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Impact of Governor's Mandatory Water Restrictions on Common Interest Developments

By Sandra M. Bonato, Esq. and Raymond P. Ramirez, Esq.

On April 1, 2015, California Governor Jerry Brown signed an Executive Order requiring that urban water usage throughout the state be cut by 25%. This follows prior 2014 Executive Orders and proclamations that a State of Emergency exists in California due to severe drought conditions.

The April 1 Executive Order is the first of its kind to impose mandatory water use restrictions on urban areas throughout the State. It will significantly impact common interest developments in the most populous parts of the State and how their associations manage water usage and align their policies and rules in support of the State's conservation goals.

What the Order Says

Executive Order #2 indirectly affects residential, commercial and industrial CIDs by applying restrictions in varying degrees to the agencies that supply water to them, restrictions that will be passed on to residents and other users. The Executive Order states:

The State Water Resources Control Board (Water Board) shall impose restrictions to achieve a statewide 25% reduction in potable urban water usage through February 28, 2016. These restrictions will require water suppliers to California's cities and towns to reduce usage as compared to the amount used in 2013. These restrictions should consider the relative per capita water usage of each water suppliers' service area, and require that those areas with high per capita use achieve proportionally greater reductions than those with low use. The California Public Utilities Commission is requested to take similar action with respect to investor-owned utilities providing water services.

How the Order Applies

Executive Order #2 requires the Water Board to impose restrictions on local water suppliers to achieve the 25% reduction. Not all water suppliers will be equally affected, since some have already achieved considerable conservation and water savings in the past several years. To see how a particular city, special district or water supplier in your area currently fares, we have republished the following list produced by the Water Board: www.berding-weil.com/pdf/urban-water-supply-usage-tiers.pdf.

Water suppliers are going to be subject to serious, expensive fines and penalties if they cannot reduce water usage to the mandated levels. Water suppliers are permitted to develop rate structures and other pricing mechanisms (e.g., surcharges, fees, and penalties) to encourage consumers to reduce water consumption and help meet the water suppliers' mandated reduction.

Impacts on Common Interest Developments

Associations should expect to feel the impacts of this new reality. State law at Civil Code section 4735 currently voids CC&Rs and rules that prohibit or effectively prohibit owners from using low water-using plants as a group or to replace existing turf (lawns). Fines, if authorized, can be levied for yards that are unkempt or untrimmed but not solely for browned-out landscaping during the State of Emergency.

Aligning Landscape Standards

Most associations are responsible for architectural control. As a result of the Executive Order, it is likely that associations will see an increase in landscaping applications for redesigns that incorporate drought-tolerant plants, more mulch or bark top treatments, and smart irrigation systems that use very little water. Associations can help maintain visual harmony in landscape design by adopting pre-approved plant lists and promoting smart irrigation systems that maintain the character and look of a development while staying as green as possible and supporting strict water conservation efforts. Circulating positive information can help neighbors who are perhaps bewildered and not know what steps they can take in light of the Governor's orders.

Smart Document Alignments

The Executive Order might also encourage associations to consider governing document amendments that, at least for the duration of the drought, could provide for installation of such things as artificial turf or permeable pavers where softscape is currently the standard. Another of the Governor's orders, Executive Order #3, directs the Department of Water Resources to provide funding to allow for lawn replacement programs, which is likely to lead to a surge of interest. Rules and policies could be modified to directly collaborate with water suppliers and such programs when they are made available.

On a more permanent level, document changes, grants of easements, and fair ways to reallocate water use assessments could be considered to facilitate use of reclaimed water for landscaping where available. Local waste water districts might be able to help by laying pipe for use of reclaimed water for outdoor use. While major lines and branch connections from existing lines can be costly (and reclaimed water isn't free), drought seems to be the foreseeable future for California, and planning now for ways to work with local agencies to identify reclaimed water opportunities makes good sense.

Single Meter Communities

“Single meter” communities are ill-equipped to effect water conservation if water users are uncooperative and wasteful and feel the drought does not apply to them. Unfortunately, water suppliers are authorized to enforce water reduction goals by applying fees and penalties to the associations in whose names single meter water usage is billed. The result, of course, is a patently unfair and inconsiderate allocation of the added cost to all owners, including those who are doing their best to save water. Such communities would potentially benefit by considering investments in sub-meters to the extent feasible, finding lawful ways to bill water usage on a per-unit basis or some other fair subset of all users (again, document amendments might be needed), and working with water suppliers to determine if and how fees and penalties could be passed through to wasteful end-users.

Final Thoughts

The Governor's Executive Order impacts all Californians in urban areas, but has very specific and often unique legal, financial and practical consequences for common interest developments. CIDs are best served when their associations stay informed about the State of Emergency that exists, stay open to the changes that will be needed, and plan ahead in support of the State's critical need for water conservation.

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