested.
G. Employee Assistance Programs
The District may refer any employee, including an employee who is
dismissed because of a positive test for a substance, to its
employee assistance program. If in any instance the District is
required to lawfully accommodate an employee’s disability related
to substance abuse, the District shall refer the employee to a
substance abuse professional.
H. Suspicion of Possession/Distribution/Manufacture of Controlled
Substances
If a supervisor has a reasonable suspicion that an employee
unlawfully possesses or is distributing or manufacturing a
controlled substance or drug paraphernalia on or in District
property, or while on duty, the supervisor must report this
suspicion to Human Resources.
1. For purposes of Section H only, “reasonable suspicion” means
the following:
a. As to possession, the supervisor or a reporting credible
source must have seen a substance or item on the person of
the employee, in the employee’s work area, or in or on
District property assigned to the use of the employee that
a reasonable person would believe is a controlled substance
or drug paraphernalia, or have seen in any of the same
areas a container that a reasonable person would believe
contains a controlled substance or drug paraphernalia.
b. As to distribution, the supervisor must have seen the
employee convey to another person a substance or item that
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a reasonable person would believe is a controlled substance
or drug paraphernalia, or have seen the employee convey a
container to another person that a reasonable person would
believe contains a controlled substance or drug
paraphernalia, or have received a report of observation of
the same from a credible source.
c. As to manufacture, the supervisor must have observed
conditions that a reasonable person would equate to the
manufacture of a controlled substance or drug
paraphernalia, which may include the observation of smell,
appearance, or sound. The supervisor must also have
observed conditions that would attribute suspected
manufacture to the employee, such as observing these
conditions in the employee’s work area or in or on District
property assigned to the use of the employee. If the
conditions are observed on the person of the employee, the
supervisor must consider whether the employee reported to
duty in such condition instead of changing to such
condition while on duty, or have received a report of
observation of the same from a credible source.
2. After a report of a reasonable suspicion has been made to Human
Resources, the Human Resources Manager must confer with
management representatives to consider whether the reported
observation constituted reasonable suspicion, and decide what
steps to take in response to the reported observation.
a. If the decision is to take no further action, the matter
will be dismissed.
b. If the decision is to discuss the observation with the
employee, Human Resources and the supervisor will meet with
the employee to discuss the observation. If as a result of
the discussion, Human Resources and/or the supervisor
believe that a search is necessary, they will confer with
management representatives to determine whether to conduct
a search.
c. If the decision is to conduct a search, the search must be
limited to a search of District property, such as the
employee’s work area (including desk drawers and file
cabinets), District vehicle or equipment, and District
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facilities. The search may be performed by the Human
Resources representative or another person designated by
the Human Resources representative, which may include the
supervisor. The employee does not need to be present
during the search. If any material is retrieved that
appears to bear out the supervisor’s reasonable suspicion,
the Human Resources representative must take possession of
the material.
d. If the decision is to conduct a search and the distribution
of controlled substances or drug paraphernalia is
reasonably suspected, the search may include not only the
work area/equipment of the employee suspected of
distributing controlled substances or drug paraphernalia,
but the work area/equipment of any employee whom was
observed receiving the item from the employee suspected of
distributing controlled substances or drug paraphernalia.
The receiving employee is entitled to the same rights as
the distributing employee.
e. Any search of the person of the employee or personally-held
possessions of the employee, such as a briefcase, purse,
pocketbook, backpack or personal vehicle, must be conducted
by a law enforcement officer. If the decision to conduct a
search extends to these areas, Human Resources should
contact law enforcement to request such a search.
3. If the Human Resources representative takes possession of any
material as a result of the search, and the employee does not
confirm that it is a controlled substance or drug
paraphernalia, the District shall contact the local law
enforcement agency and will forward the substance to have the
item tested/analyzed to determine if it is a controlled
substance or drug paraphernalia. If a law enforcement officer
takes possession of an item as a result of a search, and the
employee does not confirm that it is a controlled substance or
drug paraphernalia, the District shall follow up with the law
enforcement agency to verify the item is a controlled substance
or drug paraphernalia. The employee shall not return to duty
and shall not receive pay during his/her absence until the law
enforcement agency has verified that the tested/analyzed item
is not positive for a controlled substance or drug
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paraphernalia. If the tested/analyzed item does not produce a
positive result for a controlled substance or drug
paraphernalia, the District shall restore any salary lost by
the employee as a result of the absence.
I. Disciplinary Action
Disciplinary action for violations of this policy will be taken in
accordance with the District’s Discipline Policy and Procedures.
J. Accommodation of Individuals with Disabilities
Nothing in this policy shall be construed so as to relieve the
District of its lawful obligation to accommodate individuals with
disabilities.
K. Confidentiality
All alcohol and drug-testing records will be treated as
confidential.
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APPENDIX A
INDICATION OF DRUG USE
REMEMBER THAT THESE SYMPTOMS ARE ONLY INDICATIONS. THEY MAY BE A SIGN
OF SOMETHING OTHER THAN DRUG OR ALCOHOL USE.
PHYSICAL
1. Increased pulse rate 10. Nasal sores
2. Weak and rapid pulse 11. Slowed respirations
3. Increased blood pressure 12. Shallow respiration
4. Increased body temperature 13. Cold and clammy skin
5. Constricted pupils 14. Chills and sweats
6. Dilated pupils 15. Cramps
7. Bloodshot eyes 16. Nausea
8. Water eyes 17. Convulsions
9. Runny nose
MENTAL AND EMOTIONAL
1. Increased alertness 10. Disorientation
2. Excitation 11. Visual illusions
3. Anxiety 12. Hallucinations
4. Irritability 13. Paranoia
5 Euphoria 14. Delirium
6. Increased emotionality 15. Irrational fears
7. Impaired attention 16. Panic
8. Impaired memory 17. Depressed mood
9. Altered perceptions
BEHAVIORAL
1. Slurred speech 8. Hyperactivity
2. Staggered gait 9. Agitation
3. Fatigue 10. Argumentative
4. Apathy 11. Hostility
5. Drowsiness 12. Tremors
6. Loss of appetite 13. Insomnia
7. Increased appetite
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A. Policy
The Otay Water District (“District”) has zero tolerance for the use
of controlled substances or the abuse of alcohol. Employees who are
under the influence of a drug or alcohol on the job compromise the
District’s interests and endanger their own health and safety as
well as the health and safety of others. The District prohibits the
use, possession, manufacture, distribution, or being under the
influence of alcohol or controlled substances by any District
employee while on District property or while on duty, except as
specified herein. Violation of this policy is an act of misconduct
meriting dismissal without prior warning or disciplinary action in
accordance with the District’s Discipline Policy and Procedures.
B. Exceptions
The following exceptions apply to this policy:
1. Events – Authorized Use of Alcohol
The General Manager or his/her designee, at his/her discretion,
may authorize the use of alcohol at a District event, subject
to any conditions he/she elects to impose.
2. Customary Use of Over-the Counter or Prescription Drugs
The exceptions set forth in this section do not extend to the
use of marijuana, or any product made or derived from
marijuana, regardless of whether the employee’s doctor
prescribes, recommends, or authorizes its use. With respect to
an employee, use of an over-the-counter drug, or a
prescription-only drug under a prescription for the employee,
in the manner prescribed, will not be treated as a violation of
this policy unless the drug has potential side effects which
impair the employee’s ability to perform any safety-sensitive
duty and/or the core duties of his/her position and the
employee has failed to notify his/her supervisor or Human
Resources of such side effects before performing duties while
under the influence of the drug. The District may require a
note from the employee’s doctor concerning authorization for a
prescription and/or the possible side effects of the prescribed
drugs. The District shall comply with all applicable laws
concerning the privacy of employees’ medical information.
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With respect to an applicant, use of an over-the-counter drug,
or a prescription-only drug under a prescription for the
applicant, in the manner prescribed, will not disqualify the
applicant for employment if he/she satisfactorily explains such
use upon being informed of a positive test for controlled
substances. The District may require a note from the
applicant’s doctor concerning authorization for a prescription
and/or the possible side effects of the prescribed drugs.
C. Definitions
1. Accident:
a. Any accident, in which an employee is driving on District
business, and is at fault or suspected of having
significantly contributed to an accident. This shall apply
to employees covered by the Department of Transportation
(“DOT”) policy only if the accident is not subject to the
DOT policy.
b. Any accident, not involving the driving of a District
vehicle, that is reasonably believed by management or
credibly reported by another person to have been caused by
an on-duty employee and which results in serious physical
injury.
2. Controlled Substance:
a. Any drug or substance identified by section 40.85 of title
49 of the Code of Federal Regulations or sections 11054-
11058 of the California Health and Safety Code.
b. Any drug or substance.
3. Dilute Specimen: A specimen with creatinine and specific
gravity values that are lower than expected for human urine or
a specimen that is adulterated in any way.
4. Drug Paraphernalia: This term has the same definition as is
used in section 11364.5(d) of the California Health and Safety
Code and applies only to paraphernalia deemed unlawful under
section 11364.5(d).
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5. Manager/Management: A District employee who is designated as a
supervisor, manager, or executive.
6. Medical Review Officer: A person who is a licensed physician
and who is responsible for receiving and reviewing laboratory
results for substance tests and evaluating medical explanations
for certain test results.
7. Negative: A person is considered to have tested negative for a
substance if his/her substance test does not produce a positive
result.
8. Positive: A person is considered positive for alcohol if he/she
has a blood alcohol concentration of 0.04 or greater at the
time he/she submits to testing. A person is considered positive
for a controlled substance if he/she has any amount of a
controlled substance at or above a “cutoff concentration”
specified in section 40.87 of title 49 of the Code of Federal
Regulations at the time he/she submits to testing.
9. Reasonable Suspicion: A reasonable suspicion exists that a
person is under the influence of a substance if a trained
observer reasonably comes to the conclusion that the person is
under the influence of a substance due to having personally
observed, with respect to the person, some or all of the
effects specified in Appendix A of this policy.
Additionally, a reasonable suspicion exists that a person is
under the influence of a substance if an observer has seen the
person use a substance.
No one factor is sufficient to create a reasonable suspicion,
but an observer may make a reasonable assessment based on the
quantity, degree, and/or severity of applicable factors.
10. Refusal to Submit to Testing. Each of the following constitutes
a refusal to submit to testing:
a. Failing to immediately report for substance testing when
directed to do so;
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b. Failing to complete the testing process (including signing
any forms necessary to authenticate or identify a
specimen);
c. Failing to provide an adequate amount of breath, saliva, or
urine for a test;
d. Failing to cooperate with any aspect of the testing
process, including but not limited to refusing to wash
hands when directed, being confrontational with testing
personnel, or failing to comply with instructions in a
“direct observation,” as that term is used in section
40.197 of title 49 of the Code of Federal Regulations;
e. Using or wearing a prosthetic device to interfere with the
collection process;
f. Admitting to adulterating or diluting the specimen; or
g. Any act or failure to act that is intended to interfere
with the results.
11. Safety-Sensitive Duties: Duties which consist of any of the
following:
Operating any assigned District vehicle or equipment
(includes management and non-management employees);
Work in “confined spaces,” as that term is defined in
District regulations or CalOSHA regulations;
Performing maintenance on any vehicle;
Loading, unloading or attending any District vehicle or
equipment;
Access to sensitive/classified information related to
emergency response, safety or security duties;
Participation in Hazardous Waste Operations and Emergency
Response Confined Space Rescue Team;
Work performed at elevated or depth locations more than 4ft
above or below ground; or
Work involving the use or disposal of hazardous chemicals
as that term is defined in District regulations or Cal OSHA
regulations.
12. Serious Physical Injury: An injury to an employee that causes
the employee to be absent from work following an accident or
which requires hospitalization of the employee.
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13. Substance: Any substance containing alcohol or any controlled
substance.
14. Under the Influence: With respect to alcohol, a person is under
the influence at the time he/she is ordered to submit to
testing if he/she tests positive for alcohol at the time he/she
submits to testing. With respect to controlled substances, a
person is under the influence at the time he/she is ordered to
submit to testing if he/she tests positive for a controlled
substance at the time he/she submits to testing.
D. Conflicts with DOT Policy
As to applicants or employees to whom the DOT Policy applies, to
the extent this policy imposes a requirement that is less stringent
than the DOT Policy the more stringent requirements of the DOT
Policy will control.
E. Testing Procedures
When an employee or applicant is to be tested, the District shall
use the same testing procedures that are used for testing under the
DOT Drug and Alcohol Testing Policy, including the procedures for
testing a “split specimen,” as that term is defined in section 40.3
of title 49 of the Code of Federal Regulations. The service
providers shall comply with section 40.47 of title 49 of the Code
of Federal Regulations except they shall use a non-federal custody
and control form for applicants and employees.
1. Alcohol Testing
Alcohol testing will be conducted using evidential breath
testing devices (“EBT”) approved by the National Highway
Traffic Safety Administration. A screening test must be
conducted first. If the result is an alcohol concentration
level of less than 0.02, the test is considered a negative
test. If the alcohol concentration level is 0.02 or more, a
second confirmation test must be conducted. Alcohol testing
shall be accomplished by a laboratory certified by the U.S.
Department of Health and Human Services.
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2. Controlled Substance Testing
a. The test must be conducted by analyzing the employee's
urine.
b. The urinalysis shall be done at a laboratory certified by
the U.S. Department of Health and Human Services.
c. The urine specimen must be split into two bottles labeled
as "primary" and "split" specimen. Both bottles must be
sent to the laboratory.
d. If the urinalysis of the primary specimen tests positive
for the presence of illegal, controlled substances, the
employee has 72 hours from time of notification to request
that the split specimen be analyzed by a different
certified laboratory.
e. The urine sample shall be tested for the following:
marijuana metabolites, cocaine metabolites, opiates,
amphetamines and phencyclidine (“PCP”);
f. If the test is positive for one or more of the drugs listed
in subsection "e" above, a confirmation test must be
performed using gas chromatography/mass spectrometry
analysis.
g. All drug test results will be reviewed and interpreted by
the Medical Review Officer before they are reported to the
District.
h. With all positive drug tests, the Medical Review Officer
will contact the employee to determine if there is a
medical explanation for the positive test result. If
documentation is provided and the Medical Review Officer
determines that there is a legitimate medical use for the
prohibited drug, the test result may be reported to the
District as negative.
F. Testing
1. Persons Subject to Substance Screening
All applicants for employment, in conjunction with pre-
employment physical examination;
All employees reasonably suspected of using substances
while on duty or on District property or while working
while under the influence of substances;
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All employees reasonably suspected of possessing,
manufacturing, or distributing substances while on duty or
on District property;
Any employee at fault or reasonably suspected of having
significantly contributed to an accident while on duty;
Any employee who performs safety-sensitive duties whose
name is selected for testing pursuant to the District’s
random testing policy; or
Any District employee who applies for and is selected for a
position that will require the performance of safety-
sensitive duties.
2. Pre-employment, Promotions and Transfer Physicals
All applicants for employment shall, as part of their pre-
employment physical examination, submit to a urine analysis or
other legally authorized testing methods as selected by the
District for substances.
Any District employee who applies for a position that will
require the performance of safety-sensitive duties shall, as a
precondition to appointment to such position, submit to a urine
analysis or other legally authorized testing methods as
selected by the District for substances.
3. Random Testing of Managers and Safety-Sensitive Duty Employees
Each year the District shall randomly conduct substance tests
of employees who perform safety-sensitive duties. Based on the
number of such employees employed by the District on January 1,
the District shall conduct by the following December 31, a
number of tests for controlled substances equal to 25 percent
of the total number of employees who perform safety-sensitive
duties, or the minimum amount required by DOT regulations,
whichever is greater. Within the same time period, the District
shall randomly conduct a number of tests for alcohol equal to
25 percent of the same number of safety-sensitive employees, or
the minimum amount required by DOT regulations, whichever is
greater.
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Each year the District shall randomly conduct substance tests
of managers who are not randomly tested as employees performing
safety-sensitive duties. Based on the number of managers
employed by the District on January 1, the District shall
conduct by the following December 31 a number of tests for
controlled substances equal to 25 percent of the total number
of such managers, or the minimum amount required by DOT
regulations, whichever is greater. Within the same time period,
the District shall randomly conduct a number of tests for
alcohol equal to 25 percent of the same number of such
managers, or the minimum amount required by DOT regulations,
whichever is greater. Managers who perform safety-sensitive
duties and who are included in the pool of safety-sensitive
duty employees selected for random testing shall not be
included in the pool of non-safety-sensitive duty managers who
are selected for random testing.
The General Manager will contract with a service provider to
perform the random selection of employee names for substance
testing and select the dates upon which the employees will be
tested. The service provider must ensure that every safety-
sensitive employee has an equal chance of being selected each
time a name is randomly drawn and that any employee whose name
is selected is not exempt from having his/her name selected in
any subsequent drawing in the same year.
The service provider shall provide the selected names and dates
to the Safety and Security Specialist and/or Human Resources
Manager, who shall not disclose this information to any other
person except to the employee selected for testing and the
employee’s supervisor at the time that the employee is required
to submit to testing. If the employee is absent from duty on a
date that he/she has been randomly selected for testing, an
alternate name may be selected or he/she may be required to
submit to a test immediately upon returning to work, without
prior notice.
Upon being informed that he/she is required to submit to a
random test, the employee must report to the testing location,
as quickly as possible but no greater than one hour from being
informed, and complete the test as directed by personnel at the
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testing location. Upon completing testing, the employee shall
report back to duty if his/her duty day has not yet concluded.
Random testing is separate from the other forms of testing
described in this policy. An employee who submits to a
reasonable suspicion or post-accident test does not satisfy the
requirement that he/she submit to a random test when ordered.
4. Post-accident Testing
If an employee is involved in an accident that under this
policy requires that the employee submit to substance testing,
the employee’s supervisor shall immediately contact Human
Resources and the Safety and Security Specialist to report the
accident and the necessity of testing. After consultation with
Human Resources, if it is determined that the employee should
be tested, then the supervisor shall direct the employee to
report to the testing location and complete the test as
directed by personnel at the testing location. The supervisor
shall arrange to transport the employee to the testing
location. Upon completing testing, the employee shall report
back to duty if his/her duty day has not yet concluded, unless
a reasonable suspicion exists, based on the observation of the
employee’s supervisor and in consultation with Human Resources,
that the employee was under the influence of a substance at the
time or shortly after the accident. If such a reasonable
suspicion exists, the employee shall be released from duty for
the remainder of the day. The supervisor, in consultation with
Human Resources, thereafter shall determine on a day-to-day
basis whether to permit the employee to return to duty, until
the results of the test have returned. If an employee has been
ordered to submit to substance testing for post-accident
testing, and reasonable suspicion exists, the District may
place the employee on leave without pay pending the test
results. If the employee’s test results are negative, the
District shall restore any salary lost by the employee for the
days he/she was on leave, as though the employee had reported
for duty.
If the employee requires immediate medical assistance due to
the accident, such that he/she is unable to report to the
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testing location, the supervisor shall coordinate with the
hospital to conduct the test or require the employee to report
to the testing location as soon as is practicable.
The determination as to whether an employee is involved in an
accident shall be made by the employee’s supervisor in
consultation with the Safety and Security Specialist and Human
Resources, based on the information available to him/her. If it
cannot be immediately determined whether the employee was
involved in an accident, the supervisor shall not order the
employee to testing until a determination can be made.
The following criteria apply when conducting drug and alcohol
tests due to an accident:
a. A breath alcohol test must be administered as soon as
possible. Every effort should be made to ensure that a
breath alcohol test is performed within eight hours
following the accident. If testing has not occurred within
eight hours, attempts to test should be discontinued.
However, if testing did not occur within eight hours, and
reasonable suspicion existed at the time or shortly after
the accident the employee may resume duties with his/her
next shift that begins after the eight hours have passed.
Prior to the employee’s return, management shall observe
the employee’s condition before the employee is allowed to
resume duties to ensure that there is no longer reasonable
suspicion.
b. A drug screening test should be initiated prior to the 32nd
hour following an accident.
c. The employee must remain readily available for testing or
he or she will be deemed to have refused the test (see
Refusal to Submit to Testing). This rule does not require
the delay of necessary medical attention for injured
persons following the accident nor prohibit the employee
from leaving the scene to obtain assistance or necessary
emergency medical care.
d. An employee subject to post-accident testing may not use
alcohol within eight hours following the accident or before
an alcohol test, whichever comes first.
e. Testing will not be conducted on any deceased employee.
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f. The results of a breath or blood test for the use of
alcohol or a urine test for controlled substances,
conducted by Federal, State, or local officials having
independent authority for the test, shall be considered to
meet the requirements of this policy provided such results
are obtained by the employer, and conform to the applicable
Federal, State or local requirements.
g. The potentially affected employee will not be allowed to
proceed alone to or from the collection site. Time spent in
complying with post-accident testing is compensable.
h. Documentation of the activity being performed by the
employee that supports the determination to conduct post-
accident testing should be prepared and signed by the
supervisor requesting the test within 24 hours of the
accident or before the results of the drug test are
released, if possible.
5. Reasonable Suspicion Testing
If a supervisor, manager, the Safety and Security Specialist,
or other personnel has a reasonable suspicion that the employee
is under the influence of a substance while on District
property or on duty, he/she shall consult with Human Resources
of this observation to determine if testing is appropriate.
After consultation with Human Resources, if it is determined
that the employee should be tested, a supervisor shall direct
the employee to immediately report for testing and complete the
test as directed by personnel at the testing location. The
supervisor shall arrange to transport the employee to the
testing location. If the person who advises Human Resources of
the reasonable suspicion is not the employee’s supervisor,
Human Resources must immediately notify the supervisor of the
employee’s reasonable suspicion, and the supervisor shall
arrange to transport the employee to the testing location. The
supervisor(s) witnessing the impairment must document the
specific observations upon which the reasonable suspicion is
based.
Upon completing testing, the employee shall be released from
duty for the remainder of the day. The supervisor, in
consultation with Human Resources, thereafter, shall determine
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on a day-to-day basis whether to permit the employee to return
to duty, until the results of the test have returned. If an
employee has been ordered to submit to substance testing for
reasonable suspicion, the District may place the employee on
leave without pay pending the test results. If the employee’s
test results are negative, the District shall restore any
salary lost by the employee for the days he/she was on leave,
as though the employee had reported for duty.
The following criteria apply when conducting drug and alcohol
tests due to reasonable suspicion:
a. Alcohol
A breath alcohol test must be administered as soon as
possible. Every effort should be made to ensure that a
breath alcohol test is performed within eight hours. If
testing has not occurred within eight hours, attempts to
test should be discontinued and the employee may resume
duties with his/her next shift that begins after the eight
hours have passed. However, prior to the employee’s return,
management shall observe the employee’s condition before
the employee is allowed to resume duties to ensure that
there is no longer reasonable suspicion.
b. Controlled Substances
A urinalysis test for controlled substances must be
administered as soon as possible. Every effort should be
made to ensure the urinalysis is performed within 32 hours
of the observation.
c. The employee may not proceed alone to or from the
collection site. The supervisor or other appropriate person
making the observation shall arrange to transport the
employee to the testing site.
d. Documentation to support the determination to conduct
reasonable suspicion testing should be prepared and signed
by the person who made the determination within 24 hours of
the determination or before the results of the test are
released, whichever is earlier, if possible.
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6. Acknowledgment and Consent
Any employee subject to testing under this policy will be asked
to sign a form acknowledging the procedures governing testing,
and consenting to (1) the collection of a urine sample for the
purpose of determining the presence of alcohol or controlled
substances, and (2) the release to the District of medical
information regarding the test results. Refusal to sign the
agreement and consent form, or to submit to the drug test, will
result in the revocation of an applicant’s job offer, or will
subject an employee to discipline up to and including
termination.
7. Refusal to Submit to Testing
If an applicant refuses to submit to testing for any substance,
the applicant is disqualified for employment. If a District
employee who has applied for a position that requires the
performance of safety-sensitive duties refuses to submit to
testing for any substance, the employee is disqualified for
such position.
If an employee refuses to submit to testing for any substance,
the District may treat such refusal as an act of
insubordination. The District shall also impose the same
disciplinary action of dismissal for a refusal to test that it
would impose for a positive test result, so as not to encourage
employees to refuse to test in the hope of avoiding more severe
disciplinary action. The District may immediately place an
employee on leave without pay if the employee refuses to submit
for testing.
8. Refusal to Authorize Disclosure of Results of Testing
If an applicant refuses to authorize the disclosure of the
testing results to the District, the applicant is disqualified
for employment. If a District employee who has applied for a
position that requires the performance of safety-sensitive
duties refuses to authorize the disclosure of the test results
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to the District, the employee is disqualified for such
position.
If an employee refuses to authorize the disclosure of results
of testing to the District, the District will impose the same
disciplinary action of dismissal for a refusal to authorize the
disclosure of results of testing, that it would impose for a
positive test result, so as not to encourage employees to
refuse to authorize the disclosure of test results in the hope
of avoiding more severe disciplinary action.
9. Positive Test
If an applicant tests positive for a controlled substance,
he/she shall be disqualified for employment unless he/she meets
the requirements for the over-the-counter/prescription drug
exception set forth in Section B(2) of this policy. If a
District employee who has applied for a position that requires
the performance of safety-sensitive duties tests positive for a
substance, the employee is disqualified for such position.
If an employee tests positive for a substance, the employee
shall not be returned to duty and shall not receive pay during
his/her absence until the employee requests that the split
urine specimen be tested and the test of that specimen is not
positive for a substance.
This unpaid absence shall not be considered a disciplinary or
punitive action against the employee and any record of such
absence shall be maintained separately from the employee’s
personnel file. The absence is for the administrative and
safety interests of the District. This unpaid absence has no
effect on the District’s decision or ability to discipline an
employee for violating this policy.
If the Medical Review Officer determines that an employee’s
specimen is a dilute specimen and the specimen is positive for
a substance, the employee shall be considered to have tested
positive for that substance. If a dilute specimen produces a
negative result then the employee shall be required to submit
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to a second substance test, in the manner prescribed in section
40.197 of title 49 of the Code of Federal Regulations.
10. Request for Retest
If an employee tests positive for any substance, the employee
may, within 72 hours of being notified of the positive test
result, request of the Medical Review Officer that the split
specimen be tested. If the employee does not timely submit a
request, the employee shall be considered to have waived
his/her right to have the split specimen tested. The employee
shall pay for the cost of testing the split specimen. If the
employee is unable to pay this cost at the time of the request,
the District must ensure that the split specimen is tested even
if it means that the District may have to initially bear the
cost. The District may recover the cost from the employee at a
later time.
If a split specimen does not produce a positive result for a
substance, the District shall restore any salary lost by the
employee as a result of an absence imposed because of the
positive result on the first specimen. The employee shall be
considered to have not tested positive for a substance. The
District shall also reimburse the employee for the cost of the
retest if the employee paid for the retest.
The District may not request that the split specimen be tested.
G. Employee Assistance Programs
The District may refer any employee, including an employee who is
dismissed because of a positive test for a substance, to its
employee assistance program. If in any instance the District is
required to lawfully accommodate an employee’s disability related
to substance abuse, the District shall refer the employee to a
substance abuse professional.
H. Suspicion of Possession/Distribution/Manufacture of Controlled
Substances
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If a supervisor has a reasonable suspicion that an employee
unlawfully possesses or is distributing or manufacturing a
controlled substance or drug paraphernalia on or in District
property, or while on duty, the supervisor must report this
suspicion to Human Resources.
1. For purposes of Section H only, “reasonable suspicion” means
the following:
a. As to possession, the supervisor or a reporting credible
source must have seen a substance or item on the person of
the employee, in the employee’s work area, or in or on
District property assigned to the use of the employee that
a reasonable person would believe is a controlled substance
or drug paraphernalia, or have seen in any of the same
areas a container that a reasonable person would believe
contains a controlled substance or drug paraphernalia.
b. As to distribution, the supervisor must have seen the
employee convey to another person a substance or item that
a reasonable person would believe is a controlled substance
or drug paraphernalia, or have seen the employee convey a
container to another person that a reasonable person would
believe contains a controlled substance or drug
paraphernalia, or have received a report of observation of
the same from a credible source.
c. As to manufacture, the supervisor must have observed
conditions that a reasonable person would equate to the
manufacture of a controlled substance or drug
paraphernalia, which may include the observation of smell,
appearance, or sound. The supervisor must also have
observed conditions that would attribute suspected
manufacture to the employee, such as observing these
conditions in the employee’s work area or in or on District
property assigned to the use of the employee. If the
conditions are observed on the person of the employee, the
supervisor must consider whether the employee reported to
duty in such condition instead of changing to such
condition while on duty, or have received a report of
observation of the same from a credible source.
2. After a report of a reasonable suspicion has been made to Human
Resources, the Human Resources Manager must confer with
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management representatives to consider whether the reported
observation constituted reasonable suspicion, and decide what
steps to take in response to the reported observation.
a. If the decision is to take no further action, the matter
will be dismissed.
b. If the decision is to discuss the observation with the
employee, Human Resources and the supervisor will meet with
the employee to discuss the observation. If as a result of
the discussion, Human Resources and/or the supervisor
believe that a search is necessary, they will confer with
management representatives to determine whether to conduct
a search.
c. If the decision is to conduct a search, the search must be
limited to a search of District property, such as the
employee’s work area (including desk drawers and file
cabinets), District vehicle or equipment, and District
facilities. The search may be performed by the Human
Resources representative or another person designated by
the Human Resources representative, which may include the
supervisor. The employee does not need to be present during
the search. If any material is retrieved that appears to
bear out the supervisor’s reasonable suspicion, the Human
Resources representative must take possession of the
material.
d. If the decision is to conduct a search and the distribution
of controlled substances or drug paraphernalia is
reasonably suspected, the search may include not only the
work area/equipment of the employee suspected of
distributing controlled substances or drug paraphernalia,
but the work area/equipment of any employee whom was
observed receiving the item from the employee suspected of
distributing controlled substances or drug paraphernalia.
The receiving employee is entitled to the same rights as
the distributing employee.
e. Any search of the person of the employee or personally-held
possessions of the employee, such as a briefcase, purse,
pocketbook, backpack or personal vehicle, must be conducted
by a law enforcement officer. If the decision to conduct a
search extends to these areas, Human Resources should
contact law enforcement to request such a search.
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3. If the Human Resources representative takes possession of any
material as a result of the search, and the employee does not
confirm that it is a controlled substance or drug
paraphernalia, the District shall contact the local law
enforcement agency and will forward the substance to have the
item tested/analyzed to determine if it is a controlled
substance or drug paraphernalia. If a law enforcement officer
takes possession of an item as a result of a search, and the
employee does not confirm that it is a controlled substance or
drug paraphernalia, the District shall follow up with the law
enforcement agency to verify the item is a controlled substance
or drug paraphernalia. The employee shall not return to duty
and shall not receive pay during his/her absence until the law
enforcement agency has verified that the tested/analyzed item
is not positive for a controlled substance or drug
paraphernalia. If the tested/analyzed item does not produce a
positive result for a controlled substance or drug
paraphernalia, the District shall restore any salary lost by
the employee as a result of the absence.
I. Disciplinary Action
Disciplinary action for violations of this policy will be taken in
accordance with the District’s Discipline Policy and Procedures.
J. Accommodation of Individuals with Disabilities
Nothing in this policy shall be construed so as to relieve the
District of its lawful obligation to accommodate individuals with
disabilities.
K. Confidentiality
All alcohol and drug-testing records will be treated as
confidential.
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APPENDIX A
INDICATION OF DRUG USE
REMEMBER THAT THESE SYMPTOMS ARE ONLY INDICATIONS. THEY MAY BE A SIGN
OF SOMETHING OTHER THAN DRUG OR ALCOHOL USE.
PHYSICAL
1. Increased pulse rate 10. Nasal sores
2. Weak and rapid pulse 11. Slowed respirations
3. Increased blood pressure 12. Shallow respiration
4. Increased body temperature 13. Cold and clammy skin
5. Constricted pupils 14. Chills and sweats
6. Dilated pupils 15. Cramps
7. Bloodshot eyes 16. Nausea
8. Water eyes 17. Convulsions
9. Runny nose
MENTAL AND EMOTIONAL
1. Increased alertness 10. Disorientation
2. Excitation 11. Visual illusions
3. Anxiety 12. Hallucinations
4. Irritability 13. Paranoia
5 Euphoria 14. Delirium
6. Increased emotionality 15. Irrational fears
7. Impaired attention 16. Panic
8. Impaired memory 17. Depressed mood
9. Altered perceptions
BEHAVIORAL
1. Slurred speech 8. Hyperactivity
2. Staggered gait 9. Agitation
3. Fatigue 10. Argumentative
4. Apathy 11. Hostility
5. Drowsiness 12. Tremors
6. Loss of appetite 13. Insomnia
7. Increased appetite
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: July 6, 2016
SUBMITTED BY: Kevin Koeppen, Finance
Manager
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Adopt Resolution No. 4308 Amending Policy 35, the Medical
Reserve Fund for District Retirees, of the District’s Code of
Ordinances
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4308 amending Policy 35, the
Medical Reserve Fund for District Retirees, of the District’s Code of
Ordinances.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To request that the Board adopt Resolution No. 4308 amending Policy
35, the Medical Reserve Fund for District Retirees, of the District’s
Code of Ordinances. The policy needs to be updated to reflect the
current processes and procedures for the medical reserve fund.
ANALYSIS:
As a normal course of business, the District reviews its policies to
ensure they are effective and efficient. During a recent review of
the District’s Policy No. 35, Medical Reserve Fund for District
Retirees, staff identified modifications to the policy that are
needed to correspond with the District’s current practices.
Policy No. 35 was adopted June 6th, 2000 and was intended to provide a
guideline for the prudent management of the District’s medical
reserve fund for retired employees and Board members. At the time of
adoption, the District created a medical reserve for the OPEB plan.
That reserve held the OPEB’s long-term financial obligation. Under
this policy the District managed the medical retirement fund.
On March 5, 2008, the Board of Directors approved Resolution 4117,
which, amongst other items, authorized the General Manager to enter
into an agreement with the California Public Employee’s Retirement
System (PERS) to fund Other Post Employment Benefits (OPEB) through
CalPERS. By entering into this agreement the District’s OPEB reserve
funds could be moved into the PERS program where they would earn a
higher rate of return than the District managed fund. Upon execution
of this agreement, the OPEB Trust was established and the related
District reserves were subsequently transferred to the OPEB Trust
maintained by CalPERS. Today, the medical reserve is funded for the
annual estimated retiree medical costs and depleted as the actual
retiree medical costs are incurred throughout the year. In addition,
the District has an actuarial valuation performed every two years.
This valuation is used to determine the District’s financial
obligations for OPEB which are reported to the Board of Directors.
The recommendations in the attachments reflect the current purpose of
the medical reserve fund and related practices. These practices
include the periodic actuarial valuation, reporting requirements, and
the annual funding of the OPEB reserve.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
Demonstrate financial health through formalized policies, prudent
investing, and efficient operations.
LEGAL IMPACT:
None.
General Manager
Attachments:
A) Committee Action Form
B) Resolution No. 4308
Exhibit 1 – Policy 35 (Strike-through)
C) Proposed Policy 35
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4308 Amending Policy 35, the Medical
Reserve Fund for District Retirees, of the District’s Code
of Ordinances
COMMITTEE ACTION:
That the Board adopt Resolution No. 4308 amending Policy 35, the
Medical Reserve Fund for District Retirees, of the District’s
Code of Ordinances.
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.
RESOLUTION NO. 4308
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE OTAY WATER DISTRICT AMENDING POLICY 35
THE MEDICAL RESERVE FUND FOR DISTRICT
RETIREES OF THE DISTRICT’S CODE OF
ORDINANCES
WHEREAS, the Otay Water District Board of Directors has been
presented with an amended Policy 35 of the District’s Code of
Ordinances for the management of the Otay Water District; and
WHEREAS, the amended Policy 35 has been reviewed and
considered by the Board, and it is in the interest of the
District to adopt the amended policy; and
WHEREAS, the strike-through copy of the proposed policy is
attached as Exhibit 1 to this resolution; and
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by
the Board of Directors of the Otay Water District that the
amended Policy 35, incorporated herein as Attachment C, is hereby
adopted.
PASSED, APPROVED AND ADOPTED by the Board of Directors of
Otay Water District at a board meeting held this 6th day of July
2016, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
Attachment B
Page 1 of 2
________________________
President
ATTEST:
____________________________
District Secretary
Page 2 of 2
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
MEDICAL RESERVE FUND FOR DISTRICT RETIREES 35 6/7/00 7/6/16
Page 1 of 2
PURPOSE:
This policy is intended to provide a guideline for the prudent
management of the District’s medical reserve fund for retired
employees and Board Members. The goal of this policy is to
establish the District’s reserve policy for the funding of the
OPEB Reserve and related CALPERS Trust, which is performed in a
manner intended to reduce the impact of medical expense on the
annual operating budget.
The ultimate investment goal is the enhancement of the economic
status of the reserve fund and the reduction of the impact of
medical expense on the annual operating budget.
OBJECTIVE:
The fundamental financial objective of the medical reserve fund
is to establish and receive contributions from the general fund
operating reserves, which will remain approximately at the level
necessary to meet the long-termannual obligation of the
District’s existing benefit package. The medical reserve fund
is designed to accurately monitor and forecast expenditures and
revenues to the fullest extent possible, and insure the
investment of moneys to the fullest extent possible.
The District will endeavor to make medical and dental coverage
available for retired individuals and their dependents as
described in the Memorandum of Understanding between the
District and the Employees’ Associations. Retired employees
will be eligible for continuation of coverage if they satisfy
both the age and years of service requirements at the point
full-time employment ceases.
DELEGATION OF AUTHORITY:
Under authority granted by the Board of Directors, the General
Manager will administer the fund. The Department Head of
Finance will be responsible for establishing the fund in the
District's records with an initial deposit of $4,000,000,
provide reports, investing the fund balance to accrue interest
and provide the accounting for transactions.
Exhibit 1
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
MEDICAL RESERVE FUND FOR DISTRICT RETIREES 35 6/7/00 7/6/16
Page 2 of 2
REPORTING:
The Department Head of Finance Chief Financial Officer will
submit a report to the Board of Directors each year after the
completion of the District’s audit. This report will include
the beginning fund balance, all cash received and expended for
the fiscal year, and the closing balance as of June 30th. This
report will also include a complete description of the
investment of the reserve fund, the type of investments,
maturity dates and the average weighted yield.
PeriodicallyEvery two years, the District may request that will
have an actuarial evaluation completed report be completed to
determine the financial liability of the fund. A qualified
actuary, in accordance with the principles and procedures
established by the Actuarial Standards Board (ASB), should
perform the actuarial valuation. The Chief Financial Officer
will report the results of the actuarial evaluation to the Board
of Directors at least every five years. This report should
include the fund assets, projected funding and the projected
liability based on the most recent employee information.
Formatted: Normal
Formatted: Body Text
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
MEDICAL RESERVE FUND FOR DISTRICT RETIREES 35 6/7/00 7/6/16
Page 1 of 1
PURPOSE:
This policy is intended to provide a guideline for the prudent
management of the District’s medical reserve fund for retired
employees and Board Members. The goal of this policy is to establish
the District’s reserve policy for the funding of the OPEB Reserve and
related CALPERS Trust, which is performed in a manner intended to
reduce the impact of medical expense on the annual operating budget.
OBJECTIVE:
The fundamental financial objective of the medical reserve fund is to
establish and receive contributions from the general fund operating
reserves, which will remain approximately at the level necessary to
meet the annual obligation of the District’s existing benefit package.
The medical reserve fund is designed to accurately monitor and
forecast expenditures and revenues to the fullest extent possible.
The District will endeavor to make medical and dental coverage
available for retired individuals and their dependents as described in
the Memorandum of Understanding between the District and the
Employees’ Association. Retired employees will be eligible for
continuation of coverage if they satisfy both the age and years of
service requirements at the point full-time employment ceases.
DELEGATION OF AUTHORITY:
Under authority granted by the Board of Directors, the General Manager
will administer the fund.
REPORTING:
Every two years, the District will have an actuarial evaluation
completed to determine the financial liability of the fund. A
qualified actuary, in accordance with the principles and procedures
established by the Actuarial Standards Board (ASB), should perform
the actuarial valuation. The Chief Financial Officer will report the
results of the actuarial evaluation to the Board of Directors. This
report should include the fund assets, projected funding and
liability based on the most recent employee information.
Attachment C
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: July 6, 2016
SUBMITTED BY:
Andrea Carey, Customer
Service Manager
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Adopt Resolution No. 4310 Declaring an End to Water Shortage
Response Level 2
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4310 declaring an end to Water
Shortage Response Level 2.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To request that the Board adopt Resolution No. 4310 declaring an end
to the District’s Water Shortage Response Level 2. This action will
take the District out of all Water Shortage Response Levels. By
amending Section 39, we will also be in compliance with the Governor
of California’s Executive Order B-37-16. (See Staff Report “Adopt
Ordinance No. 556 Amending Section 39, Water Shortage Response
Program, of the District’s Code of Ordinances” dated July 6, 2016.)
ANALYSIS:
On August 6, 2014, the Board of Directors voted to declare a Water
Shortage Response Level 2 in response to unprecedented drought
conditions in the State of California.
Since that time, the State Water Resources Control Board (SWRCB) has
put forth emergency conservation regulations for all urban water
suppliers in order to address the drought conditions in the state.
Beginning May 5, 2015, the SWRCB implemented mandatory conservation
targets for all urban water suppliers. At this time, Otay’s
conservation target was 20% of 2013 levels. Customers responded and
exceeded conservation efforts averaging 26% from June through October
2015. In February 2016, the SWRCB adopted revised emergency
regulations. The revisions included credits for agencies in warmer
weather, credit for growth since 2013, and credit for those with new,
local, drought-resilient supply. With the certification of the
Claude “Bud” Lewis Carlsbad Desalination Plant as a drought-resilient
supply, San Diego water agencies were able to reduce their
conservation target by the maximum 8% which lowered Otay’s target
from 20% to 12%.
On May 18, 2016, the SWRCB replaced its state mandated conservation
target method with a supply-based approach. Now, urban water
suppliers may self-certify their supply conditions based on three
additional dry years. In San Diego, the San Diego County Water
Authority (CWA) has been allowed to certify supply sufficiency for
all member agencies. On June 9, 2016, CWA confirmed that its member
agencies have sufficient water supplies to meet demands even during
three additional dry years and will not be subject to state mandated
water-use reductions through January 2017.
In addition to an elimination of the state mandated water-use
reductions, the Metropolitan Water District of Southern California
also ended its supply allocations in May 2016. On May 26, 2016 CWA
rescinded its Drought Management Plan Stage 2 and instead is working
to establish a public awareness campaign to ensure a continued
community focus on drought awareness and a commitment to water use
efficiency throughout the county.
Given the current level of supply reliability, staff deems it
appropriate to end Water Shortage Response Level 2. Certain water
conservation practices remain in effect at all times such as
preventing water waste and repairing all leaks within 48 hours. In
addition, the District’s leak notification process and water
conservation website will continue to be used to communicate the
importance of long-term water use efficiency.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
Increase in water usage will have a positive effect on the District’s
revenues; however, it is unknown at this time what the increase will
be.
STRATEGIC GOAL:
Actively manage water supply and demand.
LEGAL IMPACT:
None.
Attachments:
Attachment A – Committee Action
Attachment B – Resolution No. 4310
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4310 Declaring an End to Water
Shortage Response Level 2
COMMITTEE ACTION:
That the Board approve the Finance, Administration and Communications
Committee recommendation to adopt Resolution No. 4310 declaring an end
to Water Shortage Response Level 2.
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.
Page 1 of 2
RESOLUTION NO. 4310
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE OTAY WATER DISTRICT
DECLARING AN END TO THE DISTRICT’S
WATER SHORTAGE RESPONSE LEVEL 2
WHEREAS, the Otay Water District Board of Directors had
declared a Water Shortage Response Level 2 on August 6, 2014 in
response to unprecedented drought conditions in the State of
California; and
WHEREAS, on May 18, 2016 the State Water Resources Control
Board replaced its state mandated conservation target method with
a supply-based approach; and
WHEREAS, the San Diego County Water Authority (CWA) has been
allowed to certify supply sufficiency for all member agencies and
on June 9, 2016, CWA confirmed that its member agencies have
sufficient water supplies to meet demands even during three
additional dry years and will not be subject to state mandated
water-use reductions through January 2017; and
WHEREAS, the Metropolitan Water District (MWD) has ended its
supply allocations in May 2016; and
WHEREAS, CWA has rescinded its Drought Management Plan Stage
2 on May 26, 2016: and
WHEREAS, Section 39.09 of the District’s Code of Ordinances,
Procedures for Determination and Notification of Water Shortage
Response Level, states that the District’s Board may declare an
end to a Water Shortage Response Level by the adoption of a
resolution at any regular or special meeting;
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by
the Board of Directors of the Otay Water District that the Water
Attachment B
Page 2 of 2
Shortage Response Level 2 be declared ended effective immediately
upon adoption of this resolution.
PASSED, APPROVED AND ADOPTED by the Board of Directors of
Otay Water District at a board meeting held this 6th day of July
2016, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
________________________
President
ATTEST:
____________________________
District Secretary
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: July 6, 2016
SUBMITTED BY:
Andrea Carey, Customer
Service Manager
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Adopt Ordinance No. 556 Amending Section 39, Water Shortage
Response Program, of the District’s Code of Ordinances
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Ordinance No. 556 amending Section 39, Water
Shortage Response Program, of the District’s Code of Ordinances.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To comply with the Governor of California’s Executive Order B-37-16
Making Water Conservation a California Way of Life.
ANALYSIS:
On May 9, 2016, Governor Brown signed Executive Order B-37-16 Making
Water Conservation a California Way of Life, to continue to promote
conservation during California’s multi-year drought. The Executive
Order directs state agencies to update temporary emergency water
restrictions and transition to more permanent long-term improvements
in water use.
In addition to allowing the State Water Resources Control Board to
adjust water conservation regulations through the end of January
2017, the Executive Order also permanently prohibits the following
practices that waste potable water:
1) Hosing off sidewalks, driveways and other hardscapes;
2) Washing automobiles with hoses not equipped with a shut-off
nozzle;
3) Using non-recirculated water in a fountain or other decorative
water features;
4) Water lawns in a manner that causes runoff, or within 48 hours
after measurable precipitation; and
5) Irrigating ornamental turf on public street medians.
Many of the items above are listed within the various shortage levels
in Section 39, Water Shortage Response Program, of the District’s
Code of Ordinances. Staff is proposing to move these items to an
existing list of permanent conservation practices within Section 39.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
Actively manage water supply and demand.
LEGAL IMPACT:
None.
Attachments:
Attachment A – Committee Action
Attachment B – Ordinance No. 556
Exhibit 1- Section 39 Strike-through
Attachment C – Section 39 Proposed
Attachment D - Executive Order B-37-16
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Ordinance No. 556 Amending Section 39, Water Shortage
Response Program, of the District’s Code of Ordinances
COMMITTEE ACTION:
That the Board approve the Finance, Administration and Communications
Committee recommendation to adopt Ordinance No. 556 amending Section
39, Water Shortage Response Program, of the District’s Code of
Ordinances.
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. 556
AN ORDINANCE OF THE BOARD OF DIRECTORS OF
THE OTAY WATER DISTRICT
AMENDING SECTION 39 WATER SHORTAGE
RESPONSE PROGRAM
OF THE DISTRICT’S CODE OF ORDINANCES
BE IT ORDAINED by the Board of Directors of Otay Water
District that the District’s Code of Ordinances Section 39,
Water Shortage Response Program be amended as per Exhibit 1 to
this resolution.
NOW, THEREFORE, BE IT RESOLVED that the new proposed
Section 39, Water Shortage Response Program (Attachment C) of
the Code of Ordinances shall become effective July 6, 2016.
PASSED, APPROVED AND ADOPTED by the Board of Directors of
the Otay Water District at a regular meeting duly held this 6th
day of July 2016, by the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
President
ATTEST:
__________________________
District Secretary
Attachment B
39-1
SECTION 39. WATER SHORTAGE RESPONSE PROGRAM
39.01 DECLARATION OF NECESSITY AND INTENT
(a) This Section establishes water management
requirements necessary to conserve water, enable effective
water supply planning, assure reasonable and beneficial use
of water, prevent waste of water, prevent unreasonable use
of water, prevent unreasonable method of use of water
within the District in order to assure adequate supplies of
water to meet the needs of the public, and further the
public health, safety, and welfare, recognizing that water
is a scarce natural resource that requires careful
management not only in times of a water shortage, but at
all times.
(b) This Section establishes regulations to be
implemented during times of declared water shortages, or
declared water shortage emergencies. It establishes four
levels of actions to be implemented in times of shortage,
with increasing restrictions on water use in response to
worsening water shortage conditions and decreasing
available supplies.
(c) The Level 1 water shortage response condition
practices are voluntary and will be reinforced through
local and regional public education and awareness measures
that may be funded in part by the District. Beginning at
the level 2 Water Shortage Response Condition, the District
may implement water shortage pricing. When a water
shortage response Level 2 condition is declared, all
conservation practices and water-use restrictions may
become mandatory and increasingly restrictive in order to
attain escalating conservation goals.
(d) During a Water Shortage Response Level 3
condition or higher, the water conservation practices and
water use restrictions established by this ordinance are
mandatory and violations are subject to criminal, civil,
and administrative penalties and remedies specified in
Section 72 of this ordinance.
Exhibit 1
39-2
39.02 DEFINITIONS APPLICABLE TO THE PROGRAM
(a) The following words and phrases whenever used in
this Section shall have the meaning defined in this sub-
section:
1. “Grower” refers to those engaged in the
growing or raising, in conformity with recognized
practices of husbandry, for the purpose of commerce,
trade, or industry, or for use by public educational
or correctional institutions, of agricultural,
horticultural or floricultural products, and produced:
(1) for human consumption or for the market, or (2)
for the feeding of fowl or livestock produced for
human consumption or for the market, or (3) for the
feeding of fowl or livestock for the purpose of
obtaining their products for human consumption or for
the market. “Grower” does not refer to customers who
purchase water subject to the Metropolitan Interim
Agricultural Water Program or the Water Authority
Special Agricultural Rate programs.
2. “Water Authority” means the San Diego County
Water Authority.
3. “DMP” means the Water Authority’s Drought
Management Plan in existence on the effective date of
this Section and as readopted or amended from time to
time, or an equivalent plan of the Water Authority to
manage or allocate supplies during shortages.
4. “Metropolitan” means the Metropolitan Water
District of Southern California.
5. “Person” means any natural person,
corporation, public or private entity, public or
private association, public or private agency,
government agency or institution, school district,
college, university, or any other user of water
provided by the District.
39-3
39.03 APPLICATION
(a) The provisions of this Section apply to any
person in the use of any water provided by the
District.
(b) This Section is intended solely to further the
conservation of water. It is not intended to
implement any provision of federal, State, or local
statutes, ordinances, or regulations relating to
protection of water quality or control of drainage or
runoff. Refer to the local jurisdiction or Regional
Water Quality Control Board for information on any
storm water ordinances and storm water management
plans.
(c) Nothing in this Section is intended to affect or
limit the ability of the District to declare and
respond to an emergency, including an emergency that
affects the ability of the District to supply water.
(d) The provisions of this Section do not apply to
use of water from private wells or to recycled water.
(e) Nothing in this Section shall apply to use of
water that is subject to a special supply program,
such as the Metropolitan Interim Agricultural Water
Program or the Water Authority Special Agricultural
Rate programs. Violations of the conditions of
special supply programs are subject to the penalties
established under the applicable program. A person
using water subject to a special supply program and
other water provided by the District is subject to
this Section in the use of the other water.
(f) In addition, customers are encouraged not to wash
down paved surfaces, including but not limited to
sidewalks, driveways, parking lots, tennis courts, or
patios, except when it is necessary to alleviate
safety or sanitation hazards.
At all times, the following practices shall be in effect:
1. Prevent water waste resulting from
inefficient irrigation, such as runoff or
overspray. Similarly, stop water flows
39-4
onto non-targeted areas, such as adjacent
property, non-irrigated areas, hardscapes,
roadways, or structures.
2. Serve and refill water in restaurants and
other food service establishments only
upon request.
3. Offer guests in hotels, motels, and other
commercial lodging establishments the
option of not laundering towels and linens
daily.
4. Use only re-circulated water in fountains
or other decorative water features.
5. Wash automobiles with a hose equipped only
with a positive shut-off nozzle.
3.6. IIrrigating ornamental turf on public
street medians only with reclaimed
recycled water.
7. Repair all water leaks within forty-eight
(48) hours (48) of notification by the
District unless other arrangements are
made with the General Manager or designee.
8. Irrigation is not allowed during a
rainstorm or for fourtyforty-eight (48)
hours after one-quarter inch or more of
rainfall is measured at Lindbergh Field.
4.9. No washing down of paved surfaces,
including but not limited to sidewalks,
drive ways, parking lots, tennis courts,
or patios, except when it is necessary to
alleviate safety or sanitation hazards.
39.04 WATER SHORTAGE RESPONSE LEVEL 1 – SUPPLY WATCH
CONDITION
(a) A Water Shortage Response Level 1 condition is
also referred to as a “Supply Watch” condition. A Level 1
condition applies when the Water Authority notifies its
member agencies that due to water shortage or other supply
reductions, there is a reasonable probability there will be
39-5
supply shortages and that a consumer demand reduction of up
to 10 percent is required in order to ensure that
sufficient supplies will be available to meet anticipated
demands. The General Manager shall declare the existence
of a Level 1 and take action to implement the Level 1
conservation practices identified in this Section.
(b) During a Level 1 condition, the District will
increase its public education and outreach efforts to
emphasize increased public awareness of the need to
implement the following water conservation practices. The
same water conservation practices may become mandatory if
the District declares a Level 2 condition:
1. Irrigate residential and commercial
landscape before 10 a.m. and after 6 p.m. only.
Customers are to water no more than three days a week
using the suggested watering schedule as found on the
District’s web page. New plantings and newly seeded
areas are exempt for 30 days.
2. Use a hand-held hose equipped with a
positive shut-off nozzle or bucket to water landscaped
areas, including trees and shrubs located on
residential and commercial properties that are not
irrigated by a landscape irrigation system.
3. Irrigate nursery and commercial grower’s
products before 10 a.m. and after 6 p.m. only.
Watering is permitted at any time with a hand-held
hose equipped with a positive shut-off nozzle, a
bucket, or when a drip/micro-irrigation
system/equipment is used. Irrigation of nursery
propagation beds is permitted at any time. Watering
of livestock is permitted at any time.
4. Use re-circulated water to operate
ornamental fountains.
5. Wash vehicles, including but not limited to
motorcycles, farm equipment, trailers, boats and boat
engines and motorhomes using a bucket and a hand-held
hose with positive shut-off nozzle, mobile high
pressure/low volume wash system, or at a commercial
site that re-circulates (reclaims) water on-site.
Vehicle washing is limited to once per week.
39-6
6. Use recycled or non-potable water for
construction purposes when available.
39.05 WATER SHORTAGE RESPONSE LEVEL 2 – SUPPLY ALERT
CONDITION
(a) A Water Shortage Response Level 2 condition is
also referred to as a “Supply Alert” condition. A Level 2
condition applies when the Water Authority notifies its
member agencies that due to cutbacks caused by water
shortage or other reduction in supplies, a consumer demand
reduction of 11 to 20 percent is required in order to have
sufficient supplies available to meet anticipated demands.
The District Board of Directors may declare the existence
of a Level 2 condition and implement the Level 2
conservation practices identified in this section of the
ordinance. The District may decide to implement some or
all of the Level 1 practices.
(b) All persons using District water shall make every
effort to comply with Level 1 water conservation practices
during a Level 2, and also to comply with the following
additional conservation measures:
1. Limit residential and commercial landscape
irrigation to no more than three (3) days per week.
This section shall not apply to homeowner’s vegetable
gardens, fruit trees, commercial growers, or
nurseries.
2. Limit lawn watering and landscape irrigation
using sprinklers to no more than fifteen (15) minutes
per watering station per day. During the months of
November through April, landscape irrigation shall not
exceed seven (7) minutes per water watering station
per assigned day. Watering times may need to be
shortened to avoid run-off. This provision does not
apply to landscape irrigation systems using water
efficient devices, including but not limited to:
weather based controllers, drip/micro-irrigation
systems, rotating sprinkler nozzles and stream rotor
sprinklers.
3. Water landscaped areas, including trees and
shrubs located on residential and commercial
properties, and not irrigated by a landscape
39-7
irrigation system on the same schedule set forth above
by using a bucket, hand-held hose with positive shut-
off nozzle, or low-volume non-spray irrigation.
4. Irrigation is not allowed during a rainstorm
and for forty-eight hours after one-quarter inch or
more of rainfall is measured at Lindbergh Field. No
washing down of paved surfaces, including but not
limited to sidewalks, driveways, parking lots, tennis
courts, or patios, except when it is necessary to
alleviate safety or sanitation hazards.
39.06 WATER SHORTAGE RESPONSE LEVEL 3 – SUPPLY CRITICAL
CONDITION
(a) A Water Shortage Response Level 3 condition is
also referred to as a “Supply Critical” condition. A Level
3 condition applies when the Water Authority notifies its
member agencies that due to increasing cutbacks caused by
water shortage or other reduction of supplies, a consumer
demand reduction of between 21 and 40 percent is required
in order to have sufficient supplies available to meet
anticipated demands. The District Board of Directors may
declare the existence of a Level 3 condition and implement
the Level 3 conservation practices identified in this
Section.
(b) All persons using District water shall comply
with Level 1 and Level 2 water conservation practices
during a Level 3 condition and shall also comply with the
following additional mandatory conservation measures:
1. Limit residential and commercial landscape
irrigation to no more than two (2) assigned days per
week on a schedule established by the General Manager
or designee and posted by the District. During the
months of November through April, landscape irrigation
is limited to no more than once per week on a schedule
established by the General Manager or designee and
posted by the District. This section shall not apply
to commercial growers or nurseries.
2. Water landscaped areas, including trees and
shrubs located on residential and commercial
properties, and not irrigated by a landscape
irrigation system on the same schedule set forth above
39-8
by using a bucket, hand-held hose with a positive
shut-off nozzle, or low-volume non-spray irrigation.
3. Stop filling or re-filling ornamental lakes
or ponds, except to the extent needed to sustain
aquatic life, provided that such animals are of
significant value and have been actively managed
within the water feature prior to declaration of a
water shortage response level under this Section.
4. Stop operating non-residential ornamental
fountains or similar decorative water features unless
recycled water is used.
5. Stop washing vehicles except at commercial
carwashes that re-circulate water, or by high
pressure/low volume wash systems. If a commercial car
wash cannot accommodate the vehicle because of the
vehicle size or type, such as RVs, horse trailers,
boats and commercial vehicles, customers will be
allowed to wash vehicles using a bucket and a hand-
held hose with positive shut-off nozzle, mobile high
pressure/low volume wash system.
(c) Upon the declaration of a Level 3 condition, the
District may suspend new potable water service and
statements of immediate ability to serve or provide potable
water service (such as, will serve letters, certificates,
or letters of availability) except under the following
circumstances:
1. A valid, unexpired building permit has been
issued for the project; or
2. The project is necessary to protect the
public’s health, safety, and welfare; or
3. The applicant provides substantial evidence
of an enforceable commitment that water demands for
the project will be offset prior to the provision of a
new water meter(s) to the satisfaction of the
District.
This provision shall not be construed to preclude the
resetting or turn-on of meters to provide continuation of
water service or to restore service that has been
interrupted.
39-9
(d) Upon the declaration of a Level 3 condition, the
District will suspend consideration of annexations to its
service area.
(e) The District may establish a water allocation for
property served by the District using a method that takes
into consideration the implementation of conservation
methods or the installation of water saving devices. If
the District establishes a water allocation, it shall
provide notice of the allocation by including it in the
regular billing statement for the fee or charge or by any
other mailing to the address to which the District
customarily mails the billing statement for fees or charges
for on-going water service. Following the effective date
of the water allocation as established by the District, any
person that uses water in excess of the allocation shall be
subject to a penalty for each billing unit of water in
excess of the allocation. The penalty for excess water
usage shall be cumulative to any other remedy or penalty
that may be imposed for violation of this Section.
39.07 WATER SHORTAGE RESPONSE LEVEL 4 – SUPPLY
EMERGENCY CONDITION
(a) A Water Shortage Response Level 4 condition is
also referred to as a “Supply Emergency” condition. A
Level 4 condition applies when the Water Authority Board of
Directors declares a water shortage emergency pursuant to
California Water Code section 350 and notifies its member
agencies that Level 4 requires a demand reduction of more
than 40 percent in order for the District to have maximum
supplies available to meet anticipated demands. The
District shall declare a Level 4 in the manner and on the
grounds provided in California Water Code section 350.
(b) All persons using District water shall comply
with conservation measures required during Level 1, Level
2, and Level 3 conditions and shall also comply with the
following additional mandatory conservation measures:
1. Stop all landscape irrigation, except crops
and landscape products of commercial growers and
nurseries. This restriction shall not apply to the
following categories of use unless the District has
determined that recycled water is available and may be
lawfully applied to the use.
39-10
A. Maintenance of trees and shrubs that
are watered on the same schedule as noted in the
Level 3 Condition, by using a bucket, hand-held
hose with a positive shut-off nozzle, or low-
volume non-spray irrigation;
B. Maintenance of existing landscaping
necessary for fire protection as specified by the
Fire Marshal of the local fire protection agency
having jurisdiction over the property to be
irrigated;
C. Maintenance of existing landscaping for
erosion control;
D. Maintenance of plant materials
identified to be rare or essential to the well
being of rare animals;
E. Maintenance of landscaping within
active public parks and playing fields, day care
centers, school grounds, cemeteries, and golf
course greens, provided that such irrigation does
not exceed two (2) days per week according to the
schedule established under the District’s Level 3
Condition;
F. Watering of livestock; and
G. Public works projects and actively
irrigated environmental mitigation projects.
2. Repair all water leaks within twenty-four
(24) hours of notification by the District unless
other arrangements are made with the District.
(c) The District may establish a water allocation for
property served by the District. If the District
establishes water allocation it shall provide notice of the
allocation by including it in the regular billing statement
for the fee or charge or by any other mailing to the
address to which the District customarily mails the billing
statement for fees or charges for on-going water service.
Following the effective date of the water allocation as
established by the District, any person that uses water in
39-11
excess of the allocation shall be subject to a penalty for
each billing unit of water in excess of the allocation.
The penalty for excess water usage shall be cumulative to
any other remedy or penalty that may be imposed for
violation of any provision of this Section.
39.08 CORRELATION BETWEEN DROUGHT MANAGEMENT PLAN (DMP)
AND WATER SHORTAGE RESPONSE LEVELS
(a) The correlation between the Water Authority’s DMP
stages and the District’s water shortage response levels
identified in this Section of the Code of Ordinance is
described herein. Under DMP Stage 1, the District would
implement Water Shortage Response Level 1 actions. Under
DMP Stage 2, the District would implement Water Shortage
Response Level 1 or Level 2 actions. Under DMP Stage 3,
the District would implement Water Shortage Response Level
2, Level 3, or Level 4 actions.
(b) The water shortage response levels identified in
this Section correspond with the Water Authority DMP as
identified in the following table:
Water Shortage
Response Levels
Use
Restrictions
Conservation
Target
DMP
Stage
1 - Supply Watch Voluntary Up to 10% Stage 1
or 2
2 - Supply Alert Mandatory 11 to 20% Stage 2
or 3
3 - Supply Critical Mandatory 21 to 40% Stage 3
4 - Supply
Emergency
Mandatory Above 40% Stage 3
39.09 PROCEDURES FOR DETERMINATION AND NOTIFICATION OF
WATER SHORTAGE RESPONSE LEVEL
(a) The existence of a Water Shortage Response Level
1 condition may be declared by the General Manager upon a
written determination of the existence of the facts and
circumstances supporting the determination. A copy of the
written determination shall be filed with the Clerk or
Secretary of the District and provided to the District
Board of Directors. The General Manager may publish a
notice of the determination of existence of Water Shortage
Response Level 1 condition in one or more newspapers,
including a newspaper of general circulation within the
39-12
District. The District will also post notice of the
condition on their website.
(b) The existence of Water Shortage Response Level 2
or Level 3 conditions may be declared by resolution of the
District Board of Directors adopted at a regular or special
public meeting held in accordance with State law. The
mandatory conservation measures applicable to Water
Shortage Response Level 2 or Level 3 conditions shall take
effect on the tenth (10) day after the date the response
level is declared. Within five (5) days following the
declaration of the response level, the District shall
publish a copy of the resolution in a newspaper used for
publication of official notices.
(c) The existence of a Water Shortage Response Level
4 condition may be declared in accordance with the
procedures specified in California Water Code sections 350
to 352 as note below:
350. The governing body of a distributor of a public water
supply, whether publicly or privately owned and including a
mutual water company, may declare a water shortage emergency
condition to prevail within the area served by such distributor
whenever it finds and determines that the ordinary demands and
requirements of water consumers cannot be satisfied without
depleting the water supply of the distributor to the extent that
there would be insufficient water for human consumption,
sanitation, and fire protection.
351. Except in event of a breakage or failure of a dam, pump,
Pipe line or conduit causing an immediate emergency, the
declaration shall be made only after a public hearing at which
consumers of such water supply shall have an opportunity to be
heard to protest against the declaration and to present their
respective needs to said governing board.
352. Notice of the time and place of hearing shall be published
pursuant to Section 6061 of the Government Code at least seven
days prior to the date of hearing in a newspaper printed,
published, and circulated within the area in which the water
supply is distributed, or if there is no such newspaper, in any
newspaper printed, published, and circulated in the county in
which the area is located.
The mandatory conservation measures applicable to Water
Shortage Response Level 4 conditions shall take effect on
the tenth (10) day after the date the response level is
declared. Within five (5) days following the declaration
of the response level, the District shall publish a copy of
the resolution in a newspaper used for publication of
39-13
official notices. If the District establishes a water
allocation, it shall provide notice of the allocation by
including it in the regular billing statement for the fee
or charge or by any other mailing to the address to which
the District customarily mails the billing statement for
fees or charges for on-going water service. Water
allocation shall be effective on the fifth (5) day
following the date of mailing or at such later date as
specified in the notice.
(d) The District Board of Directors may declare an
end to a Water Shortage Response Level by the adoption of a
resolution at any regular or special meeting held in
accordance with State law.
39-1
SECTION 39. WATER SHORTAGE RESPONSE PROGRAM
39.01 DECLARATION OF NECESSITY AND INTENT
(a) This Section establishes water management
requirements necessary to conserve water, enable effective
water supply planning, assure reasonable and beneficial use
of water, prevent waste of water, prevent unreasonable use
of water, prevent unreasonable method of use of water
within the District in order to assure adequate supplies of
water to meet the needs of the public, and further the
public health, safety, and welfare, recognizing that water
is a scarce natural resource that requires careful
management not only in times of a water shortage, but at
all times.
(b) This Section establishes regulations to be
implemented during times of declared water shortages, or
declared water shortage emergencies. It establishes four
levels of actions to be implemented in times of shortage,
with increasing restrictions on water use in response to
worsening water shortage conditions and decreasing
available supplies.
(c) The Level 1 water shortage response condition
practices are voluntary and will be reinforced through
local and regional public education and awareness measures
that may be funded in part by the District. Beginning at
the level 2 Water Shortage Response Condition, the District
may implement water shortage pricing. When a water
shortage response Level 2 condition is declared, all
conservation practices and water-use restrictions may
become mandatory and increasingly restrictive in order to
attain escalating conservation goals.
(d) During a Water Shortage Response Level 3
condition or higher, the water conservation practices and
water use restrictions established by this ordinance are
mandatory and violations are subject to criminal, civil and
administrative penalties and remedies specified in Section
72 of this ordinance.
Attachment C
39-2
39.02 DEFINITIONS APPLICABLE TO THE PROGRAM
(a) The following words and phrases whenever used in
this Section shall have the meaning defined in this sub-
section:
1. “Grower” refers to those engaged in the
growing or raising, in conformity with recognized
practices of husbandry, for the purpose of commerce,
trade, or industry, or for use by public educational
or correctional institutions, of agricultural,
horticultural or floricultural products, and produced:
(1) for human consumption or for the market, or (2)
for the feeding of fowl or livestock produced for
human consumption or for the market, or (3) for the
feeding of fowl or livestock for the purpose of
obtaining their products for human consumption or for
the market. “Grower” does not refer to customers who
purchase water subject to the Metropolitan Interim
Agricultural Water Program or the Water Authority
Special Agricultural Rate programs.
2. “Water Authority” means the San Diego County
Water Authority.
3. “DMP” means the Water Authority’s Drought
Management Plan in existence on the effective date of
this Section and as readopted or amended from time to
time, or an equivalent plan of the Water Authority to
manage or allocate supplies during shortages.
4. “Metropolitan” means the Metropolitan Water
District of Southern California.
5. “Person” means any natural person,
corporation, public or private entity, public or
private association, public or private agency,
government agency or institution, school district,
college, university, or any other user of water
provided by the District.
39-3
39.03 APPLICATION
(a) The provisions of this Section apply to any
person in the use of any water provided by the
District.
(b) This Section is intended solely to further the
conservation of water. It is not intended to
implement any provision of federal, State, or local
statutes, ordinances, or regulations relating to
protection of water quality or control of drainage or
runoff. Refer to the local jurisdiction or Regional
Water Quality Control Board for information on any
storm water ordinances and storm water management
plans.
(c) Nothing in this Section is intended to affect or
limit the ability of the District to declare and
respond to an emergency, including an emergency that
affects the ability of the District to supply water.
(d) The provisions of this Section do not apply to
use of water from private wells or to recycled water.
(e) Nothing in this Section shall apply to use of
water that is subject to a special supply program,
such as the Metropolitan Interim Agricultural Water
Program or the Water Authority Special Agricultural
Rate programs. Violations of the conditions of
special supply programs are subject to the penalties
established under the applicable program. A person
using water subject to a special supply program and
other water provided by the District is subject to
this Section in the use of the other water.
At all times, the following practices shall be in effect:
1. Prevent water waste resulting from
inefficient irrigation, such as runoff or
overspray. Similarly, stop water flows
onto non-targeted areas, such as adjacent
property, non-irrigated areas, hardscapes,
roadways, or structures.
39-4
2. Serve and refill water in restaurants and
other food service establishments only
upon request.
3. Offer guests in hotels, motels, and other
commercial lodging establishments the
option of not laundering towels and linens
daily.
4. Use only re-circulated water in fountains
or other decorative water features.
5. Wash automobiles with a hose equipped only
with a positive shut-off nozzle.
6. Irrigating ornamental turf on public
street medians only with recycled water.
7. Repair all water leaks within forty-eight
hours (48) of notification by the District
unless other arrangements are made with
the General Manager or designee.
8. Irrigation is not allowed during a
rainstorm or for forty-eight (48) hours
after one-quarter inch or more of rainfall
is measured at Lindbergh Field.
9. No washing down of paved surfaces,
including but not limited to sidewalks,
driveways, parking lots, tennis courts, or
patios, except when it is necessary to
alleviate safety or sanitation hazards.
39.04 WATER SHORTAGE RESPONSE LEVEL 1 – SUPPLY WATCH
CONDITION
(a) A Water Shortage Response Level 1 condition is
also referred to as a “Supply Watch” condition. A Level 1
condition applies when the Water Authority notifies its
member agencies that due to water shortage or other supply
reductions, there is a reasonable probability there will be
supply shortages and that a consumer demand reduction of up
to 10 percent is required in order to ensure that
sufficient supplies will be available to meet anticipated
demands. The General Manager shall declare the existence
of a Level 1 and take action to implement the Level 1
conservation practices identified in this Section.
39-5
(b) During a Level 1 condition, the District will
increase its public education and outreach efforts to
emphasize increased public awareness of the need to
implement the following water conservation practices. The
same water conservation practices may become mandatory if
the District declares a Level 2 condition:
1. Irrigate residential and commercial
landscape before 10 a.m. and after 6 p.m. only.
Customers are to water no more than three days a week
using the suggested watering schedule as found on the
District’s web page. New plantings and newly seeded
areas are exempt for 30 days.
2. Use a hand-held hose equipped with a
positive shut-off nozzle or bucket to water landscaped
areas, including trees and shrubs located on
residential and commercial properties that are not
irrigated by a landscape irrigation system.
3. Irrigate nursery and commercial grower’s
products before 10 a.m. and after 6 p.m. only.
Watering is permitted at any time with a hand-held
hose equipped with a positive shut-off nozzle, a
bucket, or when a drip/micro-irrigation
system/equipment is used. Irrigation of nursery
propagation beds is permitted at any time. Watering
of livestock is permitted at any time.
5. Wash vehicles, including but not limited to
motorcycles, farm equipment, trailers, boats and boat
engines and motorhomes using a bucket and a hand-held
hose with positive shut-off nozzle, mobile high
pressure/low volume wash system, or at a commercial
site that re-circulates (reclaims) water on-site.
Vehicle washing is limited to once per week.
6. Use recycled or non-potable water for
construction purposes when available.
39-6
39.05 WATER SHORTAGE RESPONSE LEVEL 2 – SUPPLY ALERT
CONDITION
(a) A Water Shortage Response Level 2 condition is
also referred to as a “Supply Alert” condition. A Level 2
condition applies when the Water Authority notifies its
member agencies that due to cutbacks caused by water
shortage or other reduction in supplies, a consumer demand
reduction of 11 to 20 percent is required in order to have
sufficient supplies available to meet anticipated demands.
The District Board of Directors may declare the existence
of a Level 2 condition and implement the Level 2
conservation practices identified in this section of the
ordinance. The District may decide to implement some or
all of the Level 1 practices.
(b) All persons using District water shall make every
effort to comply with Level 1 water conservation practices
during a Level 2, and also to comply with the following
additional conservation measures:
1. Limit residential and commercial landscape
irrigation to no more than three (3) days per week.
This section shall not apply to homeowner’s vegetable
gardens, fruit trees, commercial growers, or
nurseries.
2. Limit lawn watering and landscape irrigation
using sprinklers to no more than fifteen (15) minutes
per watering station per day. During the months of
November through April, landscape irrigation shall not
exceed seven (7) minutes per water watering station
per assigned day. Watering times may need to be
shortened to avoid run-off. This provision does not
apply to landscape irrigation systems using water
efficient devices, including but not limited to:
weather based controllers, drip/micro-irrigation
systems, rotating sprinkler nozzles and stream rotor
sprinklers.
3. Water landscaped areas, including trees and
shrubs located on residential and commercial
properties, and not irrigated by a landscape
irrigation system on the same schedule set forth above
39-7
by using a bucket, hand-held hose with positive shut-
off nozzle, or low-volume non-spray irrigation.
39.06 WATER SHORTAGE RESPONSE LEVEL 3 – SUPPLY CRITICAL
CONDITION
(a) A Water Shortage Response Level 3 condition is
also referred to as a “Supply Critical” condition. A Level
3 condition applies when the Water Authority notifies its
member agencies that due to increasing cutbacks caused by
water shortage or other reduction of supplies, a consumer
demand reduction of between 21 and 40 percent is required
in order to have sufficient supplies available to meet
anticipated demands. The District Board of Directors may
declare the existence of a Level 3 condition and implement
the Level 3 conservation practices identified in this
Section.
(b) All persons using District water shall comply
with Level 1 and Level 2 water conservation practices
during a Level 3 condition and shall also comply with the
following additional mandatory conservation measures:
1. Limit residential and commercial landscape
irrigation to no more than two (2) assigned days per
week on a schedule established by the General Manager
or designee and posted by the District. During the
months of November through April, landscape irrigation
is limited to no more than once per week on a schedule
established by the General Manager or designee and
posted by the District. This section shall not apply
to commercial growers or nurseries.
2. Water landscaped areas, including trees and
shrubs located on residential and commercial
properties, and not irrigated by a landscape
irrigation system on the same schedule set forth above
by using a bucket, hand-held hose with a positive
shut-off nozzle, or low-volume non-spray irrigation.
3. Stop filling or re-filling ornamental lakes
or ponds, except to the extent needed to sustain
aquatic life, provided that such animals are of
significant value and have been actively managed
within the water feature prior to declaration of a
water shortage response level under this Section.
39-8
4. Stop operating non-residential ornamental
fountains or similar decorative water features unless
recycled water is used.
5. Stop washing vehicles except at commercial
carwashes that re-circulate water, or by high
pressure/low volume wash systems. If a commercial car
wash cannot accommodate the vehicle because of the
vehicle size or type, such as RVs, horse trailers,
boats and commercial vehicles, customers will be
allowed to wash vehicles using a bucket and a hand-
held hose with positive shut-off nozzle, mobile high
pressure/low volume wash system.
(c) Upon the declaration of a Level 3 condition, the
District may suspend new potable water service and
statements of immediate ability to serve or provide potable
water service (such as, will serve letters, certificates,
or letters of availability) except under the following
circumstances:
1. A valid, unexpired building permit has been
issued for the project; or
2. The project is necessary to protect the
public’s health, safety, and welfare; or
3. The applicant provides substantial evidence
of an enforceable commitment that water demands for
the project will be offset prior to the provision of a
new water meter(s) to the satisfaction of the
District.
This provision shall not be construed to preclude the
resetting or turn-on of meters to provide continuation of
water service or to restore service that has been
interrupted.
(d) Upon the declaration of a Level 3 condition, the
District will suspend consideration of annexations to its
service area.
(e) The District may establish a water allocation for
property served by the District using a method that takes
into consideration the implementation of conservation
methods or the installation of water saving devices. If
the District establishes a water allocation, it shall
39-9
provide notice of the allocation by including it in the
regular billing statement for the fee or charge or by any
other mailing to the address to which the District
customarily mails the billing statement for fees or charges
for on-going water service. Following the effective date
of the water allocation as established by the District, any
person that uses water in excess of the allocation shall be
subject to a penalty for each billing unit of water in
excess of the allocation. The penalty for excess water
usage shall be cumulative to any other remedy or penalty
that may be imposed for violation of this Section.
39.07 WATER SHORTAGE RESPONSE LEVEL 4 – SUPPLY
EMERGENCY CONDITION
(a) A Water Shortage Response Level 4 condition is
also referred to as a “Supply Emergency” condition. A
Level 4 condition applies when the Water Authority Board of
Directors declares a water shortage emergency pursuant to
California Water Code section 350 and notifies its member
agencies that Level 4 requires a demand reduction of more
than 40 percent in order for the District to have maximum
supplies available to meet anticipated demands. The
District shall declare a Level 4 in the manner and on the
grounds provided in California Water Code section 350.
(b) All persons using District water shall comply
with conservation measures required during Level 1, Level
2, and Level 3 conditions and shall also comply with the
following additional mandatory conservation measures:
1. Stop all landscape irrigation, except crops
and landscape products of commercial growers and
nurseries. This restriction shall not apply to the
following categories of use unless the District has
determined that recycled water is available and may be
lawfully applied to the use.
A. Maintenance of trees and shrubs that
are watered on the same schedule as noted in the
Level 3 Condition, by using a bucket, hand-held
hose with a positive shut-off nozzle, or low-
volume non-spray irrigation;
B. Maintenance of existing landscaping
necessary for fire protection as specified by the
Fire Marshal of the local fire protection agency
39-10
having jurisdiction over the property to be
irrigated;
C. Maintenance of existing landscaping for
erosion control;
D. Maintenance of plant materials
identified to be rare or essential to the well
being of rare animals;
E. Maintenance of landscaping within
active public parks and playing fields, day care
centers, school grounds, cemeteries, and golf
course greens, provided that such irrigation does
not exceed two (2) days per week according to the
schedule established under the District’s Level 3
Condition;
F. Watering of livestock; and
G. Public works projects and actively
irrigated environmental mitigation projects.
2. Repair all water leaks within twenty-four
(24) hours of notification by the District unless
other arrangements are made with the District.
(c) The District may establish a water allocation for
property served by the District. If the District
establishes water allocation it shall provide notice of the
allocation by including it in the regular billing statement
for the fee or charge or by any other mailing to the
address to which the District customarily mails the billing
statement for fees or charges for on-going water service.
Following the effective date of the water allocation as
established by the District, any person that uses water in
excess of the allocation shall be subject to a penalty for
each billing unit of water in excess of the allocation.
The penalty for excess water usage shall be cumulative to
any other remedy or penalty that may be imposed for
violation of any provision of this Section.
39-11
39.08 CORRELATION BETWEEN DROUGHT MANAGEMENT PLAN (DMP)
AND WATER SHORTAGE RESPONSE LEVELS
(a) The correlation between the Water Authority’s DMP
stages and the District’s water shortage response levels
identified in this Section of the Code of Ordinance is
described herein. Under DMP Stage 1, the District would
implement Water Shortage Response Level 1 actions. Under
DMP Stage 2, the District would implement Water Shortage
Response Level 1 or Level 2 actions. Under DMP Stage 3,
the District would implement Water Shortage Response Level
2, Level 3, or Level 4 actions.
(b) The water shortage response levels identified in
this Section correspond with the Water Authority DMP as
identified in the following table:
Water Shortage
Response Levels
Use
Restrictions
Conservation
Target
DMP
Stage
1 - Supply Watch Voluntary Up to 10% Stage 1
or 2
2 - Supply Alert Mandatory 11 to 20% Stage 2
or 3
3 - Supply Critical Mandatory 21 to 40% Stage 3
4 - Supply
Emergency
Mandatory Above 40% Stage 3
39.09 PROCEDURES FOR DETERMINATION AND NOTIFICATION OF
WATER SHORTAGE RESPONSE LEVEL
(a) The existence of a Water Shortage Response Level
1 condition may be declared by the General Manager upon a
written determination of the existence of the facts and
circumstances supporting the determination. A copy of the
written determination shall be filed with the Clerk or
Secretary of the District and provided to the District
Board of Directors. The General Manager may publish a
notice of the determination of existence of Water Shortage
Response Level 1 condition in one or more newspapers,
including a newspaper of general circulation within the
District. The District will also post notice of the
condition on their website.
(b) The existence of Water Shortage Response Level 2
or Level 3 conditions may be declared by resolution of the
39-12
District Board of Directors adopted at a regular or special
public meeting held in accordance with State law. The
mandatory conservation measures applicable to Water
Shortage Response Level 2 or Level 3 conditions shall take
effect on the tenth (10) day after the date the response
level is declared. Within five (5) days following the
declaration of the response level, the District shall
publish a copy of the resolution in a newspaper used for
publication of official notices.
(c) The existence of a Water Shortage Response Level
4 condition may be declared in accordance with the
procedures specified in California Water Code sections 350
to 352 as note below:
350. The governing body of a distributor of a public water
supply, whether publicly or privately owned and including a
mutual water company, may declare a water shortage emergency
condition to prevail within the area served by such distributor
whenever it finds and determines that the ordinary demands and
requirements of water consumers cannot be satisfied without
depleting the water supply of the distributor to the extent that
there would be insufficient water for human consumption,
sanitation, and fire protection.
351. Except in event of a breakage or failure of a dam, pump,
Pipe line or conduit causing an immediate emergency, the
declaration shall be made only after a public hearing at which
consumers of such water supply shall have an opportunity to be
heard to protest against the declaration and to present their
respective needs to said governing board.
352. Notice of the time and place of hearing shall be published
pursuant to Section 6061 of the Government Code at least seven
days prior to the date of hearing in a newspaper printed,
published, and circulated within the area in which the water
supply is distributed, or if there is no such newspaper, in any
newspaper printed, published, and circulated in the county in
which the area is located.
The mandatory conservation measures applicable to Water
Shortage Response Level 4 conditions shall take effect on
the tenth (10) day after the date the response level is
declared. Within five (5) days following the declaration
of the response level, the District shall publish a copy of
the resolution in a newspaper used for publication of
official notices. If the District establishes a water
allocation, it shall provide notice of the allocation by
including it in the regular billing statement for the fee
or charge or by any other mailing to the address to which
the District customarily mails the billing statement for
39-13
fees or charges for on-going water service. Water
allocation shall be effective on the fifth (5) day
following the date of mailing or at such later date as
specified in the notice.
(d) The District Board of Directors may declare an
end to a Water Shortage Response Level by the adoption of a
resolution at any regular or special meeting held in
accordance with State law.
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: July 6, 2016
SUBMITTED BY:
Dan Martin
Engineering Manager
PROJECT: R2087-
001101
DIV. NO. 2
APPROVED BY:
Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Permanent Moratorium on the Installation of New Recycled Water
Facilities on Otay Mesa
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board of Directors (Board)
place a permanent moratorium on the installation of new recycled
water facilities on Otay Mesa (See Exhibit A for Project location).
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To place a permanent moratorium on the installation of new recycled
water facilities on Otay Mesa.
ANALYSIS:
Currently, recycled water is not available on Otay Mesa. The
existing recycled water infrastructure on Otay Mesa is being
supplied with potable water. As the District has pursued expansion
of the District’s recycled water supply system to the Otay Mesa
area, the District has encountered a number of issues and risks,
when considered in total, challenge both the technical and financial
feasibility of delivering recycled water to Otay Mesa. On July 2,
2014, staff presented information to the Board on the uncertainty of
2
recycled water availability for Otay Mesa, the financial feasibility
considerations associated with anticipated recycled water rates from
the City of San Diego (City), the uncertainty of securing easements
to support the Otay Mesa Recycled Water Supply Link Project, and the
delivery horizon of Indirect Potable Reuse (IPR) and/or Direct
Potable Reuse (DPR). As a result of the information presented to
the Board, the Board voted to place a temporary moratorium on the
installation of new recycled water facilities on Otay Mesa (see
Exhibit A for Project location).
Staff has focused on a number of efforts related to the temporary
moratorium on the installation of new recycled water facilities on
Otay Mesa since the last update was provided to the Board on
November 5, 2014. These efforts include the following:
Continued efforts with the City to discuss issues and
amendments to the agreements between the District and the City.
Meeting with representatives of the East Otay Mesa Property
Owners Association and the Otay Mesa Property Owners
Association.
Close out of Developer recycled water projects in the planning,
design, and construction phases on Otay Mesa.
Continued Efforts with the City of San Diego to Discuss Issues and
Amendments to the Agreements between the District and the City
Since the date the Temporary Moratorium was put in place by the
District in July of 2014, District staff has sent correspondence and
held meetings with the City staff regarding issues related to the
October 23, 2003 Agreement Between the Otay Water District and the
City of San Diego for Purchase of Reclaimed Water from the South Bay
Water Reclamation Plant ("Agreement"). District staff has presented
proposals regarding: the City’s recycled water rates, the “Take-Or-
Pay” requirement included in the recycled water Agreement, and
miscellaneous terms missing from the recycled water Agreement.
Although District staff has met with City staff to discuss the
issues and how they impact the delivery of recycled water to Otay
Mesa, these items remain unresolved. On November 17, 2015, the City
voted to raise the rate for recycled water from the then current
rate of $0.80/HCF ($348/AF) to a new Unitary Rate of $1.73/HCF
($753/AF). This new Unitary Rate was effective on January 1, 2016.
District staff has met with the City as recently as June 6, 2016 to
discuss the District’s proposals outlined above. In that meeting,
the City expressed no interest in revising the existing Agreement.
3
Meeting with Representatives of the East Otay Mesa Property Owners
Association and the Otay Mesa Property Owners Association
Staff met with representatives from the East Otay Mesa Property
Owners Association and the Otay Mesa Property Owners Association
(EOMPOA/OMPOA) back in December 2014 and provided an in-depth review
of the District’s financial analysis that supported the placement of
a temporary moratorium on the installation of new recycled water
facilities on Otay Mesa. Upon completion of the review, the
representatives from the EOMPOA/OMPOA thanked staff for the overview
and agreed with the financial analysis conclusions. As part of the
discussion, the EOMPOA/OMPOA representatives requested that the
District consider a one (1) year extension to the temporary
moratorium on the installation of new recycled water facilities on
Otay Mesa. It was explained that during the one (1) year extension,
the EOMPOA/OMPOA could focus on attracting businesses to Otay Mesa
that have a high demand for recycled water use. Additionally, the
EOMPOA/OMPOA representatives explained that the District could use
this time to seek funding opportunities that could offset the
capital costs of implementing recycled water infrastructure on Otay
Mesa.
During the Temporary Moratorium, the EOMPOA/OMPOA has been
supportive in lobbying for an equitable cost of supply for recycled
water from the City. The EOMPOA/OMPOA has also been actively
working to attract businesses to Otay Mesa. At this point, the
temporary moratorium has been in place for two (2) years, and to
date, staff is not aware of any additional businesses beyond those
included in the current planning efforts that would require heavy
use of recycled water. Additionally, staff has not identified
significant funding opportunities at the Federal, State, or Local
levels that could substantially offset the capital costs of
implementing recycled water infrastructure on Otay Mesa.
Staff has examined the potential of attracting businesses to Otay
Mesa that have a high demand for recycled water use in water
intensive manufacturing processes. It has been noted that the
disposal of the residual waste water generated by the manufacturing
processes may be a factor that limits opportunities for these types
of businesses on Otay Mesa.
Close-out of Developer Recycled Water Projects in the Planning,
Design, and Construction Phases on Otay Mesa
As noted in the November 5, 2014 update to the Board, District staff
completed a review of the Developer projects on Otay Mesa that are
affected by the temporary moratorium. In total, thirty (30)
projects were identified. These projects, which include both
4
private recycled water systems and public recycled water mains, were
found to be in various stages of project development ranging from
planning to construction. Since the last update to the Board, staff
has completed the close out of all Developer recycled water projects
that were in the planning and design phases on Otay Mesa. The
associated recycled water project Developer accounts have also been
closed out.
Staff has also worked cooperatively with Developers on active
recycled water projects that were in construction on Otay Mesa when
the temporary moratorium was put into place in July 2014. On those
active projects that were nearing completion, staff worked with the
Developers to allow the project to move forward to completion with
the knowledge that potable meters will be set on the newly
constructed infrastructure to serve the project locations. On
projects that were in the early stages of construction when the
temporary moratorium was placed, staff worked with the Developers to
implement changes on the project that would delete the recycled
water infrastructure and mitigate project impacts. At this time,
all recycled water construction projects have been closed out. As
of July 2014, only potable water meters have been purchased and set
on Otay Mesa for permanent service.
Otay Mesa Recycled Water Planning
As part of this update, in response to a previous Board inquiry,
this report provides a historical summary of the development and
planning efforts with respect to the District’s reclaimed water
system. This summary is included as Exhibit B to this report. The
summary includes a discussion of the foundational planning documents
that developed recycled water use projections for Otay Mesa.
As noted in Exhibit B, the District’s highest projection for
recycled water use on Otay Mesa was included in the 2002 Water
Resources Master Plan (WRMP) with an estimated use of 2,112 AF/Year.
In 2008, the WRMP was updated to lower projected use to 1,715
AF/Year. Since 2008, the District has reviewed a number of factors
that suggest a decline in the projected use of recycled water on
Otay Mesa. Projections for ultimate recycled water use on Otay Mesa
are estimated to be approximately 1,200 AF/Year and remain unchanged
from the last projection presented in July 2014. The District is
currently working on the development of an updated Water Facility
Master Plan (WFMP).
5
Summary Update of Factors Included in the Otay Mesa Recycled Water
Financial Analysis
In July 2014, when the Board approved the Temporary Moratorium on
the installation of new recycled water facilities on Otay Mesa, the
associated financial analysis considered factors including: the
estimated cost of supply from the City; the cost of recycled water
transmission main infrastructure; the estimated future demand of
recycled water on Otay Mesa; and the availability/expiration of
recycled water incentives to fund the infrastructure. The following
summarizes the current status of these factors:
Cost of Supply - In July of 2014, when the Board placed the
Temporary Moratorium on Otay Mesa, staff used a recycled water cost
of supply valued at $1.30/HCF ($566/AF) based on a 2013 proposed
zone rate for the South Bay. Using this cost of supply, it was
determined through the financial analysis that the payback period
for infrastructure was more than 70 years which is beyond the useful
life of the recycled water infrastructure. This rate was not
implemented by the City. The approved City’s rate of $1.73/HCF
($753/AF) is thirty-three percent greater than the assumed rate
included in the July 2014 analysis. Under this approved rate, the
payback period has been confirmed at a level that is more than 70
years which is beyond the useful life of the recycled water
infrastructure.
Infrastructure Cost – In July of 2014, the estimated cost for the
recycled water transmission main was $23.5 million. From February
2014 to February 2016, the “Engineering News Record Los Angeles
Construction Cost Index” has increased by 3.8 percent, indicating a
potential increase in the Otay Mesa recycled water transmission main
construction costs to $24.4 million. This potential cost increase
will also contribute to a longer payback period.
Recycled Water Demand – The projected Year 2035 demand for recycled
water on Otay Mesa remains unchanged at 1,200 Acre-Feet per year
since July 2014. Since this demand has not increased, the increased
cost of supply and cost of infrastructure would be distributed
across the same number of projected users.
Expiration of Recycled Water Incentives – Metropolitan Water
District (MWD) recycled water incentives are set to expire in 2025.
San Diego County Water Authority (SDCWA) recycled water incentives
are set to expire in 2026. No additional incentives have been
identified.
During the two (2) years of the Temporary Moratorium, greater
certainty has been realized with respect to the factors included as
6
part of the Otay Mesa Recycled Water Financial Analysis. The
current status of factors that contribute to the financial analysis
results in less feasibility and supports the staff recommendation to
place a permanent moratorium on the installation of new recycled
water facilities on Otay Mesa.
Net Present Value Loss
The District’s Finance staff prepared a recycled water financial
feasibility analysis for Otay Mesa based on anticipated costs of
water from the City’s South Bay Water Reclamation Plant (SBWRP).
This analysis supports the conclusion regarding the unfeasibility of
expanding recycled water on Otay Mesa without a reliable and cost
effective water supply. The recycled water supply Agreement with
the City of San Diego expires at the end of 2026 and the District’s
expansion project would begin delivering recycled water to Otay Mesa
in 2020. With only six years remaining on the Agreement from the
time recycled water is able to be delivered to Otay Mesa, staff is
concerned about further expansion of the District’s recycled water
supply system to Otay Mesa given the uncertainty of the supply. In
addition to the City’s recycled water supply and pricing issues,
there are risks, that when combined, currently render this a costly
source of water. These risks include: the projected volume
associated with the level of CIP expenditures; potable versus
recycled water costs; ongoing incremental recycled operating costs;
and the expiration of Metropolitan Water District of Southern
California (MWD) and San Diego County Water Authority (SDCWA)
credits in 2025 and 2026, respectively. Staff anticipates that
while the volume of water being delivered to Otay Mesa will level
off at approximately 1,200 AF/year, the ongoing incremental costs
associated with maintaining the recycled system will continue to
increase.
The table below, prepared by staff, summarizes the 70-year net
present value (NPV) financial analysis. Following the table is a
discussion regarding the assumptions contained in the analysis. In
total, staff estimates the expansion of recycled water to Otay Mesa
will result in a NPV loss, using a 3.29% discount factor, of $14.7
million over the next 70 years. The discount factor used was based
on the 30-year average Consumer Price Index for San Diego.
7
Year
Water
Cost
Benefit
CWA/MWD
Credit
Benefit
Take or
Pay
Benefit
Water
Revenues
Operating
Expense
CIP/Debt
Funding
Interest
Income
Net
Present
Value Loss
Total $35.3 $2.5 $1.5 ($15.1)($13.7)($15.9)($9.3)($14.7)
Otay Water District
Net Present Value of Otay Mesa Recycled Expansion
(in millions)
Water Volumes
The analysis estimates the Otay Mesa recycled expansion will
deliver 672 acre-feet of recycled water beginning in 2020 and
grow to a total demand of approximately 1,200 acre-feet per
year by 2035.
Water Cost Benefit
The water cost benefit of $35.3 million is the savings
generated through the purchase of lower cost recycled water
versus higher cost potable water. The amounts are based on the
FY 2017 budgeted amounts and the Fiscal Year 2017 six-year rate
model. The financial analysis reflects the City’s unitary
recycled rate of $753/AF, which was effective on January 1,
2016.
MWD/CWA Credit Benefit
The MWD/CWA credit benefit of $2.5 million represents credits
the District receives based on the volume of recycled water
sold on Otay Mesa. Currently, the District receives a combined
$385/AF credit from SDCWA and MWD for recycled water sales to
assist in the recovery of investments in the recycled system.
The District would receive an incremental increase of $2.5
million in credits due to the additional demand on Otay Mesa.
However, these credits will expire in 2025 and 2026, and their
continuation beyond that period is uncertain.
Take-or-Pay Benefit
The take-or-pay benefit of $1.5 million represents the
reduction in the take-or-pay penalty paid to the City due to
the additional recycled demand on Otay Mesa. The District is
8
currently unable to meet the recycled water contractual volume
with the City and as a result, pays for water it does not use.
In addition, the City has been unwilling to renegotiate the
current contractual volumes. Therefore, a benefit related to
the additional recycled water demand generated by expanding
recycled water on Otay Mesa has been included in the analysis.
Water Revenue Impact
The water revenue impact of ($15.1) million represents a
reduction in future revenues due to the sale of lower priced
recycled water versus higher priced potable water. The
District’s recycled water rates are 15% lower than potable
water rates; therefore, at similar volumes the sale of recycled
water generates 15% less revenues than potable water. If the
District were to move forward with expanding recycled water on
Otay Mesa, the District’s revenues over the 70-year period
would be negatively impacted by this amount.
Operating Expenses
There are an estimated ($13.7) million of incremental operating
expenses over the 70-year period related to the ongoing costs
of maintaining the recycled infrastructure on Otay Mesa. In
addition, there are incremental costs associated with cross-
connection testing and on-going inspections. The ongoing costs
of maintaining the recycled water infrastructure is based on an
average cost of maintenance of $0.37 per foot of pipeline for
an estimated 64.3 miles of pipeline on Otay Mesa. The net
present value of the maintenance costs total $8.1 million.
Cross-connection inspections occur annually and testing occurs
once every four (4) years. The average annual cost for
inspections and testing is $750 per meter. Staff has estimated
there would be 115 recycled meters on Otay Mesa resulting in a
total NPV inspection cost of $5.6 million.
CIP/Debt Funding (Net of Grants)
The total estimated NPV cost of the project including grant
funding and debt service costs is ($15.9) million. The
estimated CIP expenditure for the expansion of the recycled
water system to the Otay Mesa is approximately $23.5 million
through 2025. The District anticipates it could potentially
fund the project with a state revolving fund loan and recoup up
to 25% of the recycled water project expenditures. Staff
completed the analysis assuming both the state revolving fund
loan and grants were obtained. However, there is some risk
9
since grant reimbursements are not guaranteed. Failure to
obtain grant funding would further degrade the financial
feasibility of recycled water on Otay Mesa.
If the District is able to fund 25% of the CIP through grants,
the CIP cost per annual acre-feet of supply would be $14,414.
This is 69% higher than the cost of obtaining recycled water
from the City. The District has invested approximately $25.6
million, net of grants, to obtain the current 3,000 acre-feet
per year from the City’s South Bay Water Reclamation Plant
(SBWRP). The District estimates the investment in the
connection to the SBWRP will be recouped by 2026. This
recoupment is mainly due to the CWA/MWD credits and the City’s
recycled water rate of $348/AF from 2006 to 2015. The benefit
these two (2) items would have provided to the expansion of
recycled water on Otay Mesa is reduced, due to the expired
credits from the CWA/MWD and the City’s increased recycled
water rate of $753/AF.
Interest Income
The negative interest income of $9.3 million represents the
lost interest earnings over the 70-year period as a result of
the overall negative cash flow associated with the expansion of
recycled water on Otay Mesa moving forward. On a stand-alone
basis, there is not enough of an operational financial benefit
to service the associated debt, which results in a negative
cash flow. Staff is assuming an initial interest income rate
of 0.79% in 2016 and has gradually increased the rate to
approximately 3.98% by 2030, which is the average interest
earnings rate for the District over the last 23 years.
Sensitivity Analysis
To determine the sensitivity of the financial analysis, staff
evaluated the financial feasibility under multiple pricing and
demand scenarios. Staff evaluated the financial feasibility of
recycled water on Otay Mesa, based on the current City’s unitary
rate of $753/AF and a zone rate of $510/AF. As part of each
analysis, staff determined the level of demand that would be
required for the expansion of the recycled system on Otay Mesa to be
financially feasible. To be financially feasible under unitary
pricing, the ultimate demand on Otay Mesa would need to be at least
3,200 acre-feet per year by 2035. To be financially feasible under
zone rate pricing, the ultimate demand would need to be at least
1,900 acre-feet per year by 2035. Based on a projected annual
10
demand of 1,200 acre-feet, expansion of recycled water on Otay Mesa
would not be financially feasible.
Avoided San Diego County Water Authority (SDCWA) Capacity Fees on
Recycled Meters
The District has not collected SDCWA capacity fees on meters set and
designated as future recycled water meters in anticipation that
recycled water would be available on Otay Mesa. The value of the
avoided SDCWA fees, based on an analysis of SDCWA capacity and
treatment fees that would have been due at the time of meter
purchase, totals $1,340,684.00.
Review and assessment of existing District maintained recycled water
facilities on Otay Mesa
Additional review of the existing recycled water infrastructure on
Otay Mesa has confirmed that the recycled water mains have been
tested to potable standards. The District maintains interconnection
facilities which includes backflow prevention devices at twenty-four
locations on Otay Mesa. These devices connect the recycled water
mains to the existing potable mains and were put into place in order
to provide a water supply. The District maintained backflow
prevention devices were scheduled to be removed once recycled water
was made available on Otay Mesa.
As indicated in the November 5, 2014 Board report which provided an
update on the Temporary Moratorium of new recycled water facilities
on Otay Mesa, a significant majority of the recycled water
infrastructure on Otay Mesa has been placed into service and is
currently serving water to active recycled water meters. In total,
less than 1.4 percent of the 16.4 miles of recycled water mains are
not charged with water. Should a permanent moratorium on the
installation of new recycled water facilities be placed on Otay
Mesa, the existing recycled water infrastructure can remain
functioning as it does today providing water to the District’s
customers until an evaluation of alternative use is completed and a
strategy is implemented. That evaluation will focus on a
reassignment of facilities to convert the “recycled” infrastructure
to “potable” infrastructure. That infrastructure could provide
redundancy to enhance reliability on Otay Mesa.
Next Steps
Next steps pending Board approval of a permanent moratorium on the
installation of new recycled water facilities on Otay Mesa include
the following:
11
Discussions will be initiated with SDCWA regarding applicable
capacity fees associated with changing meter designations from
recycled water to potable water meters.
The approved Fiscal Year 2017 budget includes a Capital
Improvement Program project (R2123) to evaluate alternative
uses for the recycled waterlines installed on Otay Mesa. Work
on this project in FY 2017 will consist of hydraulic modeling
to access the potential for alternative use.
Update the District’s Water Facility Master Plan (WFMP) to
reflect a Permanent Moratorium on the installation of new
recycled water facilities on Otay Mesa.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
Overall, it has been determined that the financial benefits of a
permanent moratorium outweigh the identified financial costs. There
are financial costs associated with a permanent moratorium. Those
costs include potential reimbursement of $950,000 in grant funds
that were received from the United States Bureau of Reclamation
(USBR) and SDCWA capacity fees.
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To provide
high value water and wastewater services to the customers of the
Otay Water District in a professional, effective, and efficient
manner” and the District’s Vision, “A District that is innovative in
providing water services at affordable rates, with a reputation for
outstanding customer service.”
LEGAL IMPACT:
None.
DM/RP:
P:\WORKING\CIP R2087\Staff Reports\BD 07-06-16\BD 07-06-16 Staff Report Otay Mesa Recycled Water
Permanent Moratorium.docx
Attachments: Attachment A – Committee Action
Exhibit A – Project Location Map
Exhibit B – Otay Mesa Recycled Water Planning
ATTACHMENT A
SUBJECT/PROJECT:
R2087-001101
Permanent Moratorium on the Installation of New Recycled
Water Facilities on Otay Mesa
COMMITTEE ACTION:
Finance, Admin, and Communications Committee (Committee) reviewed this
item at a meeting held on June 22, 2016. The Committee supported
Staff’s recommendation.
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.
EXHIBIT B
OTAY MESA RECYCLED WATER PLANNING
July 6, 2016
This report summarizes efforts by the Otay Water District with respect to recycled water
use projections for Otay Mesa. The District’s involvement with recycled (reclaimed)
water dates back to as early as 1963 when the Board initiated a policy of advanced
planning for water and sewer facilities within the District. A staff report submitted to the
Board of Directors on October 19, 1994 contains a summary of the history of sewer and
the development of the District’s reclaimed water system from the 1960’s through 1994.
This staff report is attached as Attachment 1 to this report.
Since 1994, the District has completed a number of planning documents to guide the
development of water infrastructure. They are outlined as follows:
Otay Water District Water Resources Master Plan (WRMP) - dated April 1995
In April of 1995, Montgomery Watson developed the “Otay Water District Water
Resources Master Plan.” This document included an update to the reclaimed water
distribution plan developed in 1991 and refined assumptions and analysis made to
reflect policy and land use changes. The specific tasks included in the April 1995
WRMP included determining water demand for the Central and Otay Mesa areas using
the established market assessments, but adjusting the acreage of usage or unit
demand where appropriate. Chapter 11 of the April 1995 WRMP included a table
(Table 11-4 shown below) that provided “Projected Reclaimed Water Demands for Otay
Mesa.” The demand shown in the Table 11-4 represents projected ultimate demand
using planning criteria.
2
The anticipated land use for Otay Mesa included industrial areas, commercial areas,
and projected use at the R.J. Donovan State Prison and East Mesa Detention Facility,
as noted in Table 11-4 of the 1995 WRMP. It was anticipated that recycled water would
be used for landscaping needs for these land uses. In total, the projected demand for
Otay Mesa in the April 1995 WRMP was 999,263 gallons per day (1,119 AF/Year).
Report for Utilization of Recycled Water Irrigation for Single and Multiple Family
Residential Developments – dated April 1997
In April of 1997, Daniel Boyle Engineering, Inc. developed a report for “Utilization of
Recycled Water Irrigation for Single and Multiple Family Residential Developments for
the Otay Water District.” The purpose of the report was to update the projected
recycled water demands included in the District’s WRMP to incorporate additional uses
including single family residential landscaping and toilet and urinal flushing at the R.J.
Donovan State Prison and East Mesa Detention Facility. Section 2 of the April 1997
report included Table 2.3, “Projected Annual Demands” for the Otay Mesa System, as
shown below.
3
In total, the projected demands for Otay Mesa in the April 1997 report for “Utilization of
Recycled Water Irrigation for Single and Multiple Family Residential Developments” was
1,230,000 gallons per day (1,377 AF/Year).
4
Otay Water District Water Resources Master Plan (WRMP) - dated August 2002
In August of 2002, District staff developed the “2002 Otay Water District Water
Resources Master Plan.” This document updated the reclaimed water distribution plan
included in the “1995 Otay Water District Water Resources Master Plan” developed by
Montgomery Watson. In the 2002 WRMP, the projected demand for recycled water on
Otay Mesa was updated to include the use of recycled water for State Route 125, State
Route 905, the Future State Route 11 Border Crossing, and a future power plant.
Table 11-5, Summary of Projected Recycled Water Annual Average Day Demands,
included projected ultimate demand for recycled water on Otay Mesa which totaled
1,886,130 gallons per day (2,112 AF/Year). A breakdown of the demand by land use
included in the 2002 WRMP is shown in the table below:
5
Otay Water District Water Resources Master Plan (WRMP) - dated August 2008
In October 2008, PBS&J developed the “2008 Otay Water District Water Resources
Master Plan.” This document updated the projected use of recycled water that was
included in the 2002 WRMP. Ultimate projected recycled water demands in Otay Mesa
were generated using projects with a Sub Area Master Plan (SAMP), recycled water
meters currently charged with potable water, and general future land use categories.
Future land uses were based on the existing Otay Mesa Community Plan and the East
Otay Mesa Specific Plan. The typical land use types identified consisted of parks,
commercial and industrial development, freeways, street and highway corridor
landscapes, multi-family residential development, public and community purpose
facilities. The projected recycled water demand for Otay Mesa is summarized in Table
5-3 from the 2008 WRMP, as shown below.
The 2008 WRMP lowered the projected use for recycled water for all land use types
including industrial, commercial, State Highway facilities, and the planned
correctional/detention facilities. In general, the updated projection for Otay Mesa was
lowered by approximately 19 percent from the 2002 WRMP projections to 1,531,763
gallons per day (1,715 AF/Year). It is noted that this report was developed 8 months
after the District began acquiring recycled water from the City of San Diego and
implementing use in the Central area of the District. Since that time, the District has
gained experience with a larger recycled water customer base and that experience has
been applied to forecast recycled water projections.
6
Events that have influenced Recycled Water Usage and Land Use Development
Since January of 2007, there have been events that have influenced the use of
recycled water in the District, including the following:
Nationwide Economic Recession - The recession which started in December of 2007
and peaked in June of 2009 impacted development in the District, including Otay Mesa.
The recession essentially brought development on Otay Mesa to a stop. Recessionary
use of recycled water also declined as individuals had less discretionary funds for items
like water for irrigation. The reduced use of recycled water mirrored reductions in
potable water use during this time. Recovery from the recession was only recently
achieved in the last few years.
Conservation – In recent years, agencies including the City of San Diego and the
County of San Diego have made revisions to allowable plant types used in
developments to encourage water conservation. Additionally, the conservation
message encouraged by all water agencies has influenced users of recycled water to
also use less water.
Changes to Landscape Usage – The WRMP updates performed in 2002 and 2008
anticipated Caltrans to be a long-term user of recycled water for landscaping
implemented as part of the new freeway construction at State Route 125, State Route
905, and the new Border Crossing. Caltrans’ current practice is to apply irrigation for a
limited period of years to establish planting for erosion control and then pull the meters
after a period of seven (7) years. As such, Caltrans can no longer be considered a
permanent user of recycled water for planning purposes.
Future Projections for Otay Mesa/Updated WRMP
The District’s highest projection for recycled water use on Otay Mesa was included in
the 2002 WRMP with an estimated use of 2,112 AF/Year. In 2008 the WRMP was
updated to lower projected use to 1,715 AF/Year. Since 2008, the District has reviewed
a number of factors that suggest a decline in the projected use of recycled water on
Otay Mesa, including conservation and Caltrans landscaping as noted above. Current
projections for ultimate recycled water use on Otay Mesa are estimated to be
approximately 1,200 AF/Year. The graph below shows the ultimate projections for
recycled water use on Otay Mesa included in the planning documents between 1995
and 2014. Projections for recycled water on Otay Mesa have remained unchanged
since 2014.
7
AGENfll ITEM
STAFF REPORT
TYPEMEETING Regular Board MEETINGDATE 10/19/94wASUBMITTED BY: Tim Stanton^^//£y— WONCVGFNO.
SUBJECT. History of Sewer - Reclaimed Water System
POHPOSE;
This is an informational report in response to your Board'srequest for a review of the history of the Ralph W. ChapmanWater Recyling Facility (RWCWRF) and the associated sewerand reclaimed water system.
BACKGROPKD
There have been several staff reports to the Board regardingthe rates charged for, and cost of producing, reclaimedwater. At the September 7, 1994 Board meeting, EastLakeCountry Club Vice President, Dave Kuhn requested that theBoard lower the rates for reclaimed water to 50% of thedomestic water rates. He felt that this would moreappropriately reflect the true cost of reclaimed water, bean incentive for more use by others, and reflect moreclosely what other agencies are charging.
Staff had evaluated the cost of reclaimed water and reportedto your Board that current rates are only now starting torecover the cost of constructing, operating and maintainingthe reclaimed system. As illustrated in Exhibit A, a breakeven analysis was created by Padre Dam for their reclaimedsystem and their break even occurs in the year 2000.
Regarding the reclaimed water rates charged by otheragencies, Exhibit B is a list of rates charged by otheragencies for reclaimed water. This list illustrates someare charging potable rates, but there is a wide variationfrom 47% to 100% of potable rates.
Your Board asked staff to study the matter further, startingwith a report on the history of the sewer and reclaimedsystem.
Staff proposes to meet your Board's request using thefollowing approach:
« Review history and present in a staff report to yourBoard.
• Retain an engineering consultant to prepare a revisedsewer and reclaimed system master plan to be complete by1/30/95.
• Retain a rates consultant to develop rates from themaster plan, work to be completed in parallel with MasterPlan.
• Present a staff report to your Board on the results ofthe Master Plan and rates study in February 1995.
This report presents the history of the sewer and reclaimedsystem as available in existing documents, staff reports toyour Board, letters and memos in file and a bond prospectus.
The history of Otay Water District's involvement in sewerand reclaimed water dates back to 1963 when your Boardinitiated a policy of advanced planning for water and sewerfacilities within the District. Exhibit C is a detailedsummary of events following that decision. The followingare a few of the major highlights.
1965 Failed septic tanks that could drain to SweetwaterLake led to a County study that concluded in-basin wastewater treatment was the most practicaland economical solution.
1968 70,000 gpd Hillsdale Treatment Plant constructed,secondary reclaimed water used at Valhalla HighSchool for irrigation, and on a local tree farm.
1971 Regional Water Quality Control Board (RWQCB)required reclaimed water not be used in theJamacha Basin, as it might degrade basin waterquality. Solution was to pump 750 feet over aridge to the Use Area, then use to irrigate farmsimmediately downstream of site. Consideration wasalso given to a plant below Sweetwater Lake anduse of reclaimed water in the regional park.
1972 Phase I of in-basin reclamation projectconstructed consisting of Calavo and Hillsdaleoutfall sewers and Steele Canyon Pump Station.Interim connection to Metro was provided throughSpring Valley Sanitation District (SVSD).
1978 General Obligation Bonds issued in ID 18 for$7,300,000 to fund RWCWRF. Projected sewer flowsof 1.3 mgd by 1984, current level was 300,000 gpd.Potential revenue from reclaimed water projectedto be $130,000 per year.
1980 Construction began on the RWCWRF and completed inlate 1980, capacity 1.3 mgd. Purchased 524 acresin the Use Area and built ponds for $1.7 millionto use reclaimed water.
1989 Study determines plant can only produce 0.58 mgdof Title 22 water.
1989 Upgrade of plant to 1.3 mgd of Title 22 reclaimedwater estimated to cost $5.76 million. Plantcould be increased to 4.5 mgd in future. Thepotential market for reclaimed water is 6.5 mgd,2.0 mgd to be the combined use by Olympic TrainingCenter and EastLake.
1989 10/23/89 letter of intent from EastLake to takereclaimed water, Exhibit D. Their EIR alsoaddressed use of reclaimed water.
1990 Board approved that reclaimed water capacity feesand approved monthly service charges for reclaimedwater should be the same as potable water.
1990 Board workshop on RWCWRF upgrade. Consultantrecommended upgrade plant to 1.3 mgd and retain1.2 mgd in Metro as the best economic decision.Board approved construction contract for upgrade,for $4,809,000.
1992 Modifications to RWCWRF completed.
The following table represents the approximate cost of allsewer and reclaimed water facilities built to date:
Collection systemUse Area & StorageOriginal plant (JBWRF)Upgrade plant (JBWRF)Use Area pond liningRancho San Diego P.S.Total
$13.2 M
$ 1.7 M
$ 6.6 M$ 7.5 M$ 1.8 MS 0.8 M
$30.8 M
Since 1965, seven studies were done to evaluate the mostcost effective solution to sewage management in the JamachaBasin, and all but one concluded that the RWCWRF was themost economical solution. Each study assumes there wouldultimately be some reuse of the reclaimed water resulting ina revenue stream. Studies were conducted by consultants in1966, 1969, 1973-(2), 1974, 1990 and 1994.
RECOMMENDATION
Staff recommends your Board accept this informational reporton the history of the sewer and reclaimed system, andapprove staff to:
• Retain an engineering consultant to prepare a revisedsewer and reclaimed system master plan to be complete by1/30/95 for an amount not to exceed $50,000.
• Retain a rates consultant to develop rates from themaster plan, work to be completed in parallel with masterplan for an amount not to exceed $25,000.
• Report back to your Board at the second meeting inFebruary, 1995.
TNS/mds
Attachments
Value Per Acre-Foot
mxiro
H
ro
CD
m<CD
ID
GO
GO
CD
A A L 1 - page 1
COMPARISON OF POTABLE AND RECLAIMED WATER RATES FOR SELECTED SOUTHERN CALIFORNIA WATER AGENCIES
Agency
Carlsbad Municipal Water District
City of Burbank
Central Basm Municipal Water District
Fallbrook Public Utility District
City of Glcndale
Irvine Ranch Water District
Las Virgenes Municipal Water District
City of Long Beach
Los Angeles Dept of Water and Po'*cr
City of Occansidc
Rale Class
Commerc lal In J u stnal
Commercial /Industrial
Wholesale
0-25 AF/month
25- 50 AF/month
50 - 100 AF/month
100* AF/month
Agricultural
Commercial/ Industrial
Landscape Irrigation
(% of base month use)
0 - 1005
101 - nor,
in - 120<-,
1215-
Commercial/Industrial
1 - 12HCF
13 - 24 HCF
25 - 100 HCF
100- HCF
Commercial 'Industrial
Commercial/Industrial
Commercial /Industrial
Trw'ed Walrr
Rate
$1 67/HCF
($727 AF)
$1 32.HCF
(557S/AF)
$42S/AF (2)
$!. 55/1.000 gal
(S505/AF)
5I.76/HCF
(S767/AF)
$0 61/HCF
(S266/AF)
$1 22'HCF
(S531/AF)
$244;HCF
(S1.063/AF)
J488/HCF
(S2.126/AF)
Zone 2 (4)
$1 10/HCF
(S479/AF)
S1.40/HCF
(5610/AF)
$1 94/HCF
(S845/AF)
J2.58/HCF
(S1.124/AF)
51.28 HCF
(S558/AF)
S1.74/HCF
(S758/AF)
I1.33/HCF
(J579/AF)
Reclaimed Water
Reclatmed Water Rate as % of
Rale Treated Water Rate
$1 67 HCF !OQT
($727. AF;.
JO 976 HCF 74<J
($425. AF)
$260; AF (2! 6 IT
$240/AF (2) 567,
$220/AF(2) Si''-
$200, AF (2i 47';
$1 24/1.000 fa! 80^,
(S404'AF)
$1.32HCF 75=;
(S575/AF)
$0 55/HCF (3) 90T,
($240/AF)
$1 10/HCF (3i 90<",
($479/AFj
S220/HCF(3i 90T,
(595S/AFJ
$4 40/HCF (3) 9055
(S1.917/AF)
Zone 2 (4)
$069/HCF 63s;
($30I/AFi
$0.95HCF 68 ft
($414'.\F)
$1 23 HCF 63"?
(S536/AF)
$1 70/HCF 665
(S741/AF)
J0.716/HCF 5f,<-< (5j
($312/'AF)
$0.91, HCF 52%
($396/AF)
$i 04/HCF 78S
($453.' AF)
EXHIBIT B
COMPARISON OF POTABLE AND RECLAIMED WATER RATES FOR SELECTED SOUTHERN CALIFORNIA WATER AGENCIES
Agency
Otay Water District
Rtmona Municipal Water District (6)
Sar.u Margarila Water District
South Coast County Water District
West Basin Municipal Water District
Vista Irrigation District
Rau: Class
Commercial/Industrial
Commercial/lnd u r rial
Agricultural (7)
Non-DomesUc Irrigation
1 - 33 HCF
34-70 HCF
71- HCF
flxci charge
Comnerc:al/Indur^:£l
Wholesale to WBMWD
Sen-ice Area
0-25 AF/month
25- 50 AF/monih
50-100 AF/oomh
100-200 AF/raor.th
200- AF/eonth
Agricultural
Treated Waler
Rat£
S1.67/HCF
(S727/AF)
'.i 599/HCF
(S697/AF)
S1.493/HCF
(S650/AF)
District 1 (S)
S1.45/HCF
(J632/AF)
5L81/HCF
(S788/AF)
$2.26/'HCF
(SS84/AF)
$3.17/raonth
S1.90/HCF
(SS:S/AF)
S434/AF (2)
J1.35/HCF
(S588/AF)
Reclaimed Water
Rale
S1.67/HCF
(S727/AF)
Jl. 599/HCF
(S697/AF)
S1.493/HCF
(S650/AF)
District 1 (8)
S1.45/HCF
(S632/AF)
J1.81/HCF
(S78S/AF)
J2.26/HCF
(S984/AF)
S3 1 7/month
JI.52/HCF
(S662/AF)
S280/AF (2)
S260/AF (2)
S240/AF (2)
S220/AF (2)
S200/AF (2)
S1.01/HCF(9)
(Si40/AF)
Reclamed Waicr
Rile u * of
Treated WUCT Rate
IOCS
1005
1005
1005
100*
IOCS
1005
SOS
655
60%
555
515
465
75%
(1) For non-city facilities only.
(2) Proposed FY 95 rates. Reclaimed water users in the CB/WBMWD service district also pay a fixed stand-by charge.
(3) Reclaimed water rates are for summer (May - November) usage only. Users pay i flat raie of SQ.55/HCF during the
winter (December - April).
(4) Rates for each lone vary depending on distance, ekviuon and pumping requirements.
(5) Rates set on a cost recovery basis.
(6) Agency also sells tertiary effluent from the San Vicer.te Plant to a single user for S20/AF. This rate was established pursuant to an
agreement under which the user funded certain related capital improvements.
(7) Untreated water rate.
(8) Rates for each improvement district vary depending an distance, elevation and pumping requirements.
(9) Agency distributes reclaimed water from the Shadowridge Plant for the Buena Sanitation District. Rates are established pursuant to a
long-term development agreement.
SUMMARY OF SEWER AND RECLAIMED WATER HISTORY
1963 Your Board initiated a policy of advanceplanning for water and sewer facilitieswithin the District.
1965 Failure of septic tanks which drained toSweetwater Lake led to study of alternativesto sewage treatment. County conducted a studythat concluded in-basin waste water treatmentwas the most practical and economicalsolution.
1966 OWD consultant reconfirmed county findings.
1968 70,000 gpd Hillsdale Treatment Plantconstructed, reclaimed water used at ValhallaHigh School for athletic field and to water"Future Farmers of America" evergreen trees.Discharge limited to 30,000 pd.
1969 A more in-depth study of in-basin treatmentvs use of Metro completed. Study concludedin-basin was most cost effective.
1970 Pre certification report submitted forJamacha Basin Waste water ReclamationFacility (JBWRF).
1971 Regional Water Quality Control Board (RWQCB)required reclaimed water should not be usedin the Jamacha basin, since it might degradebasin water quality. Solution was to pump 750feet over a ridge to the Use Area. Then useto irrigate farms immediately downstream ofsite. Consideration was given to a plantbelow Sweetwater Lake, but a sewer pipelinealong the lake was a concern due to potentialfailure during an earthquake.
1972 Phase I of in-basin reclamation projectconstructed. Calavo and Hillsdale outfallsewers and Steele Canyon Pump Station built.Interim connection to Metro through SVSD.Partial funding federal and state grants.
1973 Rancho San Diego project study concludesocean outface via Metro is preferredalternative.
EXHIBIT C
1973 Study by OWD economic consultant reaffirmsin-basin treatment is most economicalsolution.
1974 OWD consulting engineer revised preliminarydesign, and concludes in-basin solution ismost economical.
1977 Hirsch & Koptionak perform design.
1978 General Obligation Bonds issued in ID 18for $7,300,000. Projected sewer flows of 1.3agd by 1984, with current flows at 300,000gpd. Potential revenue from reclaimed waterprojected to be $130,000 per year.
1980 Purchased 525 acres in the Use Area
1980 Construction JBWRF, completed late1980. Capacity 1.3 mgd.
1982 Reverse osmosis and filtration units added tomeet Title 22.
1989 Study determines plant can only produce 0.58mgd of Title 22 water.
1989 Modified ground water quality objectivessouth of Use Area allows use ofundemineralized effluent. This eliminatesneed for RO system.
1989 Delivery of secondary effluent forconstruction water to EastLake.
1989 Study to upgrade plant to 1.3 mgd ofTitle 22 completed. Plant could be expandedto 2.6 mgd for an additional $5 million.Site will accommodate a 4.5 mgd plant.
1989 10/23/89 letter of intent from EastLake totake reclaimed water. Their EIR alsoaddressed use of reclaimed water.
1989 Consultant's study concludes:It is cost effective to expand plant.Modification cost estimated at $5,759,370,and ponds at $2,303,000.There is a potential market for 6.5 mgd ofreclaimed water, EastLake & OTC combineddemand is 2.0 mgd.
1990 Board approved reclaimed water capacity feesand monthly service charges that are to bethe sane as potable water rates.
1990 Workshop on JBWRF upgrade. Consultantpresents conclusion that upgrade plant to1.3 mgd and retaining 1.2 mgd in Metro is thebest economic decision.
1990 OWD Board approved construction contract forJBWRF upgrade, for $4,809,000.
1992 Modifications to JBWRF completed.
1994 Consultant study of JBWRF expansion vs use ofMetro concludes that expansion will be mostcost effective alternative depending onoutcome of San Diego's consent decree.
October 23, 1989
Mr. Jar.es Feasley
Design Division Manager
OTA:T WATER DISTRICT10595 Ja-acha Blvd.Spring Valley, CA S3Q7S
Dear Ji-:
EastLake is c-rrer.tly i-pler.er.tirg the use cf
reclair. water withir. The Graer.s, cur newestccrr.rvur.ity. Tr.e use c: tne reclai— water ce~anwith the grading cf the Greens and will be usedfor irricaticn within the project's coif course,parks, corjr.cn areas, and schools. We arecontinuing cur cc:rj;it:T.er.t to the use cf reciain
water by utilizing it wherever possible within thefuture ccnnunities of EastLake.
E/1STL/1KE
Crv:LO?M£NTCOMPANY
Ir. addition, the Oly—ric Training Facility loca.ec
witi-.ir. EastLaXe is planning to use reclairs waterex-ensively in the irrigation cr the clavi-c fieldar.c. the ccr-r.on areas.
EastLake is looking forward to working with theOtay Watar District in implementing the use cfreclain water, where feasible, ir. an effort tcconserve the use cf the cctable water su-cr:lv.
William T. Ostre-Prcject Manager
WTO: cr.d
Ecstlcke Business Center9CO L=ne AvwnueSuite 1OCCnuo vino. OV 92O1J(619) 471-C1J7f*X (615) 42i.U3C
EXHIBIT D