Gilroy Municipal Code § 27.78 Underuse

If a parcel’s daily water use, as determined by the city pursuant to section 27.78-1(b), is consistently less than the daily water use allocation, the city may provide the parcel owner written notification of such underuse. The parcel owner may offer to sell the excess allocation back to the city at the price originally paid for such allocation or, except as set forth in section 28.78-1, retain that amount for growth or expansion. The city shall have no obligation, however, to purchase such excess allocation from the parcel owner.

(Ord. No. 86-16, § 1, 9-15-1986; Ord. No. 2009-01, § I, 3-2-2009)

(a) Notwithstanding the provisions of section 27.78, no earlier than ninety (90) days and no later than one (1) year after the city’s mailing of a notification of underuse as set forth in section 27.78, the city shall be entitled, in its discretion, to rescind all or a part of the daily water use allocation to a parcel if the parcel’s daily water use is consistently underused as further set forth in subsection (b) of this section. Any such rescission shall be in writing and accomplished in the manner set forth in subsection (c) of this section.

If the city had granted the parcel all or any part of its existing daily water use allocation at no cost (either as an existing use pursuant to section 27.76(d), through a fee waiver or otherwise), the city shall be entitled to rescind, in its discretion, such part of its daily water use allocation as was provided at no cost without repayment to the owner of the parcel on the date of such allocation. If the city rescinds any daily water use allocation for which the parcel owner was charged, the city shall pay the parcel owner the current value of the allocation as determined by the current cost for such allocation charged to parcel owners. For purposes of this section, any daily water use allocation that was granted at no cost shall be considered the first allocation that is rescinded by the city; the city shall not be required to reimburse the parcel owner for lost daily water use allocation until the amount of daily water use allocation that was granted at no cost has been fully rescinded.

(b) For purposes of this section, a parcel’s daily water use allocation shall be considered consistently underused if the average daily water use by such parcel in the thirty-six (36) billing periods prior to the notice of rescission is below the existing allocation. The daily water use allocation shall be determined as set forth in section 27.76-1.

(c) The city shall provide a parcel owner with notice of rescission of any portion of such owner’s daily water use allocation, in writing, at the address of the parcel owner set forth in Santa Clara County tax records, unless the city has been provided with written notification of a more current address. Rescission of any portion of a parcel owner’s daily water use allocation shall take effect no earlier than sixty (60) days after the date of such notice.

(d) If a parcel owner appeals the determination of underuse pursuant to section 27.76-2 and shows, to the reasonable satisfaction of the city engineer (or his/her designee), that underuse has occurred for reasons not reasonably within the parcel owner’s control, the city shall suspend its right to rescind the parcel owner’s allocation for no fewer than twelve (12) additional billing periods. If, at the end of such suspension, the parcel continues to underutilize the allocation, those portions of the allocation not being used by the parcel may be rescinded by the city. In the event that rescission of the parcel’s daily water use allocation has been delayed due to such suspension, the amount the city shall pay to the parcel owner in compensation for its rescinded daily water use allocation shall be the amount that would have been paid at the time the city first informed the parcel owner of its underuse.

(e) If the city finds that a parcel owner has used water specifically to retain its daily water use allocation and not for any other purpose necessitated by lawful commercial or industrial activities on the parcel, the city may also rescind a daily water use allocation following notice to a parcel owner as further set forth in subsection (c) of this section and, thereafter, disconnect such service at the city’s discretion.

(Ord. No. 2009-01, § I, 3-2-2009)