Nc Water Shortage

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    WATER AVAILABILITY: PRACTICAL APPROACHES FOR DEALING WITH

    RESOURCE SCARCITY, ALLOCATION AND GROWTH PRESSURES

    DEALING WITH WATER SHORTAGES

    WITHOUT STOPPING DEVELOPMENT

    Stephen T. Parascandola and David W. Berry

    Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.

    I. Introduction

    North Carolinas two most recent droughts in 2000-2002 and 2007-2008 (thelatter the worst recorded drought in North Carolina history) significantly increased public

    awareness and media attention about the finite capacity of local drinking water suppliesand the need for water conservation. These droughts also ramped up the complex publicpolicy debate over how best to manage and allocate North Carolinas water resources anddetermine what approaches should be taken for long-term water supply planning andshort-term responses to water shortages. Although a wet spring in 2008 filled Trianglearea water supply reservoirs, history shows that drought, low surface water flows, andwater scarcity are problems that will recur--the question is not if, but when theseproblems will recur.

    According to the N.C. Drought Management Advisory Council, as of June 26,2008, 14 counties, mainly in western North Carolina are in Exceptional Drought, 26counties, mainly in western and central North Carolina are in Extreme Drought, and 16counties, including Wake, Durham, Orange, Chatham, and Lee Counties, are in SevereDrought status.1

    A common, but not universally held, expectation is that water demand increases

    as population increases.2 North Carolinas population is estimated to increase by 50%, toover 12 million people, by 2030.3 A leading State study found that corresponding waterdemand also is expected to increase with such population growth and that daily water use

    1 U.S. Drought Monitor of North Carolina, N.C. Drought Management Advisory Council(http://www ncdrought org)

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    will increase by 35% to 2.2 billion gallons per day consumed by 2030.4 Growth,however, was not cited by the City of Raleighs public utilities director, Dale Crisp, asthe culprit for Raleighs water supply shortage during 2007-2008 at its sole-source FallsLake water supply. Mr. Crisp remarked at a gathering of local utility managers thatdrought is what caused Raleighs water shortage, not growth.5

    Both the State and local governments unquestionably face difficult challengesahead to protect and maintain critical water supply resources, while at the same timepromoting healthy, sustainable growth. One positive benefit of the 2007-2008 drought isthat it has energized State and local leaders across North Carolina to emphasize efficient,coordinated water conservation and planning efforts in anticipation of the next drought toease its effects on all water users.

    II. Pending State Legislation and Ongoing Water Allocation Study

    A. House Bill 2499 (Senate Bill 1879) Drought Bill Work in ProgressAt the State level, legislators are considering House Bill 2499 (Senate Bill 1879)

    introduced in late May during the 2008 Short Session of the N.C. General Assembly.6The bills main purpose is to come up with proposed rules for water use during futuredroughts. The original bill, introduced and endorsed by Governor Easley and the N.C.Department of Environment and Natural Resources (NCDENR), would have given the

    States Environmental Management Commission (EMC) authority to promulgateuniform minimum conservation measures, which local governments then would berequired to implement if areas within their jurisdiction were designated in severe,extreme, or exceptional drought by the N.C. Drought Management Advisory Council. Italso would have required the local governments to impose the minimum State waterconservation standards, but still allowed local governments to impose stricter restrictionsif they chose to do so. Local governments also would have express authority to applythe minimum State standards to all water users within their jurisdiction, including those

    served by investor-owned utilities or private water supply wells.

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    As originally introduced, House Bill 2499 (Senate Bill 1879) also would do thefollowing:

    Prohibit use of potable water for uses that can be supplied by reclaimed water,recycled wastewater or gray water in areas designated in exceptional drought formore than 60 days;

    Mandate that local government and large community water systems requireseparate meters for newly-installed in-ground irrigation systems;

    Require NCDENR to develop recommendations by January 1, 2009, for waterefficiency standards for water-using fixtures in residential and commercialbuilding and in-ground irrigation systems and recommendations for efficient

    metering by water systems;

    Require local governments and large community water systems to show that theirsystems have an adequate rate structure for operation and maintenance costs, aleak detection and repair program, and approved water supply plan in accordancewith N.C. Gen. Stat. 143-355, as a condition of receiving certain State funds forextending water lines or expanding water treatment capacity;

    Authorize the Governor to declare a water shortage emergency if the Secretary ofNCDENR determines that the needs of human consumption, necessary sanitation,and public safety require emergency action (currently the Governor only candeclare such an emergency when public health and safety are at risk, which was areason cited by NCDENR ); in such an emergency situation the Governor couldthen require a water system to provide water to a neighboring system7; and

    Require farmers to register their water use withdrawal with NCDENR if theirwater use exceeds 100,000 gallons a day (the current registration threshold forfarmers is 1 million gallons per day).

    The original bill sparked criticism, primarily from local governments and theagricultural community. Lobbyists, State administrators, city and county representatives,and other interested stakeholders began meeting in mid June to try and negotiate a

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    policymakers believe that the bill would alleviate the confusion created whenneighboring local governments impose different water conservation restrictions (e.g.,what might be considered a Stage 1 restriction in one municipality might be considered aStage 2 restriction (or not even applied) in a neighboring municipality. The N.C. Leagueof Municipalities is opposed to those sections of the bill seen as the States infringementon decisions best left to local officials who are in the best position to judge local waterneeds and capabilities.

    From a conservation standpoint, trying to implement uniform drought-responsemeasures on cities and counties across the State is problematic from a conservationstandpoint because the timing and type of conservation measures that will be appropriatewill vary significantly depending on the circumstances faced by the local government.For example, cities that draw their water supplies from a reservoir will have differentconcerns and drought responses than cities that draw their water from groundwater or

    river sources (and vice versa). Economics also factors into the debate over State versuslocal government control over drought-response measures. Many local governmentshave constructed water treatment plants through the issuance of bonds. These localgovernments typically use revenue from the sale of water to assist in meeting their bondobligations. Local governments have to carefully consider and account for the impact ofconservation measures implemented in light of their bond obligations and worry that theStates imposition of uniform measures will ignore or not fully appreciate these economicconsiderations unique to each municipality.

    One compromise tentatively reached was changing the States proposal to imposeuniform conservation policies on local governments to instead allow local governmentsto decide what measures need to be taken to meet water-saving targets. Farming interestsalso have negotiated a change that would continue their exemption from registering wateruse of less than 1 million gallons per day, and instead would report their water use in aconfidential survey to the N.C. Department of Agriculture, which would then compile anaggregate figure for the State. Open issues remain, including how local utilities should

    set rates to encourage conservation.9 As of June 24, 2008, no legislative committee hadstarted debating the bill and its prospects for passage during the 2008 Short Session areunclear.

    B. ERC Comprehensive Water Allocation Study

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    regulatory foundation for water allocation in the eastern United States is comprised ofcourt decisions on riparian rights and reasonable use limits, a handful of State and federalregulatory programs, and specific rules and policies established by each municipalgovernment water supplier (or in the case of a privately-owned public water supplier, theN.C. Utilities Commission). The interested stakeholders include everyone. Beyond theeveryday demands of individual industrial, agricultural, residential, utility, and otherconsumers, there are also environmental needs for water as habitat for fish and wildlife.10

    The final water allocation study report will be presented to the N.C.Environmental Review Commission (ERC) in 2009. For additional information aboutthe study, visit the research teams Water Wiki website at http://water.unc.edu.

    III. Development Moratorium: Land Use Planning Tool, Not a Solution

    On the local level, one legal tool already available to local governments to affordthem time to study, plan and adopt new drought-response regulations, or address criticalwater allocation and infrastructure needs, is to impose a temporary developmentmoratorium. If properly justified, these types of moratoria temporarily can curb growthand new demands on the municipalitys water system. This is usually done throughprohibiting the issuance of major subdivision or other land use permits for a period of sixmonths, one year, or more. Builders, realtors, and other business groups often view adevelopment moratorium as an overly drastic reaction by the local government that will

    negatively impact the economy at all levels and discourage recruitment of newbusinesses.

    A temporary development moratorium is not a solution to growth and waterallocation issues, but it can play a role in the decision-making process to develop andimplement practical solutions. The next portion of this manuscript will brieflysummarize why and how local governments go about implementing a temporarydevelopment moratorium and look at several examples of where such moratoria have

    been enacted, in part, due to water allocation and drought concerns.

    A. Statutory Requirements to Adopt Temporary Moratorium

    Except in a period of crisis, local governments often are reluctant to impose abuilding moratorium for political reasons and the threat of litigation. North Carolina law

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    prohibition on issuing new zoning and building permits, plat approvals, etc.) ofreasonable duration.11

    Specifically, a local ordinance establishing a moratorium must contain thefollowing:

    Clear statement of problems or conditions necessitating the moratorium, whatalternative courses of action other than a moratorium were considered, and whysuch alternatives were inadequate;

    Clear statement of the development approvals subject to the moratorium and howa moratorium on those approvals will address the problems that led to itsimposition;

    Date for terminating the moratorium and statement why that duration isreasonably necessary to address the problems that led to its imposition; and Clear statement of actions to be taken by the city or county during the moratorium

    to address the problems that led to its imposition and clear schedule for thoseactions.

    If the city or county determines there is an imminent threat to public health and

    safety, it can adopt the moratorium ordinance without public notice and hearing. Exceptin cases posing an imminent threat to public health and safety, a development moratoriumwould not apply to projects with vested rights having a valid outstanding building permitor approved site plan, or projects where substantial costs have been expended in goodfaith reliance on a prior valid administrative or quasi-judicial approval. A developmentmoratorium also would not apply to special or conditional use permits and preliminary orfinal plats for which complete applications were accepted before the notice of publichearing to adopt the moratorium was issued. The statutes also provide for expedited

    judicial review of petitions brought by persons aggrieved by the moratorium.

    Any extension of the moratorium is prohibited unless the city or county has takenreasonable and feasible steps to address the problems or conditions that led to impositionof the moratorium. The ordinance extending the moratorium also must address new factsor conditions justifying the extension (in addition to meeting the above-referenced

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    B. Kannapolis, Chatham County, and Southern Pines Examples

    Several municipalities across North Carolina, including Kannapolis, ChathamCounty, and Southern Pines have adopted temporary development moratorium justified,in part, by concerns over growth and water resource management.

    1. City of Kannapolis Moratorium

    During the height of the States drought in 2000-2002, water levels in KannapolisLake, the water source for the City of Kannapolis, fell to 30 inches below normal.Kannapolis Lake ultimately dropped to an all time low of 113 inches below full pond inOctober 2002. After implementing voluntary and mandatory restrictions to limit wateruse, the City of Kannapolis twice suspended building plan approvals and water lineextensions. This first moratorium lasted approximately thirteen (13) months (March

    2001 to April 2002) and the second moratorium an additional five (5) months (August2002 to January 2003).12 During the moratorium period, Kannapolis staff completedwater supply and water distribution master plans, a water allocation plan to keep arunning total of the water available for new development, and a new water line extensionpolicy.

    Kannapolis also collaborated with its neighboring municipalities to addresscritical water supply needs. Kannapolis worked with Rowan County and the City of

    Salisbury to construct a new water line from Salisbury to the northern city limits ofKannapolis, which would provide an additional 2 million gallons of water per day.Charlotte, Kannapolis and Concord reached an agreement to provide 700,000 gallons ofsupplemental emergency water from Charlotte to Kannapolis through Concord.Kannapolis and Concord also began pursuing other new raw water and treated watersupply options tapping the Yadkin and Catawba Rivers. These efforts involved a State-regulated interbasin transfer of water from the Catawba to the Yadkin River Basin. Eventhese types of collaborative, well-intentioned efforts by municipalities are not free from

    legal objections and controversy.13

    12 Water Supply, City of Kannapolis (http://www.ci.kannapolis.nc.us/water_1.asp).

    13 Part of the solution for Kannapolis water problems involved the EMCs decision granting Concord andKannapolis approval for the interbasin transfer of up to 10 million gallons of water per day from theCatawba River Basin to the Yadkin River Basin The EMCs action prompted the State of South Carolina

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    2. Chatham County Moratorium

    In June 2007, Chatham County Commissioners adopted a one year moratorium onmajor new residential subdivisions. The moratorium prohibits any approval ofsubdivisions containing more than twenty-five (25) residential lots or units. Commercialdevelopment is exempt.

    The Chatham County Commissioners approved the temporary developmentmoratorium to give the County time to study and determine the most fiscally responsibleway to manage its future water needs. The County faced an estimated $70 million cost tocomplete needed water supply infrastructure work just to keep up the explosive growthwithin the County and heard from experts who disagreed about the Countys future waterneeds, alternatives and costs. The Triangle J Council of Government Planners estimatesChatham Countys population will increase by at least 50% over the next ten (10) years.Moreover, large areas of Chatham County still are served by well water. Since many ofthose wells reportedly are starting to have problems, planning also is being done toeventually connect these well customers to the larger existing municipal distributionsystems.14

    On June 2, 2008, Chatham County Commissioners approved a six (6) monthextension to the Countys existing moratorium. The Countys residential is now

    scheduled to expire on December 2, 2008. In its justification for the six (6) monthextension, the Commissioners noted several unexpected factors that had arisen during theinitial one year term which needed to be considered in the new subdivision requirements,including the heightened need for stronger water conservation due to the drought and newinitiatives to increase the Countys water supply. The extension gives localadministrators time to finish revisions to the Countys land use ordinances, includingcompletion of subdivision rules, standards for environmental impact statements, andincreased stream and wetland buffers.15

    lawsuit. It likely will take many years for this lawsuit to be ultimately decided. The case first must beheard and decided by a special master appointed by the U.S. Supreme Court. Then the case could bedirectly appealed only to the U.S. Supreme Court. Court documents in the case can be accessed athttp://www mto com/sm

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    3. Southern Pines Moratorium

    On March 11, 2008, the Town of Southern Pines adopted a one year DevelopmentMoratorium Ordinance. The Town Council cited growth-related issues, concern overwater resources, and the Towns ability to supply customers during extend periods ofdrought as some of the reasons justifying the moratorium.16 Development approvalssubject to the Towns moratorium include all rezoning applications and approval of any

    new major subdivision (more than three lots).

    IV. Creative Solutions Without Stopping Development

    A. No Shortage of Creative Solutions

    There is no shortage of creative solutions to provide potable water to communitiesplagued by drought. Several years ago, an Alaskan businessman proposed having a fleetof tugboats tow giant plastic bags full of Northern California water down the coast to SanDiego as a solution to Southern Californias chronic water supply problems. Each bagcould carry about 40.5 acre-feet of water (one acre-foot of water could supply thehousehold needs of two typical families for one year). Although San Diego was intriguedby the idea, residents from the Northern California area organized effective opposition(an alliance called NOBAG) and eventually convinced California regulators to denyrequired permits and approvals for environmental reasons. As crazy as it may sound,

    towing water in bags is nothing new. A Norwegian company has transported water insausage-shaped bags 200 yards long from Turkey to Cypress and a British company hastowed water in bags since 1997 in the Aegean Sea.

    Closer to home in North Carolina, one method the Water Wiki research studyteam is using to brainstorm creative policy options for its ERC water resource allocationstudy is to ask all interested citizens to share and post their suggestions about how to dealwith water shortages on the studys website at http://water.unc.edu. A copy of the current

    list of options and solutions posted by concerned citizens on the Water Wiki website,as of June 25, 2008, are attached with this manuscript.

    B. Local Government Conservation Efforts

    In May, 2008, a citizen asked City of Raleigh Mayor Charles Meeker why

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    With the current conservation measures in place, the City of Raleigh andother municipalities on the system are using about as much water as wedid 10 years ago. Except in times of severe drought, such as last summerand fall, the City has had adequate water even without the conservation weare now undertaking. In addition, a new water treatment plant ofapproximately 18 million gallons a day is being built at Lake Benson andshould be finished by first quarter 2010. The Little River Reservoir in

    East Wake will have a similar capacity when it is completed. Finally, weare working with the Corps of Engineers to manage Falls Lake seasonallyso that there is approximately 20% more drinking water available in thelate spring or early summer.

    17

    Mayor Meekers reply outlines how some local governments are dealing with growth andwater supply issues without imposing a development moratoriumcontinuedconservation efforts, identification of alternative water supplies, development of newwater supply and delivery infrastructure, and more efficient management of existingwater supplies.

    Local government conservation efforts generally fall into four (4) categories:mandatory restrictions, tiered rates for pricing water, rebates for water saving devices,and education programs.

    1. Mandatory Restrictions

    By now most of us are very familiar with the terms Stage 1 restrictions andStage 2 restrictions as applied to the communities where we live. One of mostcommon Stage I restrictions is to limit irrigation of residential lawns with potabledrinking water. Other common restrictions include bans on car washing except atbusinesses that comply with a certification program; no filling of swimming pools;requiring water leaks to be repaired within 24 hours after notice from the public utility;

    and serving water in restaurants only upon request.18

    For municipalities, one important consideration in drought planning is local wateravailability over time, relative to needsomething unique to each watershed.

    19Differing

    local needs, capabilities, and types of water supply sources help explain why the recentdrought response across much of North Carolina primarily consisted of locally imposed

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    water restrictions that varied from jurisdiction to jurisdiction, with little regionalcoordination among local governments.20 One goal of House Bill 2499 (Senate Bill1879), as introduced, was to provide some uniformity across North Carolina about whatminimum water conservation standards should be imposed in certain drought situations.Due to significant objections by local government representatives, the compromise billprobably will not have this uniform drought-response provision. Even if a compromisebill is passed, one can reasonably expect that the debate to continue between State and

    local government officials over allocation of water resources and implementation ofconservation efforts.

    2. Tiered Rates for Pricing Water

    Economics also plays a critical role in water allocationspecifically how water ispriced and how water systems are funded. Another mechanism to encourageconservation is to impose water rates that discourage excessive use. The majority ofcities in North Carolina have adopted a one-price system when it comes to charging theirwater customers. These water rates typically are set annually during the budget processand do not have rate adjustments if supply becomes scarce. Raleigh, Durham, andWilmington currently follow this approach. As such, when faced with drought and watersupply issues in the past, these cities have first looked at ways to discourage water usethrough conservation or imposing mandatory restrictions, while at the same timeconsidering what impacts such measures may have on any applicable bond obligations.

    Private water systems are similarly constrained due to how they are regulated by the N.C.Utilities Commission (NCUC). Private water systems have to obtain the NCUCsapproval for rate increases. Since the procedure for rate increases can take months towind through the NCUCs process, these private water systems also cannot quicklyrespond to water supply shortages.

    Several cities in North Carolina have tiered water pricingcharging higher ratesto customers that use more water. Cary, Greensboro, Charlotte, and the Orange Water

    and Sewer Authority (OWASA) all have tiered water pricing in effect year-round,regardless of whether or not there is a drought or supply shortage. OWASA also hasadopted a drought surcharge in addition to its tiered pricing. As the water supply getsscarcer, OWASA charges higher prices to its customers, except for certain low-incomecustomers, who arguably use less water on average and whose use reflects their essentialdaily needs. Raleigh and Durham city leaders have discussed tiered rates, but have not

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    feedback on their water usage and allow the utilities to communicate conservationmessages with their customers more often through newsletters and other statements in thebill. The disadvantage with monthly billing is the increased costs associated with theadditional meter reading, billing, and accounting.21

    3. Rebates for Water-Saving Devices

    Another conservation measure utilized by some local governments involvesoffering rebates or giveaways of water-saving devices, such as low flow showerheads andtoilets, faucet aerators, and replacement toilet flappers to prevent leaks. For example,starting on June 3, 2008, the Town of Cary began offering, on a first-come, first-servebasis, $150 rebates to its residential and business customers (including those inMorrisville) for replacement of older toilets with lower flow, high efficiency toilets thatuse less water per flush. Carys rebate program is limited to 400 total rebates. Customerscan obtain up to three (3) rebates for each single family property and up to five (5)rebates for a non-residential property. According to Carys Water ConservationCoordinator, Marie Cefalo, Carys largest source of indoor water use comes from toilets.She estimates that the Town can save 2.5 to 4 million gallons of water per year if 400toilets are replaced with the high efficiency toilets. Prices for the high efficiency toiletsstart around $119 and are comparable in price to regular toilets. The rebates only applyto fixture costs. Installation costs are the responsibility of the customer.

    22

    A 2004 study by the U.S. Environmental Protection Agency (USEPA) and theTampa Water Department found that retrofitting homes with such water-saving deviceslowered daily water usage by an average of 92 gallons (or by 46%). In 1993, Tampabegan offering rebates of up to $100 on low-flow toilets as an incentive for its customersto replace older toilets using more water. As of 2005, Tampa had provided $3 million inrebates to replace over 30,000 older toilets for an annual savings of 434 million gallons ofwater. Tampas rebate program ended in April 2008 due to financial constraints.23

    4. Educational Programs -- Get a Conservation Mascot!

    Educational programs are another method employed to promote conservation andare widely utilized by USEPA, state and local governments, and large community watersuppliers. Newsletters and statements with monthly bills give water suppliers a cost-

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    effective way to communicate targeted information about individual water use, as well asconservation tips and new programs.24

    The face of many educational programs is the conservation mascot. On March26, 2008, after months of encouraging its residents to conserve water and install low-flowtoilets and showerheads, the City of Raleigh unveiled Rainy, the Citys new waterconservation mascot. When Rainey was born, Wake County was mired in exceptional

    drought status. By early June 2008, a wet spring had replenished most of the Falls LakeReservoir and moved Wake County back to moderate drought status. On June 5, 2008,the State of North Carolina adopted Conservin Irvin, as the mascot for the Statesdrought education campaign. It remains to be seen whether Conservin Irvin will matchthe immediate success of Rainey.

    C. Expanding Reuse or Reclaimed Water Systems

    Another way to reduce demand on drinking water supplies and manage needs of agrowing population is to increase utilization of reuse non-potable water for certain non-consumptive uses. Reuse water is sometimes called reclaimed water, recycled water, ornon-potable water. Reclaimed water is wastewater effluent that has been highly treatedand meets stringent criteria established by the NCDENR, so that it can be reused, ratherthan discharged to surface waters.25 Benefits of using reuse or reclaimed water are that itreduces demand on drinking, surface, and ground water supplies by providing the public

    with an alternate and reliable source of non-potable water; reuse water costs less toproduce than drinking water; it reduces nutrient loading and pollution to surface waters;and it can be used during all stages of locally imposed water restrictions.

    NCDENR currently allows reuse water to be used for the following purposes:

    Landscape irrigation of residential lawns, golf courses, parks, landscape areas,and other public, industrial or commercial grounds;

    Vehicle washing at construction sites and automatic car washes with sanitarysewer drains;

    Commercial vehicle washing provided dual disinfection using UV and chlorine isperformed prior to use;

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    General construction purposes (i.e., dust control, soil compaction, concrete

    mixing, asphalt reclamation);

    Cooling water; Power washing for buildings, equipment, and automobiles if dual disinfection

    using UV and chlorine is provided prior to use;

    Industrial and commercial toilet flush and fire prevention systems where there areseparate non-potable lines;

    Street sweeping; Sewer line cleaning/flushing; Decorative ponds and fountains that do not have a drain to surface waters; and Pesticide and fertilizer application.

    Reuse or reclaimed water cannot be used for drinking water by humans, livestock,or pets, swimming pools, crop irrigation, indoor residential use, in a manner that permits

    runoff from the site, or within 100 feet for drinking water wells, 10 feet from non-drinking water wells, or 25 feet from all other surface waters or swimming pools.

    There are two types of reclaimed water permits depending upon the type ofsystem employed. A non-conjunctive system is a wastewater system that would relyupon reclaimed water uses to handle and dispose of all of the generated wastewater. Themore common type is a conjunctive system, which has the capability to discharge all ofits wastewater by another permitted means at all times (e.g., NPDES permit) and where

    the reclaimed water option is not necessary for the facilitys disposal needs.26 Manymunicipalities across North Carolina have established bulk reclaimed water fill stations attheir local treatment plants. These stations are conjunctive systems where typicallyreclaimed water is hauled from the plant by tanker truck and used by certified users forapproved purposes. In addition to showing that the reclaimed water is of a qualitymeeting the minimum criteria, a permittee also must have appropriate educational andtraining programs in place to make sure the reclaimed water is being used properly.

    For example, the City of Raleigh currently offers reuse water for bulk pick-up atfour (4) of the Citys wastewater and water treatment plants. The water can only behauled in trucks with proper signage and by truck drivers who have completed the Citysrequired training course. Customers can haul and apply as much reused water as theywant, provided it is used properly. The Citys Little Creek Wastewater Treatment Planti Z b l d d di t ib t t t l t i l di C li

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    water to the Time Warner Cable Music Pavilion at Walnut Creek, the Walnut Creeksoftball complex, and the Raleigh Country Club golf course.27

    Reclaimed water is not the same thing as gray water. The term gray waterrefers to water that has been used for showers, washing dishes, or washing clothes. 28According to North Carolina water quality laws, gray water currently is consideredsewage and must be disposed of through a permitted treatment system, either a publicly

    owned treatment system (or POTW) or permitted septic tank system.29 The N.C.Plumbing Code does allow for limited uses of treated or recycled gray water for flushingtoilets and irrigation, but only after it is filtered and disinfected through a properlydesigned and operated gray water recycling system.

    30

    House Bill 2499 (Senate Bill 1879) would enact a new N.C. Gen. Stat. 130A-345, which would allow the limited use of untreated gray water. Under the originalbill, untreated gray water could be used in periods of drought to hand water trees,shrubs, and inedible plants; provided that, the gray water was applied as soon aspracticable (i.e., not stored) to the same residential property where it originates, was notallowed to runoff onto adjacent properties, roads, or storm drains, and did not contain anysolvents or hazardous chemicals.

    D. Sustainable and Green Building Development

    The green building concept is sweeping across the country, as awareness ofresidential commercial developments impact on energy and water resources increases.According to the U.S. Geological Survey, residential and commercial buildings accountfor 12.2% of domestic water consumption.31 Federal, state, and local agencies areincorporating more green building elements in public (or publicly funded) projects. Asthe need for increased conservation intensifies, state and local governments areincreasingly focusing attention on private developers, through a mixture of directregulation and incentive programs.

    27 Environmental Programs: Reuse Water, City of Raleigh (http://www.raleighnc.gov).

    28 The N.C. Plumbing Code defines gray water as waste discharged from lavatories, bathtubs, showers,clothes washers and laundry sinks.

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    Although multiple rating systems exist, the U.S. Green Building Councils LEED

    (Leadership in Energy and Environmental Design) standard is the most commonly used.32As of this Spring, approximately eight (8) federal agencies, twenty (20) states, and fifty-five (55) cities have policies in place encouraging or requiring LEED certification, atvarious levels.33 LEED ratings are available for several development categories (newconstruction, existing buildings, commercial interiors, building core and shells, homes,neighborhood development, schools, retail, and health care facilities). Points are

    awarded for how the project incorporates a broad spectrum of green elements,including energy efficiency and water savings. Based upon a projects total score, it canqualify as LEED Certified, LEED Silver, LEED Gold, or LEED Platinum. The LEEDsystem has been attractive to policymakers due to its widespread familiarity todevelopers, architects, and engineers -- along with the requirement for independent, thirdparty certification.

    Several large cities, such as San Francisco, Los Angeles, Atlanta, and Seattle haveadopted green building standards into their building codes, typically requiring LEEDSilver or better for all new commercial construction or major alterations (over a certainthreshold square footage). More typically, state and local governments have offereddevelopment incentives (e.g., accelerated permitting, permit fee reductions, and taxcredits). In 2007, the North Carolina General Assembly authorized certain localgovernments to adopt ordinances providing such incentives for green development.

    34

    Mecklenburg County already has implemented a tiered system for building permit fee

    reductions and rebates, based on LEED or Green Globes certification.

    35

    Additionalproposed legislation would implement statewide energy and water efficiency standardsfor projects funded by the State of the North Carolina.36

    Although only five (5) out of a possible sixty-nine (69) LEED points directlypertain to water use, governing bodies in drought-susceptible regions could certainly findways to provide additional emphasis. Water efficiency elements of green design (suchas rainwater recovery for irrigation, low-flow showers and toilets, recirculation and dual

    32See http://www.usgbc.org for details. The Green Building Initiatives Green Globes system operates ina similar fashion (including independent, third party verification), and the National Association of HomeBuilders (NAHB) has issued its own guidelines and online registry. Based on the NAHB model,developers in Durham, Orange, Wake, and Chatham Counties launched the Green Home Builders of theTriangle initiative in January 2008.

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    plumbing systems) will almost certainly become more common in local building codes.Additionally, green building requirements also can tie into other water managementprograms. Consumer demand is already fairly strong for environmentally sustainabledevelopment, and programs like tiered billing can only increase interest. Even with lawnwatering prohibitions lifted in most Triangle jurisdictions, municipalities likely willcontinue to encourage green building practices like xeriscaping landscapes that aretraditional in appearance, but use much less water, as a means of reducing demands on

    local water supplies.37

    E. Conservation Incentives

    There are various types of incentives and voluntary programs designed to increasewater conservation and efficiency efforts. These range from abatements and off-setsagainst otherwise applicable water billing charges, to grants and incentives to assist withthe implementation of efficiency and reuse equipment. These programs exist at thefederal, state and local levels.

    For example, at the federal level, the United States Department of the Interior,Bureau of Reclamation, administers the Water 20 25 Challenge Grant Programpursuant to which a local water management authority can receive up to $300,000 foreach project in which physical improvements are made that will conserve water andimprove water management.38 Numerous programs exist on the state level as well. For

    example, the Regional Water Authority of Asheville, Buncombe and Henderson hasimplemented a program under which businesses practicing state of the art waterefficiency measures can receive a water efficiency certification. This certification canexempt such businesses from various water use surcharges. It has been estimated thatthis program alone resulted in a water savings of more than 90 million gallons per yearfrom certified facilities.39 Meanwhile, California has set aside up to $380 million dollarsfor its Proposition 50, pursuant to which public agencies and non-profit organizationscan receive up to $50,000 in planning costs, and $25 million dollars in implementation

    costs, for projects that protect communities from drought, protect and improve waterquality, and reduce dependence on imported water.40

    37 http://www raleighnc gov The City of Raleighs Public Utilities Department has produced an

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    Local governments also have implemented measures to incent individuals to

    conserve water at the town and city level. For example, in March 2008, the Cary TownCouncil approved new water conservation incentives to address increased water supplyneeds. Some of the incentives approved by the Town of Cary include monetary rebatesfor high efficiency toilets and a turf buy back program, pursuant to which propertyowners can receive a $500 credit to replace at least 1,000 square feet of turf with eithernatural area or drought-resistant grass.41 In fact, incentives to change high water

    landscaping with low water uses (xeriscaping) are the subject of numerous incentivesand award programs throughout the United States. As is the case in the Town of Cary,many cities require at least 1,000 minimum square feet of converted area to qualify for anincentives credit. Other measures, such as the credit offered by the City of Peoria,Arizona, for installation of hot water recirculators, are targeted more at increasing the useof more water efficient household equipment.42

    F. Salt Water Desalination

    Nearly a decade ago, while the Tampa Bay, Florida region suffered through anextreme drought, the local water utility explored options about how to drought-proof itswater supply system. Tampas answer was seawater. Earlier this year, the Tampa BaySeawater Desalination Plant became the nations first large-scale seawater desalinationplant to begin operations. The Plant is designed to produce up to 25 million gallons perday and can be expanded in the future to produce up to 35 million gallons per day.43

    Desalination, the process of removing salt and other dissolved minerals frombrackish water or seawater to produce potable water, offers the potential of a virtuallydrought-proof solution to water shortages without stopping development. The benefits ofdesalination include a plentiful water supply source for coastal communities, a highquality potable water product, minimal reliance on extended delivery systems, and localcontrol over potable water. So, why havent more coastal communities followedTampas example?

    There are several major problems with the widespread use of desalination,specifically, high costs, entrainment (capture and destruction of aquatic organisms at theplants feed intake), and waste disposal. Design and construction costs for a desalinationfacility are much higher than the costs of a conventional water treatment plant.Operational expenses, particularly for electricity, also are much higher. Depending on

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    desalinated water can range from 1.2 10 times as much as the cost of conventionallytreated water.44 According to one expert, the cost to consumers for conventional watertreatment ranges from about 90 cents to $2.50 per 1,000 gallons; compared with $1.50 to$3.00 per 1,000 gallons for brackish water treatment, and $3 to $8 per 1,000 gallons forocean water treatment.45

    Desalination facilities typically have large intake structures because they have to

    use substantially more feed water than a conventional plant to produce the same amountof potable water. Environmental concerns raised over the potential destruction of aquaticorganisms during the intake process have complicated and delayed permitting andconstruction of desalination facilities. These facilities also have to dispose of largeamounts of liquid wastewater in compliance with applicable environmental laws. Thewaste is usually comprised of chemicals added during the desalination process. Theremaining more heavily concentrated saltwater also cannot simply be returned to the feedwater source without treatment and dilution. Disposal options include ocean and surface

    water discharges, reuse in a domestic wastewater facility, and blending with freshwaterfor other industrial and irrigation use.46

    Although cost was the reason Tampa had not considered seawater desalination inthe past, technological advances brought the cost of desalinated water down significantlyenough for Tampa to believe the project was viable and economically feasible. TampaBay Water, like most local water providers, did not have the expertise in-house to designa full scale desalination plant. After its original developer failed to deliver a plant up tospecifications, Tampa Bay Water partnered with two companies that had worldwideexperience in desalination plants to finish the project, American Water and Acciona Aguaof Spain. To overcome the waste disposal problem, Tampas desalination plant blends itssalty wastewater with large amounts of cooling water from a nearby power plant. Thisdilution process allows the plant to discharge wastewater to Tampa Bay without changingTampa Bays overall salinity. 47

    Due to high costs and environmental concerns, there are only about twelve (12)small scale desalination plants along North Carolinas coast, which all together produce

    44 De La Parte, Jr., Edward P. and Yerkes, Kristin A., Emerging Issues in Desalination and ReclaimedWater Law, Trends, ABA Section of Environment, Energy, and Resources Newsletter, May/June 2008, p.12

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    only about 14 million gallons of potable water daily. (By way of comparison, the City ofRaleighs water plant produces about 50 million gallons daily.) Four (4) of those plantsare located in Dare County, with the largest in Kill Devil Hills producing about 5 milliongallons daily. With increasing demand for water in the face of continuing growth,however, at least five (5) more desalination plants are planned to supplement coastalcommunities. In February, 2008, Pasquotank and Currituck Counties awarded contractsto build two desalination water treatment plants that eventually will produce a combined

    6.5 million gallons per day. While these types of desalination plants may provide a goodoption for affluent coastal communities that are willing to pay more for their monthlywater supply, they are not yet economically feasible options for inland communities. Theinfrastructure costs alone to pump and pipe treated desalinated water to these inlandcommunities would be prohibitively expense.48

    V. Conclusion

    The public expects government to perform its role to properly allocate andmanage water supply resources. The ongoing drought across most of North Carolina hasheightened public awareness about the scarcity of water to unprecedented levels. Mostconsumers today have a better appreciation of waters true value than they did 5-10 yearsago. Most citizens also can appreciate and understand that the only way theircommunities can grow is if their local water supplies are adequately protected andmanaged and alternative, back-up water supply sources are put in place. Innovative andcreative solutions are needed to manage water demands during the ongoing drought andfuture droughts in North Carolina. Increased conservation efforts, expanding the use ofreclaimed water, transferring water between river basins, identifying new water supplies,desalinating water, and pricing water to reflect what it actually costs to deliver are alloptions that can be applied and implemented when local circumstances warrant.

    The key challenge facing State and local leaders is to reach agreement on what todo and then follow through with their solutions. Better stewardship of water supplies

    must begin at the local level. Local governments will need support, not unilateral across-the-board directives, from the State. State regulators should provide local governmentswith technical support and appropriate legislation to assist them in their short and long-term planning, coordination with neighboring local governments, and efforts to respondto water emergencies. The work-in-progress House Bill 2499 (Senate Bill 1879) is justthe first step. After completion of the ERCs comprehensive water allocation study, we

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    Water Scarcity and Development in

    North CarolinaPresenter: Stephen T. Parascandola

    Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.

    u y ,Note: The information reported is general in nature, and because individual circumstances differ, should not be construed as legal advice.

    2005 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

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    a er carc y

    N.C. Drou ht Mana ement Advisor Council, as of June 26,2008:

    14 counties are in Exceptional Drought

    16 counties (including Wake, Durham, Chatham and Orange

    Counties) are in Severe Drought

    2005 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

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    2008 State Legislation

    House Bill 2499 Drought Bill Passed on July 18, 2008. a n purpose o : ropose ru es or wa er use ur ng u ure roug s.

    Requires local governments to impose minimum State water conservationstandards.

    order water systems to share excess water.

    2005 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

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    Study

    Comprehensive water allocation study by N.C. Institute of

    Government and Duke Universit .

    Preliminary report: NC water management is a complex,

    un-integrated social-ecological system."

    Final water allocation study report will be presented toERC in 2009.

    2005 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

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    , .

    Statutory Requirements to Adopt Temporary Moratorium.

    Kanna olis Chatham Count and Southern Pines

    Examples.

    2005 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

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    No Shortage of

    rea ve o u ons

    Local Government Conservation Efforts. Mandatory Restrictions.

    - Tiered Rates for Pricing Water.

    - Rebates for Water-Saving Devices. - Educational Programs -- Get a Conservation Mascot!

    2005 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.

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    No Shortage

    o reat veSolutions (cont.)

    Expanding Reuse or Reclaimed Water Systems.

    Sustainable and Green Building Development.

    Conservation Incentives. Salt Water Desalination.

    2005 SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.