Ordinance 2009-01
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ORDINANCE NO. 2009- 01
AN ORDINANCE OF THE CITY OF GILROY AMENDING
CHAPTER 27, ARTICLE IV, OF THE GILROY CITY CODE
PERTAINING TO DAILY WATER USE ALLOCATIONS AND
WATER OVERUSE PENALTIES.
WHEREAS, regulation of daily water use allocation contracts for new commercial or
industrial construction; calculation of daily water use allocations for existing parcels of real
property, and rules setting forth amounts to be paid for additional allocations to such parcels of
real property are reasonable terms and conditions related to daily allocation for water use as set
forth in the above-referenced sections of the City Code; and
WHEREAS, on September 15, 1986, the City of Gilroy enacted ordinance 86-16, which
created the water overuse ordinance set forth in Chapter 27, Article IV, of the Gilroy Municipal
Code, in order that effective control of water use could be pursued in the City of Gilroy; and
WHEREAS, the City has determined that said ordinance requires revision.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GILROY DOES
ORDAIN AS FOLLOWS:
SECTION I. Chapter 27, Article IV, of the Gilroy City Code is amended, in its entirety,
to read as follows:
CHAPTER 27
ARTICLE IV, DAILY WATER ALLOCATION AND OVERUSE PENALTIES
Sec. 27.76
Daily Water Use Allocation.
(a) In accordance with the terms of this Chapter 27, the city shall calculate a daily
water use allocation for: (i) existing parcels of commercial and industrial real property that have
a connection to municipal water service but do not have an existing water use allocation; (ii)
existing parcels of commercial and industrial property that have existing water use allocations,
which allocations were not imposed on such parcels as part of, or in conjunction with,
agreements related to development or improvement of the parcels; and (iii) parcels of real
property for which the city receives applications for new commercial and/or industrial
development or uses as well as increased water capacity allocation.
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(b) A daily water use allocation for any parcel of real property shall be purchased
from the city at such cost and on such terms and conditions as may be established from time to
time by city council resolution.
(c) Upon receipt of an application for a daily water use allocation for new
development on a parcel of real property, or for increased water use for an existing development
on such a parcel, the city may require an applicant for purchase of a daily water use allocation to
provide information necessary to confirm, to the city's satisfaction, that the allocation
corresponds to the amount of water that occupants of the parcel are reasonably expected to use.
The city shall have the right, in its discretion, to determine whether the applicant's requested
allocation is sufficient, insufficient or excessive.
(d) Upon receipt of an application for a commercial or industrial use on a parcel of
real property, which parcel already has a connection to the municipal water service, but no
current daily water use allocation, the city shall issue a daily water use allocation for such parcel
as further set forth in Section 27.76 - 1 below. For any parcel with such an existing connection
to municipal water service, existing water use shall be allocated at no cost. If the parcel
thereafter requires an additional water use allocation, such allocation shall be purchased at such
cost and on such terms and conditions as may be established from time to time by city council
resolution.
(e) The city's daily water use allocation shall be considered an entitlement that shall
not be alienable from the parcel of real property containing such allocation. Upon subdivision of
such parcel, the water use allocation shall be divided proportionately among the resulting parcels
of real property based on the square footage of the land contained in each resulting parcel.
(f) Upon determination of an appropriate daily water use allocation for all parcels of
real property for which a new or increased allocation is sought, the city and the parcel owner
shall enter into a water capacity allocation agreement in a form determined by the city, in its
discretion, which agreement shall entitle the parcel owner to the daily water use allocation
specified therein. The city may, at its discretion, record such agreement.
Section 27.76 - 1. Calculation of Daily Water Use Allocation.
The daily water use allocation of any parcel of real property shall be determined by
adding together (i) the parcel's peak daily general use, plus (ii) the parcel's peak daily irrigation
use.
For purposes of this chapter: (i) "daily general use" shall be defined as the parcel's
average, daily consumption of water, excluding water used for irrigation; (ii) "peak daily general
use" shall be defined as the parcel's highest, average daily consumption of water, excluding
water used for irrigation, in any given billing period within the preceding thirty-six (36) months;
and, (iii) "peak daily irrigation use" shall be defined as the parcel's highest, average daily
consumption of water for irrigation purposes in any given billing period within the preceding
thirty-six (36) months. Neither peak daily general use nor peak daily irrigation use shall be
calculated based on any billing period during which the parcel experienced water use in excess
of fifty-percent (50%) greater than the average water use billed during the same month for the
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preceding three (3) years because of a water leak or other abnormal occurrence that is not likely
to reoccur regularly.
The city may reduce the peak daily water use allocation if it determines, based on
evidence regarding the proposed or actual use of the parcel, that water use on the parcel will be
substantially less than that calculated pursuant to the preceding paragraph. In such event, the
city may set the peak daily water use allocation to reflect the amount of water capacity that city
reasonably determines will be used by the parcel.
Section 27.76 - 2. Appeal of Daily Water Use Allocation.
If a parcel owner disagrees with the city's proposed daily water use allocation or any
action taken by the city increasing or decreasing such allocation, such parcel owner shall have
the right to appeal such action(s). Any such appeal shall be made no later than thirty (30) days
after the city's mailing to the parcel owner of notice thereof pursuant to procedures adopted by
the city from time to time. The appeal shall be in writing and shall provide the city with written
evidence sufficient to prove to the reasonable satisfaction of the city engineer, or his/her
designee, that the proposed daily water use allocation does not reasonably reflect the parcel's
expected water use.
Sec. 27.77
Permissible Water Use/ Calculation of Daily Water Use.
Water use shall be limited to the daily water use allocation. After establishment of the
daily water use allocation for a particular parcel of real property, the city shall monitor water use
of such property through water meter readings.
For purposes of this Section 27.77, a parcel's daily water use shall be computed by
dividing the parcel's daily general and irrigation use by the number of days in that billing period.
Sec. 27.78
Underuse.
If a parcel's daily water use, as determined by the city pursuant to Section 27.78-1(b)
below, is consistently less than the daily water use allocation, the city may provide the parcel
owner written notification of such underuse. The parcel owner may offer to sell the excess
allocation back to the city at the price originally paid for such allocation or , except as set forth in
Section 28.78 - 1, retain that amount for growth or expansion. The city shall have no obligation,
however, to purchase such excess allocation from the parcel owner.
Sec. 27.78 - 1. Recission of Daily Water Use Allocation Due to Underuse.
(a) Notwithstanding the provisions of Section 27.78, no earlier than ninety (90) days
and no later than one (1) year after the city's mailing of a notification of underuse as set forth in
Section 27.78, the city shall be entitled, in its discretion, to rescind all or a part of the daily water
use allocation to a parcel if the parcel's daily water use is consistently underused as further set
forth in subsection (b) below. Any such recission shall be in writing and accomplished in the
manner set forth in subsection (c) below.
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If the city had granted the parcel all or any part of its existing daily water use allocation at
no cost (either as an existing use pursuant to Section 27.76(d), through a fee waiver or
otherwise), the city shall be entitled to rescind, in its discretion, such part of its daily water use
allocation as was provided at no cost without repayment to the owner of the parcel on the date of
such allocation. If the city rescinds any daily water use allocation for which the parcel owner
was charged, the city shall pay the parcel owner the current value of the allocation as determined
by the current cost for such allocation charged to parcel owners. For purposes of this Section,
any daily water use allocation that was granted at no cost shall be considered the first allocation
that is rescinded by the City; the City shall not be required to reimburse the parcel owner for lost
daily water use allocation until the amount of daily water use allocation that was granted at no
cost has been fully rescinded.
(b) For purposes of this Section 27.78 - 1, a parcel's daily water use allocation shall
be considered consistently underused if the average daily water use by such parcel in the thirty-
six (36) billing periods prior to the notice of recission is below the existing allocation. The daily
water use allocation shall be determined as set forth in Section 27.76 - 1.
(c) The city shall provide a parcel owner with notice of recission of any portion of
such owner's daily water use allocation, in writing, at the address of the parcel owner set forth in
Santa Clara County Tax Records, unless the city has been provided with written notification of a
more current address. Recission of any portion of a parcel owner's daily water use allocation
shall take effect no earlier than sixty (60) days after the date of such notice.
(d) If a parcel owner appeals the determination ofunderuse pursuant to Section 27.76
- 2 and shows, to the reasonable satisfaction of the city engineer (or his/her designee) that
underuse has occurred for reasons not reasonably within the parcel owner's control, the city shall
suspend its right to rescind the parcel owner's allocation for no fewer than twelve (12) additional
billing periods. If, at the end of such suspension, the parcel continues to underutilize the
allocation, those portions of the allocation not being used by the parcel may be rescinded by the
city. In the event that recission of the parcel's daily water use allocation has been delayed due to
such suspension, the amount the city shall pay to the parcel owner in compensation for its
rescinded daily water use allocation shall be the amount that would have been paid at the time
the city first informed the parcel owner of its underuse.
(e) If the City finds that a parcel owner has used water specifically to retain its daily
water use allocation and not for any other purpose necessitated by lawful commercial or
industrial activities on the parcel, City may also rescind a daily water use allocation following
notice to a parcel owner as further set forth in subsection (c) above and, thereafter, disconnect
such service at city's discretion.
Sec. 27.79
Overuse.
(a) If the actual daily water use on a parcel of real property is greater than the daily
water use allocation for that parcel in any given billing period (which, for purposes of this
chapter, shall be referred to as the initial overuse period), the city shall provide the parcel owner
a written notice of overuse in the billing period following the initial overuse period. The notice
of overuse shall state (i) the occurrence of the water use in excess of the daily water use
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allocation and (ii) the higher rates imposed pursuant to Section 27.80 for such overuse. For
purposes of this chapter, overuse shall refer to water use billed to a parcel which use is in excess
of that parcel's water use allocation.
(b) The City shall provide a parcel owner with a notice of overuse if the parcel's daily
water use exceeds its daily water use allocation three (3) times in any six (6) consecutive billing
periods, which six (6) consecutive billing periods shall be referred to in this Section 27 as the
overuse period. The notice of overuse shall inform the owner of a parcel of real property that the
owner's parcel has exceeded its capacity during the overuse period and that, if the parcel exceeds
its water use allocation for any additional billing period during the probationary period following
the overuse period, the overuse rates set forth in Section 27.80 will be applied to the parcel. For
purposes of this Chapter 27 the "probationary period" shall be defined as the twelve (12) billing
periods following the overuse period.
(c) All notices of overuse referred to in Sections 27.79(a) and (b) shall inform the
parcel owner of the owner's right to enter into a new water use allocation agreement to increase
amount of water allocated to the parcel if such additional capacity is available.
(d) If a parcel's average daily water use over a period of thirty-six (36) consecutive
billing periods exceeds its total water use allocation for that period, the City may require the
parcel owner to enter into a new water use allocation agreement reflecting the parcel's expected
average daily water use, even if such parcel does not meet the criteria for imposition of overuse
rates set forth in Section 27.80. In such event, the City shall provide the owner with a notice of
its overuse and a proposed water use allocation agreement reflecting the property's expected
average daily water use. Failure of the parcel owner to enter into such water use allocation
agreement shall subject the parcel to the overuse rates set forth in Section 27.80(f).
Sec. 27.80
Overuse rates.
(a) The rate charged for the first billing period in which overuse occurs during the
probationary period (as defined in Section 27.79(b)) shall be ten (10) times the highest existing
water use rate for that parcel. This shall be referred to in this Chapter 27 as the "1 OX overuse
rate" .
(b) If the average daily water use is greater than the daily water use allocation in any
billing period after the 1 OX overuse rate is first charged, then the rate charged for the water use
overage shall be one hundred (100) times the highest existing water use rate. This shall be
referred to in this Chapter 27 as the "100X overuse rate". Except as set forth in Section 27.80(g)
below, the 100X overuse rate shall be effective for any additional billing periods in which the
water used on the parcel exceeds its water use allocation.
(c) For purposes of Sections 27.80(a) and (b), the highest existing water use rate for
parcels with a single meter shall be the rate charged to that meter; and for parcels with two (2) or
more meters, the highest existing water use rate shall be the highest metered rate on that parcel,
except as otherwise set forth in Section 27.80(d) below.
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(d) For purposes of Sections 27.80(a) and (b), for parcels billed at a flat rate, the
highest existing water use rate shall be the highest rate charged for water in the City as set forth
in the City's most current comprehensive fee schedule.
(e) Except as set forth in Section 27.80(g), below, if the average daily water use is
greater than the daily water use allocation in any billing period after the 100X overuse rate is
charged, the city may choose (in its discretion) either to continue to charge the 100X overuse rate
for the water use overage or to terminate the water and/or sewer service to the parcel owner.
(f) If the Owner, through no fault of the City, fails to enter into a new water use
allocation agreement within sixty (60) days after receiving the notice described in Section
27. 79( d), City will be permitted to impose the 100X overuse rate, commencing in the billing
period following the expiration of such sixty (60) day notice.
(g) If, after the notice referred to in Section 27.79(b) has been issued to the owner of
a parcel of real property, water use on the parcel does not exceed the water use allocation for the
probationary period, City shall be required to give the parcel owner a new notice prior to
charging the 10X rate for water use on the parcel. If, after imposition of the 10X rate or 100X
rate on the parcel, water use on the parcel at any time thereafter ceases to exceed the water
allocation for a period of no fewer than twelve (12) consecutive months, City may not charge the
100X rate for the next incidence of water overuse, but rather shall be required to give the parcel
owner new notices of overuse pursuant to Section 27.79 prior to charging the lOX rate for water
use on the parcel. Any renewal of the overuse rates will thereafter follow the sequence of
escalating penalties set forth in Sections 27.80(a) through (e). This section 27.80(g) shall not
apply to parcels for which City has required a new water use allocation contract pursuant to
Section 27. 79( d).
(h) Except as otherwise set forth in Section 27.80(d), above, for purposes of this
Section 27.80, "water use rate" shall be defined as the highest base rate for water use charged to
any meter on the parcel and the corresponding highest tiered rate for water use that can be
charged to that meter.
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SECTION II. All other ordinances and parts of ordinances in conflict herewith are
hereby repealed.
SECTION III. This ordinance shall take effect and be in full force thirty (30) days from
and after its adoption and approval.
PASSED AND ADOPTED this 2nd day of March, 2009 by the following vote;
AYES:
COUNCILMEMBERS:
ARELLANO, BRACCO, DILLON,
GARTMAN, TUCKER, WOODWARD and
PINHEIRO
NOES:
COUNCILMEMBERS:
NONE
ABSENT:
COUNCILMEMBERS:
NONE
APPROVED:
~aY;
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I, SHA WNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Ordinance No. 2009-01 is an original ordinance, or a true copy of the original
ordinance, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council
held on the 2nd day of March, 2009, at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the Ci~ffGilroy this 4th da of March, 2009.
7 ~ U
(Seal)
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