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Mr. Smith presented the portion of the staff report related to the recycled water project, beginning with a CEQA addendum to the initial study/mitigated negative declaration for the project. He noted that the addendum was not distributed with the staff packet but is available on the dais. He also explained that the addendum is identical to the addendum approved earlier this year but that the state required an additional comment period as part of the loan the city is obtaining for the project. During the comment period, a different department of CalTrans from that which commented earlier issued a letter stating the belief that the project sits within the CalTrans easement along El Charro Road. The city responded indicating that this is not the case and that this has already been communicated to the specified member of their staff. The state nonetheless required the city to file another notice of determination on the addendum, which staff will file once certified by the Council. Staff is also recommending the introduction of ordinances adding Chapter 14.06 and Chapter 14.20 to the Municipal Code. 14.06 relates to Regulation of Recycled Water Use and compliance with state requirements. The chapter discusses the permitting process, organization, inspection of customers and the permit fee. He noted that the permit fee of $75 is about half that for a potable system. Chapter 14.20 is in response to the state law requiring agencies with recycled water systems to have a "must use" ordinances. In short, the ordinance requires irrigation users located adjacent to the system to use the system unless they qualify for one of the state exceptions. He noted that all 130 customers of the city's recycled water system voluntarily signed up prior to the ordinance even being drafted. Vice Mayor Brown said a citizen recently asked her if the city intends to offer residents any sort of education series or workshops on low water consumption retrofitting options. Mr. Smith confirmed. He explained that staff had refrained from planning anything specific until more information was released on the state's requirements. Now that this is available staff is preparing a workshop schedule similar to what was offered in 2014 and will be focusing on presenting new information including that related to the Governor's new rebate program. Vice Mayor Brown said she read a recent news article reporting that Pleasanton would be increasing its drought penalties, which seems to disagree with the information presented this evening. Mr. Smith confirmed that there is no change to drought surcharge and again stressed that the goal is to incentivize conservation rather than punish consumption. He explained that the confusion with the media seems to be based on the assumption that the city utilizes a tiered rate system, which it does not. Mayor Thorne opened the item for public comment. William Rose shared his objection to the use of 2013 as the benchmark year as it fails to account for those who began conserving prior to that. He explained that he reduced his water consumption by 40% between 2011 and 2013 but only an additional 12% between 2013 and 2014. He asked that staff find some way to accommodate users like him so that they do not have to apply for an exemption each billing period. Mr. Smith acknowledged that this issue is not limited to Mr. Rose but said there are several tools that staff can use to address this. These include the threshold of 30 units, which the Council ultimately raised to 40 units later in 2014. The Council also authorized staff to look at a users 3-year history to establish whether an ongoing effort at conservation has been made and to compare users to comparably sized properties and billing groups. He explained that staff is very careful to examine all of the tools outlined when examining an appeal. While he could understand the concern with having to file an appeal each period he could not see a way around that process. Michael Grossman stated that in 1999 Zone 7 prepared a proposal to install two dual-purpose ASR wells known as Mocho 3 and 4 at Santa Rita and Stoneridge Drives. The wells were intended to both City Council Minutes Page 6 of 11 April 21, 2015