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MEMORANDUM <br />Page 2 <br />B &V 175203 <br />B &V File A4 <br />12 June 2015 <br />As allowed in the City's Municipal Code under Section 39 -112 (2) Water Shortage Contingency Plan, <br />the City of Santa Ana can implement a water allocation methodology per customer account and a <br />schedule of surcharges or penalties for exceeding the water allocation. Any customer that uses <br />water in excess of the allocation will be subject to a surcharge or penalty for each billing unit of <br />water in excess of the allocation. The surcharge or penalty for excess water usage will be in addition <br />to any other remedy or penalty that may be imposed for violation of this section of the Municipal <br />Code. Such surcharge or penalty must comply with the requirements of Proposition 218. <br />Drought Allocation Approach <br />Under the Governor's emergency drought restrictions mandate, the City is being required to reduce <br />its current consumption levels by 12 percent over the same period calendar year 2013. At the <br />direction of the City, Black & Veatch examined the City's revenue requirements for FY16 and <br />adjusted the projected water sales to meet the Governor's mandated cutback of 12 percent. <br />In orderto meet the 12 percent cutback level, Black & Veatch reviewed the consumption levels of <br />the City's customer classes. Table 1 summarizes the levels of reduction that are expected by <br />customer class. <br />-fable 1: Drought Reduction Levels by Customer Class <br />['] Includes Multi - Family Residential, Government, Commercial, Industrial, Institutional, and Schools <br />Single - family residential customers have a high potential for water reduction since approximately 50 <br />to 60 percent of water usage is associated with outdoor irrigation. Non - residential customers <br />typically have separate indoor and outdoor meters, and so, the ability to reduce indoor consumptive <br />use is more limited. Irrigation accounts have the greatest ability to reduce usage in times of drought. <br />Implementation of the Table 1 target reduction levels will follow the procedures outline in the City's <br />Phase 2 Water Supply Shortage resolution. Table 2 summarizes the change in total consumption in <br />hundred cubic feet (hcf) due to drought. <br />75E -5 <br />