A popular water conservation program may end up increasing our water bills.

Water agencies across Southern California have been giving away money to people and businesses that replace their thirsty lawns with drought-tolerant plants.

These rebate programs are wildly popular, but water agency leaders are now questioning whether the biggest of these programs will save much water anytime soon. They’re also concerned the rebates are just subsidies for people who don’t need subsidies.

The San Diego County Water Authority raised the alarm earlier this month about the lawn replacement program run by the Metropolitan Water District, which is on track to give out at least $270 million this year.

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The County Water Authority gets about half its water from Metropolitan, the Los Angeles-based supplier that delivers water across Southern California. The County Water Authority sells its water to 24 local water agencies in the county, and those agencies are the ones that dole out our water bills.

In a strongly worded letter to the Metropolitan board, the County Water Authority said the rebates amount to a regressive tax that transfers money from low-income ratepayers to businesses and homeowners with large lawns.

Right now, there are no limits on the size of rebates. About half the rebate money is going to large commercial landscaping projects that cost $100,000 or more. A country club in Ventura County, for example, is seeking $4 million in rebates from Metropolitan.

Dennis Cushman, the County Water Authority’s assistant general manager, said someone needs to apply brakes to Metropolitan’s program.

“Where is the governance of a program like this that seems to be well out of control?” Cushman said.

Even some of Metropolitan’s own board members say the rebates can benefit homeowners and businesses with lawns at the expense of everyone else.

Glen Peterson, a Metropolitan board member who represents Las Virgenes Municipal Water District, said one residential customer in his district received a $35,000 rebate check.

“That’s an embarrassment,” he said. “I mean, they got rid of grass, sure. But they shouldn’t have had that much grass to begin with.”

Peterson said he supported the program but only if it’s modified.

Critics of the current program also say Metropolitan so far has not showed that it saves much water in the short-term. The San Diego County Water Authority said in its letter that “In spite of repeated requests, MWD has failed to demonstrate actual near‐term water savings resulting from the turf removal program.”

Metropolitan does expect to save water in the long-term. Water officials think about water in a big unit known as an acre foot – that’s 325,000 gallons of water. Metropolitan estimates its current rebate program will save about 168,000 acre feet of water over the next decade. That’s about three-fourths the amount of water the city of San Diego uses in a single year.

Metropolitan offers rebates of up to $2 for every square foot of land converted to a California-friendly landscape. That includes water-wise plants like agave and sage or artificial turf. To get a rebate, residents and business owners must apply for and receive approval to start their project and submit a “before” picture of the grass they want to replace. Once the project is complete, they must submit photos of the same area transformed into a desert-friendly landscape.

So far, Metropolitan has been using surplus money from its $1.6 billion yearly budget to pay for the rebates. But that money is quickly running out – it could be gone in a matter of weeks because demand is skyrocketing. In one week this month, Metropolitan received requests for $33 million in turf rebates.

Metropolitan would have to raise its water rates by 7 percent for every $100 million it can’t pay for using its dwindling surplus.  Next year, the program could cost more than $300 million. And while there may be some more surplus money, that won’t be enough to cover the full cost of the program, so rates would have to increase. Metropolitan doesn’t sell water directly to customers, but any rate increase would trickle down to nearly every water customer in Southern California.

Metropolitan officials know all this and are looking to curb the program by putting limits on how much customers can receive.

But its board of directors, made up of representatives from the various agencies that receive its water, is having trouble agreeing on what to do, in part because of questions about who is benefitting from the program now.

Metropolitan’s chief financial officer, Gary Breaux, said Metropolitan’s rebate program has been audited several times and is well controlled.

Any new restrictions on the rebate program would likely curb the amount of money businesses can collect.

“You want to make the rebates available to a broad collection of people so you can motivate a greater set of people to go to drought-tolerant landscaping,” said Robert Wunderlich, a Metropolitan board member representing Beverly Hills. Wunderlich supports the program but said he would approve of new limits.

The County Water Authority had its own rebate program, which ran out of money several months ago. A spokesman said that program got its cash from state grants and had different requirements than Metropolitan’s.

Metropolitan’s program has two goals. First, the new drought-tolerant landscapes are supposed to use less water. The second is to raise awareness about the need to cut outdoor water use. There are issues with both.

The savings aren’t cheap. The price to save an acre foot of water using the rebate program is expensive versus nearly every other source of water. A few critics of the rebate program said Metropolitan should have used the hundreds of millions of dollars it’s on track to spend on lawn rebates to start paying for a big new water project, like a desalination plant or a new reservoir – projects that would increase the available supplies of water.

Deven Upadhyay, Metropolitan’s top water resources manager, said Metropolitan can do both things at once.

“We’re not doing this absent other things to produce water supply,” he said.

The other reason for the program is more nebulous: It was meant to help to raise awareness about the need to save water outside the house. Previous water conservation efforts focused largely on indoor water use but about half of a single-family home’s water is used outside.

But with water now the No. 1 issue in California and mandatory cutbacks in effect across the state, critics of the rebate program question the need for such an expensive program to raise awareness about cutting water use.

“I believe once the governor stepped in and issued his executive order, the public has come to realize this is really serious, they’ve got to do something and one of the main things they need to do is get rid of their lawns,” said Keith Lewinger, one of the San Diego County Water Authority’s representatives on the Metropolitan board.

    This article relates to: California Drought, Must Reads, Science/Environment, Water

    Written by Ry Rivard

    Ry Rivard is a reporter for Voice of San Diego. He writes about water and land use. You can reach him at ry.rivard@voiceofsandiego.org or 619.550.5665.

    Emi Kaneshiroe
    Emi Kaneshiroe subscribermember

    I have suggested to water authority umpteen times before.  The best way to help save water is to one bill us every month and second, to encourage us to save with smart water meters.  I am not sure why SDGE needs smart meters  to monitor electricity.  We need them more to monitor water use.  We should be getting notices what our neighbors are using for water rather than how they are using electricity.

    Matty Azure
    Matty Azure subscriber

    The SoCal Water Smart program is currently out of funds.


    Always Thirsty, Rarely Hydrated

    Diogenes subscriber

    Why enough water will never be enough for California


    Increasing population in a desert during extreme drought during climate change is like widening streets and freeways.

    There is no solution for drought. Uncertainty will continue under these circumstances.

    tarfu7 subscribermember

    Great summary of a complex issue. Glad to have Ry on the VOSD staff.

    Derek Hofmann
    Derek Hofmann subscribermember

    "In a strongly worded letter to the Metropolitan board, the County Water Authority said the rebates amount to a regressive tax that transfers money from low-income ratepayers to businesses and homeowners with large lawns."

    On April 10th of this year, the 4th District Court of Appeal ruled that San Juan Capistrano's tiered water rates violates a law voters approved in 1996 that prohibits government agencies from charging more than the cost of a service.

    For that reason, wouldn't Metropolitan's water conservation program also be illegal?

    Janet Shelton
    Janet Shelton subscriber

    @Derek Hofmann My understanding is that it's illegal unless the higher tiers are shown to be necessary because increased usage results in increased costs.  For example, I'm guessing that increased usage could be documented as being the reason that desal water is being contracted at substantially higher rates and thus heavy users should pay more.  But bottom line, it has to be documented, not arbitrary tiers. 

    Kathy S
    Kathy S subscriber

    @Janet Shelton @Derek Hofmann 

    Capistrano Taxpayers Association (CTA) lawsuit:.....Governor Brown issued an executive order requiring Californians to reduce their water use, and water agencies are tackling the task of making that happen.

    Many water suppliers either currently have, or are planning on implementing, tiered rates to deal with the water usage cuts.  However, the Court of Appeal out of Santa Ana just issued a decision that could complicate matters, and may have far-reaching implications on any future use of tiered water rates.

      In 2011, the city of San Juan Capistrano adopted a new water rate structure that created four tiered water rates, with substantially higher rates as the water use increases.  The newly formed Capistrano Taxpayers Association (CTA) filed a lawsuit challenging the tiered rates as violating Proposition 218’s limit on fees that a government agency can charge for services.

         The trial court agreed with the CTA and held that the rates were not compliant with Proposition 218.

    The Court of Appeal agreed and upheld the trial court’s ruling.  The Court of Appeal held that Proposition 218 requires water agencies to justify their tiered rates based on the costs of service for those tiers.  Agencies cannot use legislative, discretionary power to attribute percentages of total costs to the various tiers.  In addition, the agencies must have evidence to back up their claims that the rates are tied to the costs of service.

       So what does that mean for the future of tiered rates?   

        The Court of Appeal specifically stated that tiered rates are not prohibited by Proposition 218. However, if agencies choose to institute tiered rates, they have to do so based on the actual costs of service for those tiers.  That means that agencies cannot implement tiered rates as a penalty.

    The ruling’s precedent: “It’s really a matter of ‘show your work.’”

     Does San Diego have a tiered system?    Go peek.....http://www.sandiego.gov/water/pdf/rates/jan20142015factsheet.pdf 2014 and  http://www.sandiego.gov/water/rates/rates/ 2015

    Kathy S
    Kathy S subscriber

    @Janet Shelton @Derek Hofmann  Tiered pricing addresses an equity concern of market-pricing programs: The allocation of a scarce resource by individuals’ willingness to pay (WTP), and thus the possibility of pricing out poorer people. Flat rates — where every gallon of water is priced the same — provide little incentive for well-off individuals or companies, who are less price-sensitive, to reduce their use. Increasing the per-gallon rates as consumption rises incentivizes heavy users of water without penalizing those who are already conserving, and results in greater savings overall.

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