CC MIN 02012022 - Laserfiche WebLink

increasing dedicated irrigation meters up to $4,000 at 75 cents per square foot. He stated this is a substantial amount of money as an incentive, noting it would be on top of Zone 7's rebates. He added the city funding levels came after discussion of how to best balance the operating costs to the Water Utility while also ensuring customers have an added enticement to participate. There are also tax implications for customers if the benefit exceeds $600 and a cost to the City for providing the documentation to the Internal Revenue Service (IRS). Mr. Repp reported there will be no additional funding required for Fiscal Year 2021-22 with staff- recommended Option 2, but it would require an additional $15,000 from the Water Enterprise Fund starting with FY 2022/23. This funding level will accommodate 80% of the highest number of applications received or 56 residential and three irrigation customers. He stated the $15,000 sum was selected by looking at the highest number of participants the City has seen weighing a balance of not being too heavy on costs while providing a good number of rebate opportunities as an incentive to customers. In response to Councilmember Testa, Environmental Services Manager Rita Di Candia confirmed she has brought up connecting this matter to the new compost regulations presented by Assembly Bill 1383. In response to Councilmember Testa, Ms. Di Candia confirmed AstroTurf is not permitted for rebate consideration but added the City cannot control what the public selects for their private property. She stated they could do outreach about better alternatives. In response to Councilmember Testa, Ms. Di Candia stated the range of costs for a full-yard conversion can vary significantly. She reported about 40% of program participants completed the conversion themselves. She stated the added the average landscape conversion is between 600 and 800 square feet, tending to be on the smaller side. She stated she would have to look into particular applications to know what residents typically pay, noting the City looks only at eligible costs and not a resident's overall costs including non-rebate eligible expenses such as labor. She confirmed labor cost is not included in rebates, only material costs. In response to Councilmember Testa, Director of Finance Tina Olson confirmed there is a category for water conservation projects in the American Rescue Plan Act (ARPA) and this would fall under the category. She added the City would have to appropriate the funds through the Council. She stated 100% of the ARPA funds have been allocated to the General Fund. She could not discern how much of the ARPA money is going to community projects. Mayor Brown clarified the ARPA funds are going to things like grants and human services so it is unfair to state none of it is going into community projects. Ms. Olson added it is General Fund revenue so, like Property Tax and Sales Tax, it funds everything the General Fund covers including Public Works, the Pleasanton Police Department, and other costs. In response to Councilmember Testa, Ms. Olson confirmed this would be an eligible use of ARPA funds if Council wishes to make this allocation from the General Fund. She recommended doing this as a part of the mid-year budget if this were the case. In response to Councilmember Testa, Mr. Repp confirmed the window for cool-season planting has passed for this year, adding it is not a requirement of the existing rebate program. He stated, if approved, staff would try to have this program in place by June 1st so applicants would be eligible for next year's cool season planting window. In response to Councilmember Arkin, Mr. Repp clarified it is the City's understanding a value over $600 needs to be recorded and provided to the IRS. Ms. Olson confirmed it would become taxable income if it were over$600. She confirmed Zone 7's rebate is considered taxable income. City Council Minutes Page 9 of 16 February 1,2022