Del Mar City Council
June 5, 2023

EXHIBIT “C”

DESCRIPTION OF SERVICES
SCHEDULE 1
Workers’ Compensation Claims Management Services
Terms and Conditions
I. DESCRIPTION OF WORKERS’ COMPENSATION CLAIMS MANAGEMENT

SERVICES
(a) Customer shall promptly notify CorVel of all incidents subject to the services described in this Agreement.
(b) First report of loss services involve gathering pertinent information related to a work injury and reporting such information to the appropriate state industrial accident board or commission as required by law, and is used to facilitate CorVel’s initial review of the claim to determine whether the claim is likely to be medicalonly or lost time and to help guide the initial determination of Services that may be required (“First Report Services”).
(c) CorVel’s Workers’ Compensation Claims Management services provide Customer with a process to comply with Customer’s workers’ compensation issues in the applicable jurisdiction. CorVel shall provide workers’ compensation claims management services set forth herein to Customer on behalf of employees that sustain work related injuries (“Injured Employees”). CorVel may subcontract with a third party to provide some portion or all of its claims management services obligations hereunder.

II. DELIVERY OF FIRST REPORT OF LOSS SERVICES
(a) CorVel shall provide First Report Services to Customer upon receipt by CorVel of specific requests from Customer. Prior to the implementation of CorVel First Report Services and as required during the Term of this Agreement, Customer may provide CorVel with instructions regarding the scope and extent of the First Report to be performed by CorVel. Absent such instruction, CorVel First Report Services shall be performed as described below.
(b) Customer shall initiate First Report Services by (i) entering such information online through CareMC, (ii) calling CorVel via a toll free number provided by CorVel, or (iii) faxing such information to the CorVel intake specialist. Customer or the Customer representative entering such information on CareMC, making such calls, or faxing such information shall provide CorVel with all information required to complete the First Report of Loss form required by the applicable state (“Required Information”). Required Information generally includes the following:
name/address of claimant, date of incident, description of injuries, social security number, date of birth, employer, salary, and other descriptive information reasonably required by CorVel, and may include information required by applicable statute (e.g., employer TIN). CorVel shall (i) provide sufficient staff to handle all incoming calls, and (ii) be prepared to complete First Report of Loss forms for all applicable states.
(c) Once the Required Information is validated and confirmed by a CorVel representative, First Report of Loss forms will be made available to Customer through the CareMC Application. CorVel will, upon request of Customer, provide a hard copy of the completed First Report of Loss form to the Customer. An electronic copy shall be available to Customer via CareMC. To the extent permitted by the applicable state industrial accident board or commission, the 22 June 5, 2023 Item 09
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Required Information shall be transmitted electronically. (d) To the extent required by applicable statute or otherwise agreed in writing by CorVel, CorVel will file additional reports on earlier-filed First Reports of Loss (“Subsequent Reports”).
(e) Unless agreed to otherwise in writing by the parties, any questions or concerns from an industrial accident board or commission concerning First Reports of Loss forms completed by CorVel hereunder will be handled directly by CorVel. All such inquiries will receive an initial response within the next business day following CorVel’s receipt of the inquiry. CorVel will keep Customer apprised of any inquiries it receives and the response thereto. CorVel will send a written response to the inquiry within five (5) business days outlining the nature of the inquiry and the resolution of same by CorVel. A copy of such response will also be sent to the attention of the designated Customer representative if requested in writing by Customer. Customer shall have the right, but not the obligation, at any time and at Customer’s expense, to interject itself into the inquiry between CorVel and the industrial accident board or commission, and in connection therewith to resolve the inquiry in a manner acceptable to Customer at its sole discretion, in which case Customer shall defend, indemnify and hold harmless CorVel from and against any claim, liability, damages or costs arising from Customer’s handling of such inquiry or the resolution thereof.

III. DELIVERY OF CLAIMS MANAGEMENT SERVICES
(a) Customer shall arrange so that all claims and all related bills of any type, as well as all other correspondence that Customer receives relating to such claims, are sent directly to CorVel. CorVel shall perform all of the following “Claims Services” in connection with each portion of a Claim related to Workers’ Compensation benefit payments shall be defined as:

Claims requiring work beyond the standard scope for each claim type will be invoiced at the next higher rate. The following section indicates the basis for the categorization of claims fees. You will be provided with reports that provide full transparency of the fees invoiced.
• Record Only – system notation of an event that does not require any claims handling, including contact or investigation. These are used solely for the purpose of record keeping.
• Medical Only – claims where time-off does not exceed the state waiting period and the scope of work is within the parameters noted in the Pricing section (“Fees”), Exhibit B.
• Indemnity – claims not otherwise classified as either Record Only or Medical Only.

All Claims Services provided by CorVel under this Agreement shall be performed in accordance with the guidelines set forth in Sections II-IV of this Exhibit A:
(i) CorVel shall immediately assign each new Indemnity Claim and Medical Only Claim to CorVel’s designated claims professional.
(ii) Utilizing CorVel’s CareMC Application or other applicable CorVel Online System, CorVel shall maintain a chronological record of all Claims Services performed by CorVel.
(iii) CorVel shall make all filings related to Indemnity Claims and Medical Only Claims with the appropriate state Workers’ Compensation regulatory authorities.
(iv) CorVel shall maintain a complete and accurate claim file for each Indemnity 23 June 5, 2023 Item 09
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Claim and Medical Only Claim.
(v) CorVel shall perform reasonable and necessary administrative and clerical work including, without limitation, the following:
(A) Investigate all Indemnity Claims and Medical Only Claims. (B) Determine and evaluate any coverage and/or compensability issues and provide Customer with appropriate recommendations and advice regarding the same.
(C) Adjust, handle, or settle to a conclusion those Indemnity Claims and Medical Only Claims that CorVel believes the Customer is legally obligated to pay under applicable state law and regulations, and in accordance with the authority granted to CorVel by Customer under the Agreement.
(D) Prepare checks for payments of Indemnity claims, Medical Only Claims and Allocated Loss Adjustment Expenses.
(E) Prepare documents as necessary to close out Indemnity Claims and Medical Only Claims.
(b) CorVel shall process claims and process the disbursement of benefit payments to claimants and providers entitled to such payments from Customer. Funding for the payment of all benefits to claimants, providers, vendors and “allocated loss adjustment expenses” (as defined below) is the sole responsibility of Customer and Customer agrees to be liable for and fund all proper claims processed by CorVel. Such payment shall be made through a bank account established by CorVel. There shall be one account established for new claims relating to both First Reports of Loss arising on July 1, 2023 and tail claims arising before August 1, 2023 (the “bank account”). CorVel shall provide Customer with a check register in a mutually agreed format for each check run drawn on a bank account prior to mailing of the checks. CorVel also will provide Customer information as necessary for Customer to prepare periodic bank account reconciliation reports. Customer agrees to pay into the bank account funds sufficient to pay approved claims and to maintain the advance deposit set forth below and to provide CorVel with such authorizations as shall be necessary to make the required instruments valid claims against Customer. Notwithstanding the other provisions of this Agreement, if payments are not made when due, Customer shall be in default and subject to immediate termination without notice, and CorVel shall have no liability for claims, penalties or other damages arising out of or relating to any such failures on the part of Customer.
(i) Both parties shall mutually agree to the funded amount through the special handling instructions. CorVel shall not be responsible to fund the bank account nor be responsible for any penalties, fees, costs or damages arising from the Zero funded account not being properly funded by Customer.
(ii) Allocated loss adjustment expenses (“ALAE”) generally encompasses costs which can be directly allocated to a particular claim. As used herein, that term shall include, but not necessarily be limited to, the following: claim adjustment costs and expenses incurred by CorVel or its subcontractor and allocated by CorVel to the investigation, adjustment and settlement or defense of a claim for benefits, including, without limitation, attorneys’ fees and disbursements; pre- and post- judgment interest; court reporter services and transcripts; deposition charges and transcripts; fees for 24 June 5, 2023 Item 09
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service of process or summons; court costs; courier/express mail; appeal bonds and filing fees; travel, printing costs related to trials and appeals; witness and expert fees and expense; alternate dispute resolution fees and expense; mediation fees and expense; arbitration fees and expense; ombudsman fees and expense; medical examinations and reviews to determine issues such as causal connection, length or extent of disability, degree of permanency, and other issues related to determining liability of the Customer; laboratory costs; engineering fees and expense; autopsy fees and expense; independent adjuster and private investigator fees and expense; surveillance and activity checks; photography; fees and expense related to the defense of controverted or litigated claims, including subrogation recovery; medical cost containment expense including, but not limited to, medical bill auditing expenses, hospital and other treatment utilization reviews, including precertification/preadmission and concurrent or retrospective reviews; peer reviews; preferred medical provider network or similar organization expenses; medical fee review panel expense; pharmacy benefit management expense; drug testing expense; indexing fees; expense and fees related to Medicare set aside agreements; vocational rehabilitation or return to work expense; telephonic and field medical case management expense; fees and expense for reproduction of medical and/or hospital records; fees for police reports, birth certificates, death certificates, OSHA reports and other similar regulatory authority reports; copying fees assessed by a vendor other than TPA; translation services; legal bill audit expenses; other costs and expenses reasonably incurred and related to the investigation and defense of claims or the protection and collection of subrogation rights of the Customer; and other expenses that are not defined as losses and are directly related to and directly allocated to the handling of a particular claim for services that are required to be performed by statute or regulation. Unless expressly stated as a separate fee or otherwise included within Corvel’s service fees, each of the above ALAE items is subject to reimbursement at the rate charged. (c) CorVel shall provide Customer with payment services through Check Writing services in accordance with specifications mutually agreed by Customer and CorVel.
(i) The checks referred to in Section II (d) will be drawn on CorVel’s account at Wells Fargo Bank, Portland, Oregon or CorVel’s account at such other bank as the parties of this Agreement may mutually accept, as evidenced by a letter or written document signed by both parties (hereafter, the “Bank”), with Customer identified on each check as the insurer or any insurance carrier as such may be required. Check Writing services shall also include IRS form 1099 filing and associated follow-up, bank reconciliation, and bank fees specifically related to such processing if Customer is using CorVel’s bank account. Otherwise, such services will be subject to an additional fee.
(d) CorVel agrees to provide the following services to Customer relating to the processing and payment of claims:
(i) to receive claims and process payment of benefits in accordance with applicable State(s) program guidelines required for the payment of workers’ compensation claims;
(ii) to correspond with the claimants, providers of services and vendors if additional information is deemed necessary to complete the processing of 25 June 5, 2023 Item 09
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claims;
(iii) to determine the amount of benefits payable;
(iv) to provide notice to claimants as to the reason(s) for denial of benefits (when such are denied) and to provide for the review of such denied claims; (v) to receive and process for payment claims for benefits incurred prior to the Effective Date in consideration for the separate fees established in Exhibit B; and
(vi) at Customer’s request, to provide specified additional services for such fees as the parties mutually agree;
(e) Subject to applicable law, all claims files, data, systems and records and associated documents and notices regarding the administration of claims and provision of services pursuant to this Agreement and the payment of claims and allocated loss adjustment expenses, may be audited, examined, and copied by Customer, its representatives, excess carriers, reinsurers or any state insurance department or other regulatory body that so requires, at Customer’s expense, at any time or times during CorVel’s normal business hours and with not less than thirty (30) days advance notice; and notwithstanding anything to the contrary contained in this Agreement.
(f) CorVel is and shall remain an independent contractor with respect to the services being performed hereunder and shall not for any purpose be deemed an employee of Customer, nor shall CorVel and Customer be deemed partners, joint venturers or governed by any legal relationship other than that of independent contractor as set forth herein. CorVel does not assume any responsibility for the adequacy of the funding of benefits or any act or omission or breach of duty by Customer. (g) CorVel is not in any way to be deemed an insurer, underwriter or guarantor with respect to any benefits payable under Customer’s workers’ compensation program.
(h) CorVel may rely on instructions received from such person or persons as Customer may from time to time designate in writing, provided that no such instruction may vary the terms of this Agreement.
(i) Unless otherwise directed by Customer or precluded by law, CorVel shall seek subrogation recoveries on behalf of Customer and shall provide Customer with any recoveries obtained, minus the attorneys’ fees and costs incurred in obtaining such recoveries. Customer represents and warrants that its workers’ compensation program provides for rights of subrogation. Customer delegates and/or assigns these subrogation rights and third party recovery rights to CorVel as its agent for purposes of subrogation only. Customer shall assist CorVel in its subrogation efforts by providing requested information and documentation. CorVel may engage the services of a subrogation management firm to assist with the identification and management of subrogation cases. The fees charged by the subrogation management firm will be deducted from any recovery. In those cases where the subrogation recovery efforts of the claimant’s attorney should be compensated, Customer delegates to CorVel full authority to act on behalf of the Customer to negotiate reasonable attorneys’ fees. In those instances where Customer’s subrogation lien, in the opinion of CorVel, should be compromised or abandoned, Customer delegates to CorVel full authority to act on behalf of Customer to compromise or abandon the lien. Any determination by CorVel with respect to subrogation liens shall be final and conclusive, unless overturned by order of a limited arbitrary and capricious standard of review. 26 June 5, 2023 Item 09
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(j) CorVel shall consult and cooperate with Customer with respect to any loss or claim resulting in a lawsuit being instituted against Customer. Nothing in this paragraph shall be construed in any way as a waiver by CorVel of any attorney/client, work product or other applicable privilege with respect to any materials or documents prepared by CorVel or its counsel in anticipation of litigation. (k) CorVel shall assist, cooperate and participate with Customer, carriers and reinsurers in connection with claim reviews and audits and catastrophic injury claim analysis and excess claim related reporting.

IV. SERVICE CRITERIA, STANDARDS AND GUIDELINES
(a) Assignments: Customer will notify CorVel, either via CareMC, telephone or facsimile, that Customer’s employee has sustained a work related injury. All new Lost Time claims will be acknowledged and established by CorVel within the next business day following such notice. The acknowledgement will included the name and contact information of the assigned Adjuster.
(b) Contacts: As warranted, and always with regard to lost time, or anticipated lost time claim situations, initial contact with the injured employee will be made within the next business day following receipt of a new assignment claim. Contact with the Physician, and employer, if required will be made by the next business day. (c) Investigation: Completed and documented within 30 days from date of assignment.

V. INVESTIGATIVE SERVICES
(a) CorVel shall provide investigative services (“Special Investigative Unit” (“SIU”) via an outside panel through CorVel’s third party vendor providing such SIU services to include, but not limited to:
(i) Receipt and examination of all reports of accidents, incidents, and claims cases which are or may be the subject of such liability claims; (ii) Investigation of such accidents, incidents, claims or cases where examination warrants such investigation to include on-site investigation, photographs, statements of clients, claimants and witnesses, evaluation and determination of losses, and other such investigative services necessary to determine liability and losses, but not to include extraordinary investigative services as set forth in Section b(iii) below; (iii) Timely and periodic reporting to the Customer of the in-progress investigation efforts and the results of the investigations, as well as offering recommendations to the Customer of extraordinary investigative services, if required;
(iv) All reporting must be made via CorVel’s third party vendor’s proprietary portal (“Portal”) for any SIU services to ensure full compliance. Customer shall direct assignment outside of Portal for any services or activities all fines or penalties for such action are the sole responsibility of the Customer.
(v) All compliance processes for SIU with the carrier or applicable state is completed by CorVel’s third party vendor where required. If Customer directs assignment outside of CorVel’s third party vendor for any compliance services or activities all fines or penalties for such action shall be the sole responsibility of the Customer.
(b) To the extent extraordinary investigative services are required:
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(i) Customer agrees to pay the cost of all reasonable and supportable extraordinary investigative services such as, but not limited to, service performed by other adjusting and/or investigating companies, professional photographs, independent medical examinations, professional engineering services, laboratory services and legal services. CorVel shall order such extraordinary investigative services only with prior written authorization from the Customer. To the extent circumstances do not permit prior written authorization from the Customer, CorVel shall obtain verbal authorization from the Customer to proceed with the recommended extraordinary investigative services and CorVel shall promptly confirm in writing the verbal authorization provided by the Customer.
(c) If Customer utilizes its own third party vendor or internally provides SIU Services, Customer shall be fully responsible and liable for any Losses which arise as a result of such services being provided outside of CorVel. Customer shall indemnify, defend and hold harmless CorVel from and third party claims brought against Customer from such Losses.

SCHEDULE 2
Case Management Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Case management services are provided to manage a claimant’s case in order to identify the most appropriate rehabilitative treatment and/or most cost-effective health care alternatives (“Case Management Services”). Case managers may confer with the adjuster, attending physician, other medical providers, employer(s), attorney(s), the patient and the patient’s family.
(b) In certain states if requested by Customer, Case Management Services may include vocational rehabilitation services.

2. DELIVERY OF SERVICES
(a) CorVel shall provide Case Management Services to Customer upon receipt by CorVel of specific requests from Customer as mutually agreed by both parties under the special handling instructions.
(b) Telephonic Case Management: Telephonic case management (“TCM”) includes a fourpoint contact with claimant, employer, claims professional and provider. CorVel case managers (“CMs”) do the following: (i) facilitate communication among all appropriate parties regarding the diagnosis, prognosis and treatment plan provided by claimant’s treating physician, (ii) channel or direct claimant to a PPO Network provider as appropriate, (iii) monitor and facilitate treatment planning, (iv) coordinate early return to work, and (v) subsequently provide periodic assessments of treatment and return to work plans. CMs may recommend additional services or coordinate claim closure, as appropriate.
(c) Medical/Field Case Management: CorVel’s medical/field case management (“MCM”) personnel perform field based case management services as directed by the employer and/or Authorized TPA which may include on-site contact with claimant, employer, and provider, as well as telephonic communication with the claims professional. MCM’s provide the CM services set forth in Section A above.
(d) Vocational Case Management: Vocational case management services may include the following: (i) coordinating return to work, (ii) providing job analysis, (iii) assisting with job 28 June 5, 2023 Item 09
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placement, (iv) providing expert testimony, (v) assisting with job development, (vi) providing job analysis of essential and non-essential duties for employers under the American’s With Disabilities Act, (vii) providing vocational testimony, (viii) providing advice regarding job seeking skills, and (ix) providing transferable skills analysis. (e) Utilization Review:
(i) CorVel’s utilization management program reviews proposed inpatient hospital admissions and ambulatory care to determine the appropriateness, frequency, length of stay, and setting for such proposed treatment. In addition, CorVel can monitor and assess the appropriate utilization of treatment for all orthopedic and soft tissue injuries requiring ambulatory diagnostics and treatment.
(ii) In California, certain medical diagnostics, treatments and durable medical equipment can be approved at the claims professional level. Utilizing the Adjuster Only Approval letter allows the claim specialist to expedite medically necessary care, meet California Division of Workers’ Compensation (DWC) regulations and Senate Bill 1160 that requires all treatment determinations are included in a database reportable to the DWC. This process is completed by CorVel’s California Utilization Management departments.
(iii) CorVel nurses make recommendations to the claims adjuster based on nationally accepted medical guidelines, including Optimed Managed Care System, a clinical protocol software; the American College of Occupational and Environmental Medicine (ACOEM) Occupational Medicine Practice Guidelines: Evaluation and Management of Common Health Problems and Functional Recovery in Workers; other nationally accepted treatment practice guidelines, as well as any state mandated treatment guidelines.
(iv) Any nurse recommendations for limitation or denial of care based on lack of medical necessity are reviewed by a CorVel Physician Advisor. The Physician Advisor makes a final recommendation to the claims adjuster to approve or deny. If a final recommendation is made to deny treatment, the treating physician is notified in writing of the decision and the appeals process.
(f) Critical Incident Stress Debriefing Services (“CISD”):

CorVel shall provide its Critical Incident Stress Debriefing Services (“CISD”) to Customer.

CISD is a core component of Critical Incident Stress Management. CISD is group and/or individual onsite or virtual meetings with employees who have witnessed or been subjected to a traumatic incident at work. CISD allows for employee ventilation, reassurance, education, continued productivity and stability. The goal of CISD is to mitigate the impact of the critical incident, accelerate employee recovery and facilitate identification of individuals who may benefit from additional services. Indicators for CISD include but are not limited to violence (burglary, assault, rape), motor vehicle accident, amputations, electrical shock, crushing injuries, machine injuries, thermal or chemical burns, witnessed fatality, weather-related incidents. Group and/or individual meetings are led by a CorVel case manager certified in CISD.

3. PROFESSIONAL FEE
(a) CorVel’s case management nurses and vocational rehabilitation counselors are required to be licensed in the jurisdictions they provide patient care or counseling. CorVel’s case managers may provide care in multiple jurisdictions. Such case managers are required to maintain multiple state licenses and corresponding continuing education credits in maintaining these licenses. Additionally, CorVel’s case managers are required to utilize up to date nationally recognized treatment guidelines, including American College of 29 June 5, 2023 Item 09
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Occupational and Environmental Medicine (ACOEM), Official Disability Guidelines (ODG) and the MDGuidelines. An incremental professional fee as described hereunder in Exhibit B (“Fees”) shall be invoiced to Customer for the substantial costs associated with obtaining and maintaining the national guidelines for CorVel’s case management nurses. Such professional fee allows CorVel to maintain the applicable licenses and certifications for CorVel’s case managers as well as keeping appropriate treatment guidelines up to date.

SCHEDULE 2-A
Care Advocacy Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Care Advocate nurse service (“Care Advocate nurse”) are provided following the work injury to guide the claimant’s injury recovery, up to 30 days following injury. The Care Advocate nurses oversee clinical assessment of the injury severity, validate/secure medical information, act as patient advocates and sets expectations for medical care and return to work. They identify the most appropriate treatment and/or most cost-effective health care alternatives. Care Advocate nurses may confer with the adjuster, attending physician, other medical providers, employer(s), attorney(s), the patient and the patient’s family.

2. DELIVERY OF SERVICES
(a) CorVel shall provide Care Advocate Services for those cases that meet the established Care Advocate referral criteria.
(b) Care Advocate nurse service: Care Advocate nurse service includes a three-point contact with claimant, provider and employer, or a two-point contact with claimant and provider as mutually agreed upon with the customer. Information obtained from the claimant, provider and employer will be provided to the adjuster. CorVel care advocates do the following: (i) facilitate communication among all appropriate parties regarding the diagnosis, prognosis and treatment plan provided by claimant’s treating physician, (ii) channel or direct claimant to a PPO Network provider as appropriate, (iii) monitor and facilitate treatment planning, (iv) coordinate early return to work, and (v) subsequently provide periodic assessments of treatment and return to work plans up to 30 days following the work injury. Care Advocates may recommend additional services or coordinate claim closure, as appropriate. (c) Care Advocate nurses are responsible for completing detailed documentation within CareMC focusing on the claimant’s medical condition, treatment plan and return to work status. Documentation includes but is not limited to primary injury diagnosis, comorbidities, treatment plan, medical goals, obstacles to recovery, work status and return to work. (d) Care Advocate nurses assess appropriate medical follow-up, work closely with the claim team to identify potential barriers to recovery that may require further follow-up or additional services and develop medical action plans to ensure timely recovery and restoration of function, advocating for the injured worker and consulting with the claim team.

SCHEDULE 3
Bill Audit, Review and Payment Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
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(a) CorVel’s proprietary bill review program enables an application of the appropriate Standard Fee Schedules or usual and customary values, includes PPO, Technical and Clinical Review, and CERiS, applied to provider bills.

2. DEFINITIONS
Bill (per Bill): Each transaction of a bill is considered a separate per bill count. CorVel is able to logically link transactions across logical sequences, but each is its own bill transaction.

Clean/Prepared Bill: When the provider charges are deemed to be an accurate reflection of the services rendered based on the provider’s documentation. Network Solutions savings such as Clinical Review and Technical Evaluation and other review types can be applied first to the bill for the bill to qualify for the Prepared Bill status. Once at the prepared bill state Standard Fee Schedule savings can be applied.

Clinical Review: An additional level of review performed by nurses, system, or coding experts to evaluate appropriateness, relatedness of submitted charges with provided documentation.

Implant Analysis: Review of implant charges submitted to a proprietary pricing database and documentation. Implant Analysis results are included as part of Clinical Review.

Line Item Bill Review (LIBR):

Out of Network Line Item Bill Review:
· Original charge data
· U&C review by zip code
· Fee re-bundling and error removal
· Separation of charges by diagnosis/procedure
· Facility to facility cost comparison
· Individual facility chargemaster analysis and price trending Fair and Reasonable - Universal Chargemaster: The Universal Chargemaster is a compilation of individual hospital line item descriptions from over 85% of the nation’s hospitals. It is a virtual thesaurus of hospital billing terms, codes and abbreviations.

Specific, unique line item descriptions are defined by the Universal Chargemaster and appropriately compared to the same service or supply for other hospitals in the same geographical area.

Minimum Transaction Fee (MTF): For each bill transaction if the fees on a bill transaction instance do not meet the minimum transaction fee amount, the difference between the fees and the min transaction fee will be automatically added to the fees.

Negotiations: A one time or ongoing agreement with the provider to accept a specific payment amount.

PPO Network Access: A preferred provider organization (PPO) is a medical care arrangement in which medical professionals and facilities provide services at a 31 June 5, 2023 Item 09
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negotiated/contracted rate. PPO medical and healthcare providers are called preferred providers.

Provider Sendback: Sendbacks occuring when a bill instance does not have enough supporting information from the provider to be a Prepared Bill. The bill is sent back to the provider requesting further information.

Standard Fee Schedule: Savings defined as the amount reduced from the Prepared Bill status to the jurisdictional state fee schedule amounts when those amounts are expressly assigned a specific value, not through reference methodologies developed by a third party or federal agency.

Substantive Denials: Sendbacks occur when a bill instance does not have enough supporting information from the provider to be a Prepared Bill. The bill is sent back to the provider requesting further information. If the provider does not provide the necessary supporting information after 90 days of the sendback status all bill savings will be considered Substantive Denial Savings and charged accordingly through an automatic bill instance. If the bill is later submitted through another bill instance with further information from the provider, another review will occur which may reverse all or part of the Substantive Denial savings and fees.

Technical Evaluation: Applicable to bills when reimbursement is not fully addressed in the jurisdictional fee schedule. State regulations may require payment to be made in accordance with payment methodologies developed by a third party (typically the Centers for Medicare and Medicaid Services (CMS)), often with exceptions or special exemptions added by the state.

UCR: “UCR” is defined as :
· Usual – A charge is considered “Usual” if it is the fee that most providers in the area charge for the same service.
· Customary – A charge is considered “Customary” if it is within the range of fees that most providers who practice in the area charge.
· Reasonable – A charge is considered “Reasonable” if it is both usual and customary or if it is justified by the Payor because of complexity. Payor, CorVel or its designees use a nationally recognized third party database for UCR charges.

In determining UCR prevailing rates, Payors, CorVel or their designees use either (a) CorVel’s Enhanced Bill Review database or other nationally recognized databases to provide benchmarks for hospital charges in a hospital Health Care Provider’s geographic area and (b) databases provided by FAIR Health, Inc. or other nationally recognized databases to provide benchmarks for charges by non-hospital Health Care Providers in the applicable geographic area. The UCR prevailing rate is the 80th percentile of the relevant database benchmark for the fees and charges in Provider’s geographic area.

2. DELIVERY OF SERVICES
(a) Customer’s Obligations
(i) During the term of this Agreement, unless agreed to otherwise by the parties in writing, Customer shall utilize CorVel exclusively for audit, review and repricing services for Bills related to workers’ compensation claims. A breach of the foregoing obligation shall constitute a material breach under this Agreement. Without limiting any other remedies available under law, a breach of the foregoing obligation with respect to PPO 32 June 5, 2023 Item 09
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(as defined in Schedule 7) Provider Bills will result in immediate termination of all PPO discounts provided by CorVel.
(b) CorVel’s Obligations
(i) CorVel shall provide Bill Review Services described herein to Customer upon receipt of specific requests from Customer. In the absence of instructions from Customer to the contrary, which CorVel must approve, Bill Review Services shall be performed as described herein.
(ii) Bill Review Services shall be completed within a reasonable period of time of CorVel’s receipt by CorVel of all necessary billing information from Customer (“Complete Billing Information”).
(iii) To facilitate timely processing CorVel shall process (A) each Provider Bill within a reasonable period of time and within industry standards after CorVel’s receipt thereof, and (B) batches of Provider Bills on a daily basis or as volume dictates. (iv) CorVel shall process PPO Provider reimbursements on behalf of Customer industry standards from receipt of the corresponding Bill Review Audit analysis from CorVel. (v) CorVel will be responsible for monitoring, “flagging” and returning to Customer duplicate copies of a Bill (“Duplicates”).
(vi) Any conflicts or complaints from medical providers (“Complaints”) concerning Bill Review Services completed by CorVel initially will be handled directly by CorVel.

CorVel will provide an initial response to a Complaint and will send a written response to the complainant that summarizes the nature of the Complaint and the steps CorVel has taken to resolve it. Customer may be asked to interject itself into a Complaint between CorVel and a medical provider to resolve the Complaint in a manner acceptable to Customer and as needed by CorVel. Notwithstanding the foregoing, Customer shall retain full responsibility for payment of all benefits and any other expenses or services required to be paid or provided under applicable policies or state and federal workers’ compensation laws.
(vii) CorVel agrees to supply Customer in the CorVel’s standard format a transmission reflecting the results of the Bill Review Services provided hereunder. (c) Savings for the Fee schedule or usual and customary service shall be:
(i) for states having a Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the billed amount resulting from the allowance based on specified conversion factor(s) multiplied by referenced value(s). (ii) for states not having a state mandated Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from UCR. (d) Scanning Services
(i) CorVel will provide Scanning Services and, when appropriate, Optical Character Recognition (“OCR”) Services. CorVel will timely and within industry standards, scan all bills and attached medical notes delivered to CorVel necessary for providing Bill Review services. Subject to applicable law and obtaining any required authorizations, CorVel also shall provide Scanning Services for additional claim-related documentation.
(ii) All material scanned by CorVel hereunder shall be accessible to Customer through CareMC.
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SCHEDULE 3-A
Clinical and Technical Assessment Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Clinical and Technical Assessment Services. CorVel provides this service to evaluate state specific complex rules and verify coding by providers when appropriate and supported by documentation. This can include clinical review to validate coding is correct for all applicable Provider bills, Ambulatory Surgical Center bills, and all Hospital bills (inpatient and outpatient) including:
(i) review and analysis of codes, charges, and billing structure for incorrect coding, incorrect billing, bundling, and up-coding of procedures which affect Standard Fee Schedule values;
(ii) review of bills, records, and documentation by a nurse and/or by a coder; (iii) separation of charges not related to the compensable injury; (iv) review and apply complex state specific rules;
(v) application of utilization review determinations and clinical edits; (vi) diagnostic related group validation (i.e., verification that the diagnostic related group billed is appropriate for the services rendered); and
(vii) cost shifting of revenue and CPT codes.

2. DELIVERY OF SERVICES
(a) CorVel will timely and within industry standards, complete Review Services and return the reviewed Bills to Customer, with any adjustments to identified overcharges. (b) Savings for the Review Services shall be:
(i) for states having a state mandated Standard Fee Schedule: (A) the bill amount in the Fee Schedule; less (B) the bill amount resulting from the nurse review services. (ii) for states not having a state mandated Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the nurse review services.
(iii) for states having a state mandated Standard Fee schedule (A) the medical provider’s original bill amount; less (B) the bill amount resulting from technical review services. (iv) for states not having a state mandated Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the technical review services.
(v) CorVel shall pay bills on behalf of Customer for bills reviewed by CorVel in a timely manner in accordance with all state guidelines, and Customer agrees to waive any secondary third party bill reviews and/or other retrospective reviews regarding all bills for which CorVel has secured a reduction from the original billed charges. (vi) If a medical provider submits an appeal, the bill will be reviewed again and, if any adjustment is necessary, CorVel will provide that information on the Explanation of Review (EOR).
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SCHEDULE 3-B
CERiS
(Hospital Bill Itemization Review Services; Negotiation Services; Implant Cost Review Service)
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Hospital Line Itemization Review Services. (CERiS) performs its Services on Hospital Bills (inpatient and outpatient) and consist of procurement of actual bill itemization, (i) a line-by-line validation and comparison of the itemization description charges actually billed by a particular hospital to what CMS billing guidelines allow to be separately billed for in order to disallow inappropriate charges, and then will compare the valid itemization descriptions to the average itemization description charges utilized by other hospitals within a pre-designated geographic area, and (ii) a review of charges that fall outside of any pre-contracted discounts or fee schedules, and generates payment recommendations in accordance with the Customer’s “Payors Allowable” language. This service does not itself include negotiation services nor Implant Cost Services. (b) Negotiation Services. (CERiS) will provide negotiation services with respect to all Hospital Bills (inpatient and outpatient). CorVel will contact the provider for agreement of the negotiated rate. A signed agreement regarding such rates will be maintained by CorVel.

CorVel will use its commercially reasonable efforts to enter into an agreement regarding negotiated rates in accordance with a mutually agreed upon schedule. (c) Implant Cost Review Service. (CERiS) includes Implant Cost Review services with respect to the applicability of the Customer’s “Payors Allowable” plan or policy language that specifically addresses implant payments. CorVel will identify and provide the manufacturers implant cost through its proprietary repository of national implant invoice data. CorVel then determines the recommended payment in accordance with the Customer’s “Payors Allowable”. In the event there is insufficient implant invoice data for the requested implant, CorVel will notify the Customer and CorVel shall not be responsible for any costs, fees, damages or penalties for any such inability of CorVel to produce a cost savings per Customer’s request.

2. DELIVERY OF SERVICES
(a) When applicable CorVel will timely within industry standards, complete CERiS Services and return the reviewed Hospital Bills to Customer, together with a written summary of any adjustments to identified overcharges.
(b) Savings for the CERiS Services shall be:
(i) for states having a state mandated Fee Schedule: (A) the bill amount in the Fee Schedule; less (B) the bill amount resulting from CERiS Services. (ii) for states not having a state mandated Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the CERiS Services. (iii) CorVel shall pay bills on behalf of Customer reviewed by CorVel in a timely manner in accordance with all state guidelines, and Customer agrees to waive any secondary third party bill reviews and/or other retrospective reviews regarding all bills for which CorVel has secured a reduction from the original billed charges. (iv) CorVel will identify all bills that are not eligible for CERiS Services due to: (A) compensability; (B) a pre-negotiated rate with Customer or other previously established discount; (C) services that are “review only” due to litigation or other nonpayment issues; and (D) duplicate bills. 35 June 5, 2023 Item 09
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(c) If a medical provider questions the adjustment and/or balance bills the patient, and the claim payor notifies CorVel of such communication, CorVel will provide documentation of its findings. If the hospital provides corrective or qualifying information sufficient to alter our original adjustments, CorVel will revise its report, advise the claim payor of the new, corrected adjustment. Only in the event of a successful appeal of the reduction of the bill by the medical provider shall Customer be entitled to receive a credit for the portion of the fee previously charged for the amount of the adjustment successfully appealed.

SCHEDULE 4
Preferred Provider Network Access Services (PPO)
Terms and Conditions
I. DESCRIPTION OF SERVICES
(a) CorVel’s preferred provider organization is a network of hospitals, physicians and other providers (“Participating Providers”) that offer services at pre-negotiated Provider rates (“PPO Network”). CorVel also provides state certified preferred provider organization networks in states that maintain such networks.

II. DELIVERY OF SERVICES
(a) CorVel will provide Customer with access to its PPO Network provided it is the exclusive preferred provider organization utilized by Customer. CorVel may at any time and in its sole discretion add and/or terminate any provider to or from the PPO Network. (b) CorVel will provide Customer with a web-based directory of its PPO Network providers. (c) Customer agrees that, during the Term of this Agreement Customer will not contract directly or indirectly with Participating Providers made known to Customer under this Agreement.
(d) Customer will make reasonable effort to channel all Covered Persons to the Participating Providers as are allowed under the laws of that service area or state.

SCHEDULE 4-A
CA MPN
Custom Preferred Provider Network Access Services (Custom PPO) Terms and Conditions
I. DESCRIPTION OF SERVICES
(a) CorVel shall assist Customer in the development and management of a preferred provider networks of hospitals, physicians and other health care providers that offer services at prenegotiated rates for the exclusive use of Customer employees (“Custom PPO Networks”), through the following activities:

1. CorVel shall provide access to all providers within its Standard PPO Network to Customer and Customer employees as provided and described hereunder

2. If applicable, CorVel will make commercially reasonable efforts to recruit Customer nominated non-network providers into the Custom PPO Network subject to such medical professionals being credentialed by CorVel;

3. CorVel shall file with Customer’s assistance with the state administrative filings for the management of the Custom PPO Network, including filing of the California MPN documents for Customer’s MPN;

4. CorVel will provide the formation and management of the Custom PPO Network, including methodologies for provider network inclusion, suspension and termination provisions consistent with all applicable laws in the relevant jurisdiction. 36 June 5, 2023 Item 09
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Customer shall be responsible for all Customer Custom PPO Network determinations, including which providers should be included or excluded from its preferred provider network. Customer is also responsible for notifying CorVel which providers should be suspended or terminated from its own preferred provider network consistent with all applicable laws in the relevant jurisdiction and pursuant to CorVel’s Quality Assurance policies and procedures.

II. DELIVERY OF SERVICES
(a) CorVel shall provide Customer with access to each Custom PPO Network provided it is the exclusive preferred provider organization utilized by Customer for workers’ compensation, auto liability, and general liability claimants. CorVel may at any time and in its sole discretion terminate any provider to or from the Custom PPO Network(s).
(b) Customer agrees that, during the Term of this Agreement and for (12) twelve month period thereafter, Customer will not contract directly or indirectly with Participating Providers made known to Customer under this Agreement.
(c) Customer will make reasonable efforts to channel all Covered Persons to the Participating Providers as are allowed under the laws of that service area or state. (d) Savings for each Custom PPO Network shall be:
(i) for non-fee schedule negotiated contracts: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the contract rate. (ii) for fee schedule negotiated contracts; (A) the fee schedule amount less (B) the bill amount resulting from the contract rate.

SCHEDULE 5
CAREIQ Services
Terms and Conditions
I. DESCRIPTION OF SERVICES
CareIQ is CorVel Nationwide Ancillary Benefit Management Program. CareIQ’s network is comprised of direct provider contracts, affiliate networks and national vendor agreements. CareIQ is responsible to pay rendering providers timely for covered and approved services performed.

The CareIQ Ancillary Benefit Management Program includes; referral management and coordination, billing and invoicing, credentialed provider network management, and/or clinical oversight of treatment.

Services Included; Durable Medical Equipment, Home Healthcare, Transportation, Interpretation, Imaging and Diagnostics, Independent Medical Examinations, Age of Injury Determinations, Physical Therapy, Occupational Therapy, and other Rehabilitation and Ancillary Healthcare services.

II. PAYMENT FOR CAREIQ SERVICES
CorVel shall invoice and bill the CareIQ Services directly to the specific claims file. CorVel reserves the right to increase and amend the rates set forth herein by notifying Customer of such amendment in writing, and Customer shall, if such amendment is unacceptable, have thirty (30) days from the date said notice is received to reject such amendment by delivery of written notice of rejection to CorVel. If CorVel does not receive such notice of termination within such thirty (30) day period, the amendment to the rates shall be deemed accepted by Customer and this Agreement shall continue in full force and effect, as so amended. 37 June 5, 2023 Item 09
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SCHEDULE 6
Pharmacy Benefit Program
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) CorVel shall be the exclusive provider of a Pharmacy Program inclusive of a PBM and a Provider Network representing Participating Pharmacy Providers that are obligated upon and after identification of a participant within CorVel’s PBM to:
i. Accept a contracted rate, and
ii. Apply mandated processes and CorVel’s Formulary and Concurrent Drug Utilization Review program at point-of-service before dispensing prescribed medications.

II. DEFINITIONS.
(a) “AWP” shall mean the Average Wholesale Price for a Brand or Generic Drug Product.

CorVel bases Customer pricing off of the reported AWP value from Medi-Span and the date of service.
(b) “AWP Discount” shall mean the PBM discounts CorVel applies, per Customer’s negotiated rates, to Covered Brand and Generic Drug Products, Compound Drugs and Specialty Meds.
(c) "Brand Drug" shall mean a Covered Drug defined as a brand name drug in PBM proprietary Generic Code Conversion ("GCC") logic.
(d) “Compound Drugs” shall be systematically identified when processing through the PBM via the Formulary. Drug compounding is often regarded as the process of combining, mixing, or altering ingredients to create a medication tailored to the needs of an individual patient. Compounding includes the combining of two or more drugs. Compounded drugs are not FDA-approved.
(e) “Concurrent Drug Utilization Review” (“DUR”) shall mean the algorithm systematically applied at a Participating Pharmacy before dispensing that considers the Presenting Drug’s safety and efficacy in context with other drugs that have been dispensed. In addition, the algorithm includes applicable protocols and guidelines based on the Presenting Drug and specific claim history, such as the time period from the last fill of the same Drug.
(f) “First Fill” shall mean a prescription filled by a Participating Pharmacy for a limited supply of Covered Drugs for a claim that is not, at the time, eligible. First Fill transactions follow CorVel’s First Fill Formulary. The First Fill Formulary is for the immediate treatment of injuries, including common exposure drugs/vaccines. The pharmacy is instructed to fill any formulary prescription written by the treating physician, whether or not the claim is accepted as a workers' compensation claim. Most claims are ultimately accepted. (g) “Formulary” shall mean CorVel’s Workers’ Compensation Standard or state specific drug/drug class and brand/generic specific triggers systematically applied at a Participating Pharmacy before dispensing a Presenting Drug that prompts the pharmacy through its adjudication system to either: dispense the Presenting Drug, convert from brand to generic, attain approval to dispense,.
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(h) "Generic Drug" shall mean a Covered Drug, whether identified by its chemical, proprietary, or non-proprietary name, that (i) is accepted by the FDA as therapeutically equivalent and interchangeable with drugs having an identical amount of the same active ingredient; and (ii) defined as a generic drug in PBM proprietary Generic Code Conversion ("GCC") logic. In the adjudication process, CorVel applies Customer’s negotiated Generic Drug discount rate to the AWP value of Covered Generic Drugs. (i) “GCC” refers to PBM proprietary Generic Code Conversion logic. GCC logic converts Medi-Span codes to the brand and generic codes used for claims adjudication. (j) “Good Samaritan (Emergency) Fill” shall mean a limited supply of Covered Drugs that are outside of the Formulary and typically dispensed outside of normal business hours (overnight, weekends or holidays) by a Participating Pharmacy without Customer’s or CorVel’s approval in order to meet, in the pharmacist’s professional judgment, an immediate or urgent need. Customer is responsible for payment of drug charges processed through Good Samaritan Fills; CorVel assumes no liability. (k) “Mail Order Program” or “Home Deliver Program” shall mean the managed program from which Covered Drugs are dispensed and billed through CorVel’s PBM. A pharmacy’s status as a mail order pharmacy does not indicate participation in the CorVel PBM Mail Order Program. Mail Order participation is limited to designated pharmacies operating within the strict parameters of CorVel’s Mail Order Program. (l) “Multi Source Brand” shall mean a Covered Drug specified as a brand name drug available from more than one manufacturer as determined by CorVel primarily using a combination of data fields provided to CorVel by Medi-Span (or another nationally available reporting source that may be selected by CorVel). Multi Source Brand Drugs are eligible for conversions to Generic Drugs at the Participating Pharmacy. (m) “Multi Source Generic” shall mean a Covered Drug specified as a multi source generic drug as determined by CorVel primarily using a combination of data fields provided to CorVel by Medi-Span (or another nationally available reporting source that may by selected by CorVel). Generic Drugs in their six month exclusivity period or limited supply drugs may be excluded from Multi Source Generic Drugs.
(n) “PBM” shall mean Pharmacy Benefits Manager. CorVel performs as the PBM on behalf of its Customers.
(o) “Presenting Drug” shall mean the drug ordered by the prescriber and presented on a signed prescription to a Participating Pharmacy and processed through CorVel’s PBM. (p) “Rate application exceptions,” per Billing and Payments of Pharmacy Program (below) sections (d) and (e), apply when either State Fee Schedule AWP Values or Customer’s Negotiated PBM AWP Discount rates are lower than CorVel’s Acquisition Price. CorVel’s Acquisition Price reflects CorVel’s cost of the Covered Drug plus a processing and management fee.
(q) “Single Source Brand” shall mean a Covered Drug specified as a brand name drug available from only one manufacturer as determined by CorVel primarily using a combination of data fields provided to CorVel by Medi-Span (or another nationally available reporting source that may by selected by CorVel). Single Source Brand Drugs are not eligible for conversions to Generic Drugs.
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(r) “Single Source Generic” shall mean a Covered Drug as determined by CorVel that may not have been purchased by pharmacies at standard Multi Source Generic Drug rates because of limited manufacturers, limited supply or exclusivity rights. In the adjudication process, Customer’s Brand Drug AWP Discount value may be applied to Single Source Generic Drugs.
(s) “Specialty Medications” shall mean certain pharmaceuticals, biotech or biological drugs, that are Covered Drugs used in the management of chronic or genetic disease, including but not limited to, injectable, infused, or oral medications, or products that otherwise require special handling. In the adjudication process, Customer’s Claims Professional’s approval is required, and Customer’s Brand Drug AWP Discount value and dispensing fee may be applied irrespective of the Presenting Drug’s GCC (Generic Code Conversion) status.

III. DELIVERY OF SERVICES.
(a) CorVel shall provide its Pharmacy Program’s PBM and Network for the benefit of Customer.
(b) Eligibility, First Fill, Pharmacy Identification (ID) Cards, and Mail Order/Home Delivery.

Pharmacy ID cards contain the necessary data elements to enable a Participating Pharmacy provider to electronically process through and transmit claim data to CorVel’s PBM. The electronic transmission that occurs at the point of sale is required for application of Formulary, Concurrent Drug Utilization Review and contractual pricing. i. Customer agrees to promptly provide CorVel all information needed to produce and distribute Pharmacy ID cards to Eligible Claimants. Subject to applicable law, Customer will instruct Eligible Claimants to use the Pharmacy ID cards at participating network providers in order to facilitate the Pharmacy Program. ii. Distribution of Pharmacy ID cards does not guarantee that Pharmacy ID cards will be appropriately utilized by Eligible Claimants or Participating Pharmacies; therefore, Customer understands that claims assigned by Pharmacies to third party billers or paper bills submitted by the Pharmacies are not adjudicated through the prospective PBM.
iii. CorVel, agrees to produce and distribute Pharmacy ID cards to Eligible Claimants upon receipt of all necessary Eligible Claimant information from Customer. CorVel will also send an introduction letter to the Eligible Claimant along with the Pharmacy ID card.
iv. CorVel will provide access for Eligible Claimants to the PBM Mail Order Program.

CorVel will work with Customer to establish the parameters of the Mail Order Program and the process which will be utilized to encourage Eligible Claimant use of the Mail Order Program.
(c) CorVel’s PBM will present a proprietary or state mandated Formulary to Customer. Upon presentation of identification to a Participating Pharmacy, the Formulary will trigger the Participating Pharmacy’s adjudication system to either:
i. Automatically dispense certain medications, or
Obtain Prior Authorization (PA) approval from claims professional to dispense, (d) CorVel’s PBM will implement a Concurrent Drug Utilization Review (“DUR”) program on behalf of Customer, Concurrent DUR includes a review of the drug history at the time the 40 June 5, 2023 Item 09
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prescription is presented. Absent Customer’s directions, DUR shall be performed in accordance with CorVel’s PBM’s standard service model.

IV. BILLING AND PAYMENTS OF PHARMACY PROGRAM.
(i) Financial obligations of parties.
(i) Customer shall be financially responsible for all drug charges incurred by claimants for dispensed medications processed under CorVel’s PBM. CorVel assumes no liability for drug charges with the exceptions noted below in subsection iii. (ii) If the CorVel claims professional determines, upon receipt of CorVel’s PBM invoice, that specific formulary and non-formulary drugs should not have been dispensed, the CorVel claims professional should inform the PBM as soon as possible.

1. The PBM will request a reversal from the Participating Pharmacy. If granted, CorVel will reverse the drug charges, however, if the Pharmacy does not grant the PBM’s request, Customer is responsible for payment of the drug charges; CorVel assumes no liability for drug charges with the exceptions noted below in subsection iii.
(iii) Upon receipt of an invoice, CorVel claims professional may timely dispute charges for drugs that were dispensed in error, triggering CorVel’s PBM to reverse the drug charges, by notifying CorVel for any of the following reasons:

1. CorVel’s PBM and/or the Participating Pharmacy’s violation of Formulary or Utilization Review Parameters set forth in Customer’s DUR program, or in the Claimant Level Formulary; or

2. Duplicate or inadvertent entries or other clerical mistakes on a PBM invoice.
(ii) Invoicing and Payment.

On a per Covered Drug basis CorVel will apply daily for all drug charges and fees related to the PBM directly to the claim file.

CorVel shall invoice and bill directly all prescription fees to the specific claims file.

CorVel uses Medi-Span as our AWP data source. CorVel’s Medi-Span database is updated daily and AWP values are applied on the date of dispense.

In all states with the exception of California, Customer will be billed the lessor of the state fee schedule AWP or the CorVel’s negotiated rate. (iii) Both parties understand that pricing indices historically used (including under this Agreement) for determining the financial components of pharmacy billing rates are outside the control of CorVel and Customer. The parties also understand there are extra-market industry, legal, governmental and regulatory activities which may lead to changes relating to, or elimination of, these pricing indices that could alter the financial positions and expectations of both parties as intended under this Agreement.

Both parties agree that, upon entering into this Agreement and thereafter, their mutual intent has been and is to maintain pricing neutrality as intended and not to benefit one party to the detriment of the other. Accordingly, to preserve this mutual intent, if pricing neutrality does change and CorVel undertakes any or all of the following:
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(i) Changes the AWP source, or other source if AWP is not applicable, across its book of business (e.g., from Medi-Span to First Databank); or (ii) Maintains AWP, or other source if AWP is not applicable, as the pricing index with an appropriate adjustment in the event the AWP, or other, methodology and/or its calculation is changed, whether by the existing or alternative sources; or (iii) Transitions the pricing index from AWP, our other source if AWP in not applicable, to another index or benchmark (e.g., to Wholesale Acquisition Cost); Customer’s negotiated PBM pricing will be modified as reasonably and equitably necessary to maintain the pricing intent under this Agreement.

V. California Modification
On April 15, 2016, the State of California Department of Industry Relations applied the new Federal Upper Limit (FUL) index to the California Pharmacy Workers’ Compensation Fee Schedule. The new FUL index has resulted in a need for CorVel to modify our current pricing structure based on the fee schedule changes and our contract language.

The FUL’s impact and the modification is limited to generic drugs; brand drug pricing will not change. As per our contract, the modification will maintain “pricing neutrality” between both parties.

SCHEDULE 7
Peer Review/Medical Records Review Program
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) CorVel shall provide access, and deliver the services described in this Schedule 7 in connection with such access, to a panel of medical professionals who have been credentialed by CorVel as “Credentialed Providers” and who will perform Peer Review (“Peer Reviews”) and Medical Record Reviews (“MRRs”).
(b) Peer Review/Medical Records Review is defined as the process of reviewing and commenting on the work, decisions and/or recommendations by one’s equal (peer) to ensure that it meets specific criteria such as federal and state regulations, and nationally accepted standards of care in rendering medical services.

II. DELIVERY OF SERVICES.
(a) CorVel shall work only with Credentialed Providers under this Agreement. “Credentialed Providers” are medical professionals with respect to whom CorVel has performed its standard credentialing process. CorVel shall also verify that the medical professionals who are Credentialed Providers meet all applicable statutory and/or legal requirements regarding who can conduct a Peer Review or MRR.
(b) Customer shall have the right to nominate medical professionals as candidates for addition to the panel of Credentialed Providers provided by CorVel for access by Customer (“Credentialed Panel”), subject to such medical professionals being credentialed by CorVel as Credentialed Providers.
(c) Customer shall have the right, with written notice to CorVel, to request that CorVel cease using a specific medical professional from the Credentialed Panel for Customer’s claimants. Upon receipt of such notice from Customer, Supplier shall promptly cease using the specified medical professional as requested by Customer in such notice. 42 June 5, 2023 Item 09
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(d) Customer may submit a request for a Peer Review or a MRR via phone, fax, or electronically via CorVel’s CareMC website, if applicable. (e) CorVel shall ensure that the MRR is assigned to a provider within 2 business days of receipt of request or in accordance with applicable State law. (f) CorVel will copy required medical records for the Peer Review or MRR as provided by the Customer’s file handler or legal office. CorVel will obtain additional medical records as requested.
(g) CorVel shall deliver to Customer completed Peer Review and MRR reports within 7 business days of assignment to the Credentialed Provider. Prior to such delivery to Customer, CorVel shall complete its quality review of such report. (h) CorVel shall provide Customer quarterly activity reports within twenty (20) business days following the applicable quarter.

SCHEDULE 8-A
Medicare Set-Aside Services
Terms and Conditions
I. DESCRIPTION OF OTHER SERVICES
a. Medicare Set-Asides: CorVel provides an extensive review of medical records and medical bills, producing a comprehensive report and cost projection outlining future Medicare eligible costs in anticipation of settling out future medical care on a Customer’s employee or insured individual. Costs are determined through CorVel’s proprietary Bill Review system as well as utilization of the online Red Book™ access for medication costs.

Red Book™ is the accepted authority by CMS for pricing on all medications. b. Life Care Plans/Future Cost Projections: Life Care Plans/Future Cost Projections are a plan for optimal utilization of health care dollars that document objective view of the future health needs, services and related costs. It provides for comprehensive reports summarizing medical treatment and care and outlining life time needs for a Customer’s employee or injured individual when they are catastrophically injured. Life Care Plans/Future Cost Projections are also used both for litigious settlements as well as projecting reserves setting.
c. Medicare Conditional Payment Resolution: CorVel’s service includes securing Medicare Conditional Payment letters and disputing the Medicare Conditional Payments unrelated to the claim. CorVel communicates directly with the Medicare contractors, the CRC (Commercial Repayment Center) or BCRC (Benefits Coordination & Recovery Center) to resolve the Medicare Conditional Payment debt.

II. DELIVERY OF SERVICES OF MEDICARE SET ASIDES
a. Customer/Carrier shall provide the CorVel Medicare Set-Aside Hub office with a copy of the first report of injury, most recent two years of medical records and medical bills including indemnity payout, all operative reports, IMEs/AMEs as well as orders rendered by the workers’ compensation judicial system. Appropriate releases for completion of request for service will be forwarded either to the Customer or, at the Customer’s request, directly to counsel representing the injured worker to obtain the injured worker’s signature. b. Customer may submit a request for a Medicare Set-Aside via email, phone, fax, or electronically via CorVel’s CareMC website, if applicable. 43 June 5, 2023 Item 09
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c. A certified Medicare Consultant (“Consultant”) will review the medical records and bill summary, prepare a detailed summary of the records and a projection for future medical expense which are Medicare eligible. If requested, the Consultant will also provide a projection of those costs which are not Medicare eligible in order to provide the customer with their total medical exposure.
d. The Consultant will return the completed Medicare Set-Aside report to the Customer within fifteen (15) business days of receiving all relevant medical records and related information. If a rated age is warranted, the Consultant will acquire same. If the Medicare status of injured party is unknown or unclear, a request for Medicare status will be submitted to the Social Security Administration. Once the Medicare status is known, the Coordination of Benefits Contractor will be notified and conditional payments requested. e. Upon Customer’s request, CorVel Medicare Set-Aside Hub office will submit through the web-portal all required documents to enable CMS to review and approve the proposal.

Items submitted include the Medicare Set-Aside report, the tentative settlement amount, along with other required documentation, to the Centers for Medicare & Medicaid Services (CMS). Upon receipt, CorVel Medicare Set-Aside Hub office will forward the CMS Determination letter to the Customer. Final executed settlement documents (reflecting CMS recommended Medicare Set-Aside amount) will be provided to CorVel Medicare SetAside Hub by the Customer/counsel and then forwarded by CorVel to CMS through the web-portal.
f. Upon request from Customer, CorVel shall provide Customer quarterly activity report within twenty (20) business days following the applicable quarter.

III. DELIVERY OF SERVICES OF LIFE CARE PLANS/FUTURE COST PROJECTIONS a. Customer shall provide all available medical records and billing to CorVel Medicare Set-Aside Hub office as well as any other pertinent records for initial review. b. For a Life Care Plan, a visit to the residence of the Customer’s employee or injured individual with interview of claimant and family will be conducted after permission is acquired by the Customer. The interview will include evaluation of the home setting, extensive information gathering, and pictures of the various equipment and housing structures.
c. Letters will be sent to all treating physicians to obtain their opinions on future medical treatments including medications and therapies for the claimant. The physician’s opinions will be included as recommendations within the Life Care Plan summaries. d. Future cost projections are utilized to immediately set reserves for future medical needs regarding catastrophic or major injuries. Home visits are not conducted for a future cost projection.
e. Customer may submit a request for a life care plan or future cost projection via email, phone, fax, or electronically via CorVel’s CareMC website, if applicable.

SCHEDULE 8-B
Medicare Agent Services – Managed Care Customer
Liability Claims
Terms and Conditions
I. DESCRIPTION OF OTHER SERVICES
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In order to assist Customer, as a Responsible Reporting Entity (“RRE”), in complying with the mandatory quarterly electronic reporting requirements issued by the Centers for Medicare/Medicaid Services (“CMS”) under the Medicare/Medicaid and S-CHIP Extension Act of 2007, Section 111 (the “Act”) regarding certain injured parties who are Medicare Beneficiaries, CorVel provides Medicare Agent services as described below subject to the provisions of the final regulations to be issued by CMS.

II. DESCRIPTION OF MEDICARE AGENT SERVICES
(a) Upon designation as Customer’s Medicare Agent, CorVel shall provide Customer assistance with Customer’s registration as a Responsible Reporting Entity (“RRE”).
(b) CorVel and Customer will establish a manual interface to facilitate the exchange of specific claims data required to be reported to CMS under the Act; thereafter, as Customer’s designated Medicare Agent, CorVel will initiate a test file interface with CMS within the statutory timeframes required by CMS under the Act. (c) Upon successful completion of the test file interface, CorVel will commence an ongoing monthly query process on behalf of Customer where CorVel will transmit through the CMS Query Tool certain basic claims data elements (claimant name, social security number, date of birth and gender) on the liability claims the Customer provides to CorVel via the manual interface, for CMS to determine if such claim data elements match a valid CMS record indicating Medicare eligibility.

CorVel will report the results of such query on CareMC and in a Monthly Eligibility Query report for Customer to review. In the event the Medicare Reporting Queue determines any such liability claim is invalid due to an error or missing information, then Customer shall be responsible for reviewing, researching and correcting such claims data from the Monthly Eligibility Query report supplied by CorVel to the Customer, for resubmission by CorVel through the CMS Query Tool on the next monthly query process transmission; provided, however, if Customer so requests, CorVel will provide such research regarding Medicare eligibility at an additional hourly rate and such research shall include claimant’s name, social security number, date of birth, gender and any other required data field. (d) Once it is determined through the Medicare Reporting Queue that a liability claimant is Medicare eligible, the Customer will provide CorVel through the manual interface all data elements necessary to commence the transmission of mandatory quarterly electronic claims reporting of those liability claimants to the CMS Benefits Coordination & Recovery Center (BCRC) on Customer’s behalf within the specific 7-day reporting period assigned to Customer by CMS. A copy of the initial report shall also be posted by CorVel on CareMC for Customer to review. The BCRC will confirm either acceptance of the Medicare eligible claims thus reported or return any files for which data is missing or incorrect. CorVel shall post on CareMC and provide Quarterly Claim Submission reports to the Customer with any error reports from the BCRC showing such files containing missing or incorrect data for Customer to research and correct by the manual interface to CorVel. Once corrected, CorVel will enter the data and resubmit such files to the BCRC during the next quarterly reporting file.
(e) CorVel, as Customer’s designated Medicare Agent, will continue to electronically transmit to the BCRC on a quarterly basis all new and updated liability claims provided by the Customer to CorVel through the manual interface, identified through the Medicare Reporting Queue and the Customer provided CorVel the necessary data to report the Customer’s Medicare eligible claims. (f) CorVel, as Customer’s designated Medicare Agent, will also electronically transmit 45 June 5, 2023 Item 09
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to the BCRC any monetary settlement data received by the Customer to CorVel through the manual interface on Customer’s Medicare eligible claims. (g) CorVel shall provide Customer quarterly activity reports within twenty (20) business days following the applicable quarter.

III. LIMITATION OF LIABILITY REGARDING MEDICARE AGENT SERVICES In order to assist Customer, as a Responsible Reporting Entity (“RRE”), in complying with the mandatory quarterly electronic reporting requirements issued by the Centers for Medicare/Medicaid Services (“CMS”) under the Medicare/Medicaid and S-CHIP Extension Act of 2007, Section 111 (the “Act”) regarding certain injured parties who are Medicare Beneficiaries, CorVel agrees to provide Medicare Agent services as described in Schedule 2 attached hereto subject to the provisions of the final regulations to be issued by CMS, including information relating to such claimant, and the establishment and maintenance of an electronic data interface with CMS’s computer system to the extent required by law and within the time period required by CMS so as to avoid the incurrence of penalties and fines (“RRE Reporting Obligations”).
(a) In order for Customer to meet its RRE Reporting Obligations, Customer shall promptly review the results of the Medicare Reporting Queue, research any errors or missing data and resubmit such corrected or missing data promptly to CorVel within the applicable timeframes so that CorVel can timely report such corrected or missing data to CMS.
(b) In the event that information supplied by Customer to CorVel is incorrect, incomplete or untimely delivered and prevents CorVel from completing a timely transmission to CMS, or leads to errors in transmissions to CMS, Customer shall be solely responsible for promptly resubmitting corrected data to CorVel, and CorVel will not be liable for any damages, fines, penalties or other amounts to the extent arising from such incorrect, incomplete or untimely delivered information. CorVel shall notify Customer via a posting on CareMC and the Quarterly Claim Submission report if CorVel receives notice from CMS that a transmission submitted by CorVel on behalf of Customer as an RRE contains incorrect, incomplete or untimely delivered information. The Customer shall correct errors necessary to complete successful transmission to CMS. (c) Customer shall release CorVel from any and all penalties or other fines imposed by CMS and its related governmental agencies, in the event information supplied by Customer to CorVel is incorrect, incomplete or untimely delivered and prevents CorVel from submitting a report to CMS or leads to errors in submissions to CMS.

SCHEDULE 9
Clearinghouse Payer Agent Services Program
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Clearinghouse Payer Agent Services: CorVel shall act as Customer’s agent under this Agreement. CorVel’s clearinghouse receives bills from health care providers in electronic form, verifies the data integrity of the information on the bills, and routes directly to CorVel’s Bill Review system for completion of CorVel’s Bill Review service. Explanation of Benefit (EOR) information will be transmitted to providers from CorVel in the ANSI 835 format. CorVel will send 835 data to health care providers via it’s clearinghouse upon CorVel’s completion and approval of all Explanation of Reviews (EOR’s) via CorVel’s Bill Review service in compliance with the local governing state laws and regulations. 46 June 5, 2023 Item 09
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(b) Compliance with applicable law: CorVel shall ensure that Clearinghouse Services are provided in compliance with the applicable laws, statutes, rules and regulations of the state service shall be provided in. Customer agrees to timely provide to CorVel information and assistance requested by CorVel and reasonably required to ensure such compliance.

2. SETUP AND DELIVERY OF SERVICES
(a) Routing Directly to Bill Review: A test sample of Customer’s bills will be pulled from the clearinghouse test system and imported to the bill Review test system. Bill Review results will be output to Customer through the existing format. Routing bills through CorVel’s Test bill review system may require three to four weeks. CorVel will make reasonable efforts to begin testing within five business days of the request for services.

3. PRICING STRUCTURE
The cost of Clearinghouse Payer Agent Services is as follows:
• For customers for whom CorVel provides bill review services – No additional charge SCHEDULE 10
Advocacy 24/7 Nurse Triage Services
Terms and Conditions
CorVel shall provide to Customer the following Services related to Nursing Coordination of Care Services:
• Answer calls received 24 hours a day/7 days per week on CorVel maintained Customer triage telephone line.
• Instruct the caller / injured employee on first aid and or initial injury treatment. • Facilitate assessment at a designated outpatient clinic or emergency room as needed. • Follow up with the injured employee within 24 hours of initial report to evaluate current condition.
• Document all calls and communicate to appropriate parties.

An incident shall encompass
• The nurse receipt of the initial call,
• The gathering of necessary information and distribution of said information to the appropriate parties, and
• One clinical follow-up to the injured employee in the first 24 hours following the initial call.

SCHEDULE 11
Medication Review Services
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) CorVel acknowledges there is a subset of patients in the system that do not improve despite extensive diagnostic testing and numerous treatments. CorVel knows these relatively fewer cases drive a disproportionate amount of costs. Interestingly, these “creeping catastrophic” claims often present as a simple strain or sprain injury or diffuse spinal pain. There is ample data to suggest that bio-psychosocial factors can amplify, 47 June 5, 2023 Item 09
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sustain or mitigate a patient’s perception of disability in these cases. CorVel shall use clinical modeling to identify those patients at risk for delayed recovery and apply an interdisciplinary bio-psychosocial approach to their care. (b) CorVel offers a variety of interventions that are recommended depending on the severity and chronicity of the claim. They can be utilized separately or integrated in a more comprehensive management plan again depending on claim severity and patient characteristics.

II. DELIVERY OF SERVICES.

Medication Review:
• CorVel’s contracted physician will evaluate the medical necessity of each currently used or prescribed medication.
• CorVel’s contracted physician will recommend elimination of duplicative medications. • CorVel’s contracted physician will determine and recommend medications that may replace and be equally or more effective than one or a group of currently used/prescribed medications.
• CorVel’s contracted physician will recommend medications that are pharmacologically similar to currently used or prescribed medications when available at a lower cost (same or similar class, less cost, generic when available). • CorVel’s contracted physician will attempt Peer to Peer contact by calling the PTP. • CorVel’s contracted physician will provide the customer a written agreement from the prescribing physician (if agreement is reached) for alternate treatment plan. • On cases where agreement is not met between CorVel and the PTP a written report will be generated and sent to the customer that includes a written summary of all activity that will include recommendations, rationales and potential savings identification made by CorVel’s contracted physician.
• Allowances will be made for the attending physician to bill for their time spent on the teleconference at the applicable fee schedule.

Wellness Program:

Cases can be initially referred to a network of cognitive behavioral therapists who function to help the patient/claimant improve their pain coping skills, change their perception of disability and decrease fear-avoidance behaviors that are often a significant barrier for RTW.

SCHEDULE 12
TeleHealth Services
Terms and Conditions
CorVel shall provide TeleMedicine visits to Customer’s injured employees who opt for such service for as level of care determinations are made through our 24/7 nurse triage hotline. A TeleMedicine visit is a single synchronous virtual consultation through CorVel’s third party vendor platform between a Qualified Professional and a claimant (“TeleMedicine”).

CorVel’s 24/7 triage nurses are trained to provide an initial assessment and will provide immediate referral to medical care when needed. Nurses may refer to TeleMedicine as appropriate (i.e., musculo-skeletal injuries).
• TeleMedicine virtual visits are always an “option” for the injured employee. • If opted by the injured employee, CorVel connects the injured employee to a physician immediately via a computer, tablet or phone.
• If the injured employee decides that he/she does not want a TeleMedicine visit, CorVel will immediately offer to schedule the injured employee with a traditional, in-person PPO medical provider located at a convenient, clinic-based location. 48 June 5, 2023 Item 09
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A TeleMedicine “visit” is defined as “A Consultation Unit” is a single synchronous consultation through the Platform between a Qualified Professional and a patient.” SCHEDULE 13
Workers’ Compensation Lien Resolution Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
a) Lien Resolution Services. CorVel shall provide Lien Resolution Services for Customer through its CareMC Application to control and provide resolution and closures to lien file cases. CorVel shall utilize industry standard processes including having CorVel attend Workers Compensation Appeals Board (“WCAB”) conferences & trials, and negotiate as required or applicable.
b) Workers Compensation Appeals Boards Serviced:

AHM – Anaheim SBR – San Bernardino
OXN - Oxnard SDO – San Diego
POM – Pomona VNO – Van Nuys
RIV- Riverside SAC – Sacramento
ANA - Santa Ana OAK – Oakland
LBO – Long Beach SFO – San Francisco
LAO – Los Angeles STK – Stockton
MDR – Marina Del Rey
c) Workers Compensation Appeals Boards Serviced on a case-by-case basis:

SBA – Santa Barbara RED – Redding
SLO – San Luis Obispo FRE – Fresno
SJO – San Jose BAK – Bakersfield

2. DELIVERY OF SERVICES
a) Claim Referral. Lien resolution services are on a referral basis per claim and subject to prior Customer approval.
b) Reporting. CorVel shall provide monthly reports at no charge to Customer. c) Case-in-chief walk-through service.
(i) CorVel shall provide Walk-throughs for pro-per cases, and as needed for litigated claims.
(ii) Customer’s claims adjuster professional shall provide referrals for each lien resolution settlement agreement.
(iii) CorVel shall prepare all required documentation and file packets, obtain the adjudicating number and the order approving from the judges at the WCAB. (iv) Results are reported by CorVel to Customer weekly at the end of the same week they are assigned.
d) Service and Review of Initial Discovery.

CorVel shall review, gather and serve all documents relevant to the case and the outstanding liens that will be necessary to satisfy the requirements of discovery and due process, including, but not limited to: Settlement documents, medical reports, Request for Authorizations (“RFA’s”) Utilization Review (“UR”)determinations, objection letters, and bill review.
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e) Declaration of Readiness Filings.

CorVel shall utilize an electronic filing of a declaration of readiness to proceed to request a hearing date with the WCAB in order to facilitate or expedite Lien Resolution and/or Litigation (if necessary).
f) Attendance at the WCAB for Lien Conference and/or Lien Trials CorVel shall have its own experienced hearing representatives appear at the WCAB on behalf of the Customer with the goal of resolving any outstanding liens, or moving towards litigation (if necessary).
g) Litigation Review and Support
CorVel shall review and analyze the lien claimant evidence provided in support of CorVel’s position when a matter is set for a lien trial.
h) CorVel’s Obligations
(i) CorVel shall provide Lien Resolution Services as described herein to Customer upon receipt of specific referral from Customer. In the absence of instructions from Customer to the contrary, which CorVel must approve and Lien Resolution Services shall be performed as described herein.
(ii) CorVel shall complete its Lien Resolution Services within sixty (60) days of referrals without litigation, provided there are no delays from litigation. (iii) Any conflicts or complaints from providers and/or their lien claimant vendors (“Complaints”) concerning Lien Resolution Services completed by CorVel initially will be handled directly by CorVel. CorVel will provide an initial response to a Complaint within one (1) business day following the date on which CorVel received the Complaint.

CorVel will send a written response to the complainant within five (5) business days that summarizes the nature of the Complaint and the steps CorVel has taken to resolve it. A copy of this response will be sent to the attention of the designated Customer account representative. Different or more specific parameters of CorVel's authority to respond to and resolve Complaints hereunder may be agreed to mutually by the parties. Further, Customer shall have the right, but not the obligation, at any time, to interject itself into a Complaint between CorVel and a provider and to resolve the Complaint in a manner acceptable to Customer at its sole discretion. Notwithstanding the foregoing, Customer shall retain full responsibility for payment of all benefits and any other expenses or services required to be paid or provided under applicable policies or state and federal workers’ compensation laws. (iv) CorVel agrees to supply Customer, at no additional cost, a transmission or report in the format in which it is then customarily stored by CorVel reflecting the results of Lien Resolution Services provided monthly. Such data shall be provided as to further allow for the application of Lien Resolution Service fees to the individual claim file and the payment of said fees.

3. PRICING
(a) Pricing is based on a percent of savings after fee schedule application. There is a per lien cap that ensures the client pays no more than this maximum amount per lien. Some items, such as a walk-through service and an adequacy hearing are billed at a flat rate. (b) Method of Pricing: Percentage of savings per lien after fee schedule is applied, versus total billed amount. Savings is defined as the difference between total claimed lien amount after fee schedule reduction and final lien settlement amount, or amount ordered paid by WCAB.
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(i) For liens not subject to Official Medical Fee Schedules (“OMFS”) nor Usual and Customary, pricing will be calculated at percentage of savings from overall difference between total amount billed and final lien settlement amount. (c)Authority to resolve liens without determination of OMFS granted by employer to expedite file closure will be invoiced at a reduced percentage of savings from the billed amount. (d) Litigation pricing is applied to liens that are the subject of a pre-trial conference statement.

This includes, but is not limited to: service of trial exhibits, review of lien claimant trial exhibits, pre-trial and post-trial briefings as well as points & authorities, petitions for reconsideration, and petitions for costs and/or sanctions for frivolous litigation.

Claim Referral:

Lien resolution services are on a referral basis per claim, and subject to client approval.

Litigation pricing is only applied to liens that are the subject of a pre-trial conference statement.

This includes, but is not limited to: service of trial exhibits, review of lien claimant trial exhibits, pre-trial and post-trial briefings as well as points & authorities, petitions for reconsideration, and petitions for costs and/or sanctions for frivolous litigation. 51 June 5, 2023 Item 09
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EXHIBIT “D”
CareMC License Agreement
This CAREMC LICENSE AGREEMENT (the “CareMC License Agreement”) is incorporated by reference into the Services Agreement (the “Master Agreement”) to which it is attached. The parties acknowledge and agree that the terms and conditions under which the Services are provided by CorVel and received by Customer shall be governed by the Master Agreement (including without limitation all additional Exhibits and applicable Schedules attached thereto), while the terms and conditions under which Customer may access and use the Online Services shall be governed by the terms and conditions of this CareMC License Agreement. All defined terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Master Agreement.

1. ACCESS TO THE CAREMC APPLICATION
A. Registration Information. Prior to accessing the CareMC Application, Customer shall provide CorVel with certain registration information requested therein (“Registration Information”).

Customer covenants that the Registration Information Customer provides will be true, accurate, current and complete and will be updated as necessary.

B. Passwords and Levels of Access. As soon as practicable after the execution of this Agreement, CorVel shall create a unique username and password for each individual Authorized User identified by Customer as requiring access to the Online Services. Customer shall then designate a group of Authorized Users. The group of Authorized Users (“Restricted Users”) shall have “read only” access to only the data available on the CareMC Site that relates to claims specific to that Authorized User and such other data that Customer specifically requests in writing be accessible to such Authorized User. If Customer requires a second group of Authorized Users (“Non-Restricted Users”) shall have editing access to all data available on the CareMC Site that relates to claims specific to Customer. Access by Individual Users and Non-Restricted Users to data available on the CareMC Site shall be subject in all cases to any limitations imposed by applicable law.

C. Personal Information Data. Authorized Users shall have access to all data available through the CareMC Application, including data that constitutes or contains “Personal Information” as such term is defined in applicable state and federal privacy laws, but shall only have access to Personal Informaiton to the extent necessary for Customer to read only a claim, and then only to those portions or amounts of Personal Information that are determined by CorVel, in its sole discretion, to be the minimum necessary for Customer to edit such claim.

D. Security of Passwords. Customer acknowledges and agrees that it shall be solely responsible for (i) selecting Authorized Users, (ii) assigning the various levels of authority and access each Authorized User may have to the CareMC Application, Online Services and Customer Data, including by determining which Authorized Users shall be Non-Restricted Users, (iii) ensuring that only Authorized Users have access to the passwords provided by CorVel or changed by Authorized Users, (iv) implementing a system to control, track and account for all passwords, (v) strictly maintaining the confidentiality and integrity of all passwords and levels of authority among Authorized Users, and (vi) ensuring that Authorized Users shall at all times comply with the terms and conditions of this Agreement. Customer further agrees that it shall notify CorVel immediately in writing if the security or integrity of a password has been compromised. CorVel will provide reasonable cooperation to Customer in the event of a security breach. Such support will include but not be limited to suspending service for passwords whose security or integrity has been violated. Passwords may be changed at any time by Authorized Users, and must be changed at least once every ninety (90) days.

E. Customer Data. Responsibility for ensuring that the content and data provided by or for Customer (“Customer Data”) to be entered into the CareMC Application by CorVel is accurate and reflects Customer’s requirements lies solely with Customer. All data generated by and through Customer’s use of the CareMC Application and Online Services shall reside on CorVel’s 52 June 5, 2023 Item 09
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server. CorVel reserves the right to temporarily suspend access to any Customer Data that it determines, in its sole discretion, violates the terms and conditions of this CareMC License Agreement or any applicable laws.

F. Customer Representations. Customer represents that (i) it has the legal authority to provide the Customer Data to CorVel hereunder, and (ii) it is fully aware and knowledgeable of and shall comply with its duties and responsibilities with respect to the privacy and confidentiality of medical records and protected health information under applicable federal and state laws, including but not limited to those imposed by applicable state and federal privacy laws. Upon written notice to Customer, CorVel may modify or temporarily suspend Customer’s access to and use of the CareMC Application, Online Services and/or CareMC Site as necessary to comply with any law or regulation.

2. LICENSE AND RESTRICTIONS
A. Limited License. Subject to the terms and conditions of this CareMC License Agreement, CorVel grants to Customer during the License Term (as defined in Section 5A below) a limited, non-exclusive, non-transferable, non-sublicensable license to access and use, and allow Authorized Users to access and use, the CareMC Application via the CareMC Site solely for Customer’s own internal business use and operations. Customer shall access and use the CareMC Application in accordance with the user’s guides and online instruction provided to Customer by CorVel (“Documentation”) and all applicable laws, statutes, rules and regulations.

B. Restrictions. Customer shall not, and shall not allow Authorized Users or any third party to (i) rent, lease, re-license or otherwise provide access to the CareMC Application or Online Services to any third party, (ii) alter, modify or create derivative works of the CareMC Application, (iii) use any reverse compilation, decompilation or disassembly techniques or similar methods to determine any design structure, concepts and construction method of the CareMC Application or replicate the functionality of the CareMC Application for any purpose, or (iv) copy the CareMC Application or any content, materials, information and other data provided by CorVel on the CareMC Site or used in providing the Online Services (“CorVel Content”) and/or Documentation without CorVel’s prior written consent.

C. Third Parties. Customer shall not allow any third party to have access to the CareMC Application or Online Services without prior written consent of CorVel and ensuring that (i) such third party enters into a legally enforceable written agreement with CorVel, or (ii) CorVel and Customer enter into an agreement whereby Customer assumes all responsibility and liability for access by such third party.

D. Ownership and Changes. CorVel owns and shall retain all right, title and interest in and to the CareMC Application, Documentation, CareMC Site, Online Services, CorVel Content and any intellectual property rights inherent therein or arising therefrom. In addition to CorVel’s rights in the individual elements of the CorVel Content, CorVel owns a copyright in the selection, coordination, arrangement and enhancement of the CorVel Content. Neither Customer nor any Authorized User shall obtain any ownership rights, express or implied, or any other rights other than those expressly set forth herein in the CareMC Application, Documentation or CorVel Content. CorVel reserves the right, at any time in its sole discretion and without liability to Customer, to delete or change features of the CareMC Application, CareMC Site or Online Services provided such changes do not materially alter the functionality of the CareMC Application.

E. Compliance Monitoring and Audits. CorVel may monitor and perform remote audits of Customer’s use of the CareMC Application and CareMC Site for the purpose of verifying that Customer and Authorized Users are using the CareMC Application in compliance with the terms of this CareMC License Agreement. CorVel reserves the right to temporarily suspend Customer’s or any Authorized User’s access to the CareMC Application in the event Customer or such Authorized User engages in, or CorVel in good faith suspects is engaged in, any unauthorized conduct.
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3. INFRASTRUCTURE, MAINTENANCE AND SUPPORT
A. CorVel Infrastructure Obligations. Subject to Customer’s compliance with the terms and conditions of this CareMC License Agreement, CorVel shall be responsible for providing and maintaining the hardware, software and other equipment required to host the CareMC Application for Customer (“CareMC Infrastructure”). The CareMC Infrastructure is subject to modification by CorVel from time to time for purposes such as adding new functionality, maximizing operating efficiency and upgrading hardware, provided such modifications shall not in the aggregate degrade the performance of the Online Services utilized by Customer. Customer acknowledges and agrees that such modifications may require changes to Customer’s Internet access and/or telecommunications infrastructure to maintain Customer’s desired level of performance. CorVel shall give Customer reasonable prior written notice of any required modifications.

B. Customer Infrastructure Obligations. Except for the CareMC Infrastructure, which will be provided by CorVel, Customer shall be responsible for obtaining and maintaining all hardware, software, equipment, Internet access and/or telecommunications services and other items or services furnished by third party venders or providers (“Third Party Providers”) required to enable Customer to access and use the CareMC Application and CareMC Site as contemplated hereunder.

C. Support. CorVel will provide general support regarding questions on the CareMC Application via email and by telephone from Monday through Friday between the hours of 5:00 a.m. and 6:00 p.m. Pacific Standard Time, excluding holidays.

D. Scheduled Maintenance. CorVel will use reasonable efforts to (i) perform any scheduled downtime outside of Customer’s normal business hours, (ii) notify Customer of all scheduled downtimes at least seventy-two (72) hours in advance, and (iii) perform software updates to the CareMC Application with minimal disruption to Customer’s use of the Online Services.

E. System Monitoring. CorVel will use reasonable efforts to continuously monitor its web servers and database servers to ensure that they are functioning properly.

F. Security. CorVel will implement and use reasonable efforts to maintain secure systems through the use of firewalls, virtual private networks (VPN) and other security technologies. Any security violations that affect the data of Customer will be reported to Customer as pursuant to applicable state and federal security laws.

G. Disaster Recovery and Backup. CorVel will use reasonable efforts to perform nightly backups of essential data on its web servers and database servers. CorVel has implemented third party backup and restoration technology to enable high speed recovery of data. CorVel utilizes redundant load balanced industry standard servers and Cloud Computing Platform and Services provided by Microsoft for 24x7, 365 day access, except for regularly scheduled system maintenance and upgrade processes. SQL Server databases are hosted on clustered servers offering fall-over capability, redundant communication links, and load balanced application servers. Backup tapes are restored into a test environment not less than quarterly to confirm validity of backups. The CareMC Site has redundant inbound Internet and Intranet connectivity.

4. APPLICATION SPECIFIC DISCLAIMERS
A. Disclaimers. TO THE EXTENT ALLOWED BY APPLICABLE LAW, EXCEPT FOR THE

LIMITED WARRANTIES DESCRIBED IN THE MASTER AGREEMENT, CORVEL MAKES NO

OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AND EXPRESSLY DISCLAIMS

ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, GOOD TITLE, SATISFACTORY QUALITY AND NONINFRINGEMENT.

B. Internet Usage. Customer acknowledges that the Internet is essentially an unregulated, insecure and unreliable environment, and that the ability of Customer to access and use the CareMC Application is dependent on the Internet and hardware, software and services provided by various Third Party Providers. CORVEL SHALL NOT BE RESPONSIBLE FOR CUSTOMER’S

INABILITY TO ACCESS OR USE THE CAREMC APPLICATION TO THE EXTENT CAUSED BY 54 June 5, 2023 Item 09
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FAILURES OR INTERRUPTIONS OF ANY HARDWARE, SOFTWARE OR SERVICES PROVIDED BY CUSTOMER OR THIRD PARTY PROVIDERS.

C. CareMC Application. CUSTOMER ACKNOWLEDGES AND AGREES THAT CORVEL

DOES NOT WARRANT THAT THE CAREMC APPLICATION OR ONLINE SERVICES ARE

ERROR FREE, THAT CUSTOMER WILL BE ABLE TO ACCESS OR USE THE CAREMC

APPLICATION OR ONLINE SERVICES WITHOUT PROBLEMS OR INTERRUPTIONS, OR

THAT THE CAREMC SITE AND CAREMC APPLICATION ARE NOT SUSCEPTIBLE TO INTRUSION, ATTACK OR COMPUTER VIRUS INFECTION.

5. LICENSE TERM AND TERMINATION
A. License Term. This CareMC License Agreement shall be effective as of the Effective Date and, unless terminated earlier as provided below, shall automatically terminate upon expiration or termination of the Master Agreement (the term of this CareMC License Agreement, the “License Term”).

B. Termination for Convenience. Either party shall have the right to terminate this CareMC License Agreement for any reason or for no reason, upon ninety (90) days written notice to the other party.

C. Termination for Cause. This CareMC License Agreement may be terminated by either party for cause as follows: (i) upon thirty (30) days written notice if the other party breaches or defaults under any material provision of this Agreement and does not cures such breach prior to the end of such thirty (30) day period, (ii) effective immediately and without notice if the other party ceases to do business, or otherwise terminates its business operations, except as a result of an assignment, as permitted under the terms and conditions of this CareMC License Agreement, or (iii) effective immediately and without notice if the other party becomes insolvent or seeks protection under any bankruptcy, receivership, trust deed, creditors arrangement, composition or comparable proceeding, or if any such proceeding is instituted against the other (and not dismissed within ninety (90) days).

D. Effect of Termination. Expiration or termination of this CareMC License Agreement shall have the following effects: (i) CorVel shall provide Customer with any proprietary data belonging to Customer, in the current format in which it is stored at CorVel at the termination of this CareMC License Agreement, (ii) all licenses granted under this CareMC License Agreement shall terminate immediately, (iii) all rights to use the CareMC Application and Online Services shall cease immediately, and (iv) each party shall promptly return all information, documents, manuals and other materials belonging to the other party related to this CareMC License Agreement, whether in printed or electronic form, including without limitation all confidential information of the other party then currently in its possession, provided each party may retain one (1) copy of such materials for archival purposes.

E. Survival. Except to the extent expressly provided to the contrary herein or in the Master Agreement, any right of action for breach of the CareMC License Agreement prior to termination, and the following provisions shall survive the termination of this CareMC License Agreement:

Sections 1B-F, 2B, 2D, 4 and 5E.
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Attachment A to Exhibit D
End User License Agreement
Terms are non-negotiable
Such access shall provide Customer’s claimants an opportunity to (i) review the current status of their individual claim, (ii) share pain level data with their healthcare provider by taking a Pain Level Survey, (iii) receive Electronic Funds Transfer (“EFT”) direct deposit transactions with respect to claims, and (iv) utilize other functions designed to assist users in interactions with their health plan and healthcare providers (the “App Services”). For access by Customer claimant, such Customer claimant will be required to have a smartphone including but not limited to an Apple smartphone or Android smartphone or other smartphone device with such access capabilities. Customer acknowledges the terms of Attachment A hereunder which shall be a part of the My Care App and which the End User (“Claimant”) shall be responsible for. The My Care App is at no costs to Customer for these Services.

PLEASE READ THIS LICENSE AGREEMENT BEFORE USING THE APP. USE OF THE APP INDICATES END USER’S ACCEPTANCE OF THIS END USER LICENSE AGREEMENT. IF END USER DOES NOT AGREE WITH THE TERMS, END USER SHOULD NOT USE THE APP.

1. License Grant; License Restrictions. Either of CorVel Enterprise Comp, Inc. or CorVel Healthcare Corporation, as applicable, (“CorVel”) provides the mobile software application program and user manual(s) or help files contained therein, and any modifications, updates, revisions, or enhancements thereto received by End User from CorVel (collectively, the "App"), and licenses its use solely pursuant to the terms stated below:
a. End User is granted a nontransferable license to use the App under the terms stated in this Agreement for personal use. End User may not use the App for commercial purposes.

Title and ownership of the App and of the copyright in the App remains with CorVel; b. The App may be used by End User on a single mobile device, which End User owns or uses and for which the App is designed to operate;
c. End User may not make copies, translations, or modifications of or to the App. End User may not alter, obscure, or remove the copyright notice on any copy of the App; d. End User may not assign, sell, distribute, lease, rent, sublicense, or transfer the App or this license or disclose the App to any other person. End User may not reverse-engineer, disassemble, or decompile the App or otherwise attempt to discover the source code or structural framework of the App; and
e. CorVel may terminate this Agreement and the license granted hereunder at any time. This Agreement and the license granted hereunder automatically terminates if End User fails to comply with any provision of this Agreement. End User agrees upon termination to: (i) cease using the App and providing or accessing any data or information by or through the App, and (ii) destroy the App, together with all copies, modifications, and merged portions in any form, including any copy on End User’s mobile device or on any computer.

2. Limited Warranty. The App is provided "AS IS" and with all faults. NO WARRANTIES 56 June 5, 2023 Item 09
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ARE EXPRESSED AND NONE SHALL BE IMPLIED. CORVEL SPECIFICALLY EXCLUDES

ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT. CORVEL DOES NOT WARRANT THAT USE OF THE APP WILL BE UNINTERRUPTED OR ERROR-FREE.

3. Maintenance & Support. The App is maintained by CorVel or its subcontractors. From time to time, CorVel may provide modifications, updates, revisions, or enhancements, all of which are offered pursuant to the terms and conditions of this Agreement. CorVel does not provide support to End Users. All support requests should be directed at End User’s employer or other person responsible to manage End User’s claims and not at CorVel.

4. Consent to use Data. All data or information submitted by End User through the App shall be used by CorVel in accordance with CorVel’s Privacy Policy posted at:
http://www.corvel.com/privacy-policy/

5. Limitations of Liability (End User). IN NO EVENT WILL CORVEL'S LIABILITY FOR

ACTUAL DIRECT DAMAGES ARISING OUT OF THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE APP EXCEED $100. IN NO EVENT WILL CORVEL BE LIABLE

FOR ANY LOST PROFITS, SALES, BUSINESS, DATA, COSTS OF PROCUREMENT OF

SUBSTITUTE GOODS OR SERVICES OR ANY INDIRECT, SPECIAL, INCIDENTAL, OR

CONSEQUENTIAL DAMAGES RESULTING FROM THE USE OF THE APP OR

OTHERWISE ARISING FROM THIS AGREEMENT, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. The parties agree that the above limits represent a reasonable allocation of risk.

6. Governing Law; Exclusive Jurisdiction. This Agreement is governed by the laws of California. End User agrees that the federal or state courts sitting in State of California, shall be the exclusive courts of jurisdiction and venue for any litigation, special proceeding or other proceeding as between the parties that may be brought, or arise out of, or in connection with, or by reason of this Agreement. The United Nations Convention on Contracts for the International Sale of Goods is expressly disclaimed.

7. Indemnification (End User). End User shall defend, indemnify and hold harmless CorVel from and against damages, liabilities and reasonable costs and expenses, including reasonable legal fees arising out of or relating to: (i) End User’s use of the App in violation of the terms of this Agreement, (ii) data or content included in or omitted from content and data input into the App by End User or any other third party using End User’s mobile device, and (iii) any claim by an employee of End User or End User’s insureds brought against CorVel due to the recommendations made by CorVel through the App.

8. Disclaimer. CorVel shall not be responsible or liable for any third party claims arising from the negligent acts, errors, omissions, willful misconduct or fraud caused by End User in connection with its use of the App or otherwise attributable this Agreement.

9. Assignment. End User may not assign any of End User’s rights or delegate any of End User’s obligations under this Agreement without the prior written consent of CorVel. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns.

10. Notice. All notices required to be sent hereunder shall be in writing and shall be deemed 57 June 5, 2023 Item 09
Professional Services Agreement
For Third Party Workers’ Compensation and Claims Administration Services

to have been given when mailed by first class mail to the address listed below.

11. Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will remain in full force.

12. Waiver. The waiver by either party of a breach of any provision of this Agreement or the failure by either party to exercise any right hereunder shall not operate or be construed as a waiver of any subsequent breach of that right or as a waiver of any other right.

13. Export Administration. End User agrees to comply fully with all relevant export laws and regulations of the United States ("Export Laws") to assure that neither the App nor any direct product thereof is (1) exported, directly or indirectly, in violation of Export Laws; or (2) are used for any purposes prohibited by the Export Laws, including, without limitation, nuclear, chemical, or biological weapons proliferation.

14. Entire Agreement. This Agreement shall constitute the complete agreement between the parties and supersede all prior or contemporaneous agreements or representations, written or oral, concerning the subject matter of this Agreement. This Agreement may not be modified or amended except in writing signed by a duly authorized representative of each party; no other act, document, usage or custom shall be deemed to amend or modify this Agreement.

15. Survival. The provisions of Sections 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 shall survive the termination of this Agreement.

Copyrights
Copyright © 2014 CorVel. All rights reserved.

This documentation and the corresponding App are the property of CorVel and are licensed to the user under the terms of this End User License Agreement. Unauthorized use or copying of the App, documentation, or any other associated materials is a violation of state and federal laws. These materials must be returned to CorVel if so demanded. 58 June 5, 2023 Item 09
Adopted: December 6, 1985
Last Amended: July 1, 2019

ADDENDUM A

WORKERS' COMPENSATION

CLAIMS ADMINISTRATION STANDARDS
The following Standards have been adopted by Public Risk Innovation, Solutions, and Management (hereinafter PRISM) in accordance with Article 18(b) of the PRISM Joint Powers Agreement. It is the intent of these Standards to ensure compliance with all applicable Labor Code and California Code of Regulations Sections. In the event that there exists a conflict between the Standards, the Labor Code or the Code of Regulations, the most stringent requirement shall apply.

I. CLAIMS HANDLING - ADMINISTRATIVE
A. Case Load

1. Each claims examiner assigned to the Member should handle a targeted caseload of 150 but not to exceed 165 claims. In situations where caseloads include future medical and medical only claims, these claims shall be counted as 2:1 in the caseload limit.

2. Supervisory personnel should not handle a caseload, although they may handle specific issues or a small number of conflict claims.

B. Case Review and Documentation

1. Documentation shall reflect any significant developments in the file and include a plan of action. Plan of action statements shall be updated at the time of examiner diary review.

2. The examiner shall review indemnity and medical-only files at intervals not to exceed 45 calendar days. Future medical files shall be reviewed at intervals not to exceed 90 calendar days.

3. The supervisor shall review all new claims within 60 calendar days of initial set up and subsequently monitor activity on indemnity files at intervals not to exceed 120 calendar days. Future medical files shall be reviewed by the supervisor at intervals not to exceed 180 calendar days.

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For Third Party Workers' Compensation and Claims Administration Services 59 June 5, 2023 Item 09

4. File contents shall comply with Code of Regulations Sections 10101, 10101.1 and 15400, and be kept in a neat and orderly fashion. If claims are maintained in a paperless system, documents shall be clearly identified (e.g., medical report, WCAB Orders, legal, etc.).

5. Medical Only Claims
a. If a medical-only claim is still open at 90 calendar days, it shall be transferred to an indemnity examiner.
b. If, at any time, it is anticipated there will be indemnity benefits paid, the claim shall be transferred to an indemnity claim type. c. If the medical-only claim remains open at 180 days, the claim shall be converted to an indemnity claim type, unless there is documentation showing that medical treatment will be ending and the claimant will be discharged from care within the next 30 days, or the claimant is only seeking treatment for a bloodborne pathogen exposure protocol.

C. Communication

1. Telephone Inquiries
Return calls shall be made within 1 working day of the original telephone inquiry. All documentation shall reflect these efforts.

2. Incoming Correspondence
All correspondence received shall be clearly stamped with the date of receipt.

3. Return Correspondence
All correspondence requiring a written response shall have such response completed and transmitted within 5 working days of receipt.

4. Ongoing Claimant Contact
On cases involving unrepresented injured workers who are off work, telephone contact shall be made at a minimum of once every 30 days and within 3 working days after discharge from the hospital or outpatient facility following a surgical procedure. This is in addition to nurse case management involvement on claims where nurse case managers are assigned.

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D. Fiscal Handling

1. Fiscal handling for indemnity benefits on active cases shall be balanced with appropriate file documentation on a semi-annual basis and prior to sending a benefit termination notice to verify that statutory benefits are paid appropriately. Balancing is defined as, “an accounting of the periods and amounts due in comparison with what was actually paid”.

2. In cases of multiple losses with the same person, payments shall be made on the appropriate claim file.

E. Medicare Reporting
Mandatory reporting to the Center for Medicaid Services (CMS) shall be completed directly or through a reporting agent in compliance with Section 111 of the Medicare Medicaid and SCHIP Extension Act of 2007 (“MMSEA”). Medicare eligibility shall be documented in the claim file at time of settlement evaluation.

II. CLAIM CREATION
A. Three-Point Contact
Three-point contact shall be conducted on all claims with the nonrepresented injured worker, employer representative and treating physician within 3 working days of receipt of the claim by the third party administrator or self-administered entity. If a nurse case manager is assigned to the claim, initial physician contact may be conducted by either the claims examiner or the nurse case manager. This initial contact should be substantive and clearly documented in the claim file. In the event a party is non-responsive, there shall be evidence of at least three documented attempts to reach the individual.

B. Compensability

1. The initial compensability determination (accept claim, deny claim or delay acceptance pending the results of additional investigation) and the reasons for such a determination shall be made and documented in the file within 14 calendar days of the filing of the claim with the employer. In the event the claim is not received by the third party administrator or self-administered entity within 14 calendar days of the filing of the claim with the employer, the third party administrator or self-administered entity shall make the initial compensability determination within 7 calendar days of receipt of the claim.

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2. Delay of benefit letters shall be mailed in compliance with the Division of Workers’ Compensation (DWC) guidelines. In the event the employer does not provide notice of lost time to the third party administrator or self-administered entity timely to comply with DWC guidelines, the third party administrator or self-administered entity shall mail the benefit letters within 7 calendar days of notification.

3. The final compensability determination shall be made by the claims examiner or supervisor within 90 calendar days of employer receipt of the claim form.

C. AOE/COE Investigation
If a decision is made to delay benefits on a claim, an AOE/COE investigation shall be initiated within 3 working days of the decision to delay. This may include, but is not limited to, assigning out for witness/injured worker statements, initiating the QME/AME process, requesting medical records, etc.

D. Reserves

1. Using the information available at claim file set up, an initial reserve shall be established for the most probable case value.

2. The initial reserve shall be electronically posted to the claim within 14 calendar days of receipt of the claim.

E. Indexing
All claims shall be reported to the Index Bureau at time of initial set up and re-indexed on an as needed basis thereafter. Blood borne pathogen exposure claims are an exception to this requirement.

PRISM maintains membership with the Index Bureau that members can access.

III. CLAIM HANDLING – TECHNICAL
A. Payments

1. Initial Temporary and Permanent Disability Indemnity Payment a. The initial indemnity payment shall be issued to the injured worker within 14 calendar days of knowledge of the injury and disability. In the event the third party administrator or selfadministered entity is not notified of the injury and disability Professional Services Agreement
For Third Party Workers' Compensation and Claims Administration Services 62 June 5, 2023 Item 09

within 14 calendar days of the employer’s knowledge, the third party administrator or self-administered entity shall make payment within 7 calendar days of notification. Initial permanent disability payments shall be issued within 14 calendar days after the date of last payment of temporary disability. Effective 1/1/2013, permanent disability payments shall be issued upon approval of an Award pursuant to Labor Code Section 4650(b)(2). Prior to a PD Award, advances may be due if the employer has not offered the employee a position paying at least 85% of their wages and compensation at time of injury or the employee is not employed in a position paying at least 100% of their wages and compensation at time of injury. This shall not apply with salary continuation.
b. The properly completed DWC Benefit Notice shall be mailed to the employee within 14 calendar days of the first day of disability. In the event the third party administrator or selfadministered entity is not notified of the first day of disability until after 14 calendar days, the DWC Benefit Notice shall be mailed within 7 calendar days of notification.
c. Self-imposed penalty shall be paid on late payments in accordance with Section III. A.7 of this document.
d. Overpayments shall be identified and reimbursed timely where appropriate. The third party administrator or selfadministered entity shall request reimbursement of overpaid funds from the party that received the funds. If necessary, a credit shall be sought as part of any resolution of the claim.

2. Subsequent Temporary and Permanent Disability Payments a. Eligibility for indemnity payments subsequent to the first payment shall be verified, except for established long-term disability.
b. Ongoing indemnity payments shall be paid in accordance with Labor Code Section 4650(c).
c. Subsequent DWC benefit notices shall be issued in
accordance with CCR 9812.
d. Self-imposed penalty shall be paid on late payments in accordance with Section III. A.7 of this document.

3. Final Temporary and Permanent Disability Payments
Professional Services Agreement
For Third Party Workers' Compensation and Claims Administration Services 63 June 5, 2023 Item 09

a. All final indemnity payments shall be issued timely. b. The appropriate DWC benefit notices shall be issued in accordance with CCR 9812.
c. Self-imposed penalty shall be paid on late payments in accordance with Section III. A.7. of this document.

4. Award Payments
a. The claim file shall reflect demonstrated efforts to initiate/batch payments on undisputed Awards,
Commutations, or Compromise and Release agreements
within 10 working days following receipt of the appropriate document, unless the Award indicates payment is due sooner. b. For all claims in the Primary Workers’ Compensation (PWC) Program and/or excess reportable claims, copies of all
Awards shall be provided to PRISM at time of payment.

5. Medical Payments
a. Medical treatment billings (physician, pharmacy, hospital, physiotherapist, etc.) shall be reviewed for correctness, approved for payment and paid within 60 days of receipt. b. The medical provider shall be notified in writing within 30 days of receipt of an itemized bill if a medical bill is contested, denied or incomplete.
c. A bill review process should be utilized whenever possible.

There should be participation in a PPO and/or MPN whenever possible.

6. Injured Worker Reimbursement Expense
a. Reimbursements to injured workers shall be issued within 15 working days of the receipt of the claim for reimbursement. b. Advance travel expense payments shall be issued to the injured worker 10 working days prior to the anticipated date of travel.

7. Penalties
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For Third Party Workers' Compensation and Claims Administration Services 64 June 5, 2023 Item 09

a. Penalties shall be coded so as to be identified as a penalty payment.
b. If the Member utilizes a third party administrator, the Member shall be advised of the assessment of any penalty for delayed payment and the reason thereof, and the administrator’s plans for payment of such penalty, on a monthly basis.
c. If the Member utilizes a third party administrator, the Member, in their contract with the administrator, shall specify who is responsible for specific penalties.

B. Medical Treatment

1. Each Member shall have in place a Utilization Review process as set forth in Labor Code Section 4610.

2. Disputes regarding utilization review determinations shall be resolved using the Independent Medical Review process set forth in Labor Code Section 4610.5.

3. Nurse case managers shall be utilized where appropriate. Rationale for assignment and continued necessity shall be documented in the claim notes at each regular diary review.

4. If enrolled in a Medical Provider Network, the network shall be utilized whenever appropriate.

C. Apportionment

1. Investigation into the existence of apportionment shall be documented.

2. If potential apportionment is identified, all efforts to reduce exposure shall be pursued.

D. Disability Management

1. The third party administrator or self-administered entity shall work proactively to obtain work restrictions and/or a release to full duty on all cases. The TPA or self-administered entity shall notify a designated Member representative immediately upon receipt of temporary work restrictions or a release to full duty, and work closely with the Member to establish a return to work as soon as possible.

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For Third Party Workers' Compensation and Claims Administration Services 65 June 5, 2023 Item 09

2. The third party administrator or self-administered entity shall notify a designated Member representative immediately upon receipt of an employee’s permanent work restrictions so that the Member can determine the availability of alternative, modified or regular work.

3. If there is no response within 20 calendar days, the third party administrator or self-administered entity shall follow up with the designated Member representative.

4. Members shall have in place a process for complying with laws preventing disability discrimination, including Government Code Section 12926.1, which requires an interactive process with the injured worker when addressing a return to work particularly with permanent work restrictions.

5. Third party administrators or self-administered claims professional shall cooperate with members to the fullest extent, in providing medical and other information the member deems necessary for the member to meet its obligations under federal and state disability laws.

E. Supplemental Job Displacement Benefits

1. Supplemental Job Displacement Benefits – Dates of injury on or after 1/1/04 and before 1/1/13: Benefits pursuant to Labor Code Section 4658.5 shall be timely provided. Dates of injury on or after 1/1/13:

Benefits pursuant to Labor Code 4658.7 shall be timely provided.

2. The third party administrator or self-administered entity shall secure the prompt conclusion of SJDB.

F. Reserving

1. Reserves shall be reviewed at regular diary and at time of any significant event, e.g. - surgery, P&S/MMI, return to work, etc., and adjusted accordingly. This review shall be documented in the file regardless of whether a reserve change was made. Where the SIP model does not apply, claims shall be reserved for the most probable value.

2. Indemnity reserves shall reflect actual temporary disability indemnity exposure with 4850 differential listed separately.

3. Permanent disability indemnity exposure shall include life pension reserve if appropriate.

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For Third Party Workers' Compensation and Claims Administration Services 66 June 5, 2023 Item 09

4. Future medical claims shall be reserved in compliance with CCR 15300 (b)(4) allowing adjustment for reductions in the approved medical fee schedule, undisputed utilization review, medically documented non-recurring treatment costs and medically
documented reductions in life expectancy.

5. Allocated expense reserves shall include medical cost containment, legal, investigation, copy service and other related fees.

6. A reserve worksheet shall be utilized and/or detailed rationale substantiating reserve levels shall be documented within the claim file.

G. Resolution of Claim

1. Within 10 working days of receiving medical information indicating that a claim can be finalized, the claims examiner shall begin appropriate action to finalize the claim.

2. Follow up finalization efforts shall continue and be documented at regular diary reviews until resolution is complete.

3. Settlement value shall be documented appropriately utilizing all relevant information.

4. Where settlement includes resolution of future medical for a Medicare beneficiary or an expected Medicare beneficiary, the settlement shall document the strategy to protect Medicare’s secondary payer status.

5. Pursuant to CCR15400.2, claim files with awards for future benefits shall be reviewed for administrative closure two years after the last provision of benefits.

H. Settlement Authority

1. No agreement shall be authorized involving liability, or potential liability, of PRISM without the advance written consent of PRISM.

The member shall be notified of any settlement request submitted to PRISM.

2. The third party administrator shall obtain the Member’s authorization on all settlements or stipulations in excess of the settlement authority provided in any provision of the individual contract between the Member and the claims administrator.

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For Third Party Workers' Compensation and Claims Administration Services 67 June 5, 2023 Item 09

3. Proof of settlement authorization(s) shall be maintained in the claim file.

IV. LITIGATED CASES
The third party administrator or self-administered entity shall establish written guidelines for the handling of litigated cases. The guidelines should, at a minimum, include the points below, which may be adopted and incorporated by reference as "the Guidelines".

1. The third party administrator or self-administered entity shall promptly initiate investigation of issues identified as material to potential litigation. The Member shall be alerted to the need for in-house investigation, or the need for a contract investigator who is acceptable to the Member. The Member shall be kept informed on the scope and results of investigations.

2. The third party administrator or self-administered entity shall, in consultation with the Member, assign defense counsel from a list approved by the Member. Initial referral and ongoing litigation management shall be timely and appropriate. The third party administrator or self-administered entity shall maintain control of the ongoing claim activities.

3. Settlement proposals directed to the Member shall be forwarded by the third party administrator, self-administered entity or defense counsel in a concise and clear written form with a reasoned recommendation. Settlement proposals shall be presented to the Member as directed so as to insure receipt in sufficient time to process the proposal.

4. Knowledgeable Member personnel shall be involved in the preparation for medical examinations and trial, when appropriate or deemed necessary by the Member so that all material evidence and witnesses are utilized to obtain a favorable result for the defense.

5. The third party administrator or self-administered entity shall comply with any reporting requirement of the Member.

V. SUBROGATION

1. In all cases where a third party (other than a Member employee or agent) is responsible for the injury to the employee, attempts to obtain information regarding the identity of the responsible party shall be made within 14 calendar days of recognition of subrogation potential.

Professional Services Agreement
For Third Party Workers' Compensation and Claims Administration Services 68 June 5, 2023 Item 09

2. Once identified, the third party shall be contacted within 14 calendar days with notification of the Member's right to subrogation and the recovery of certain claim expenses.

3. If the third party is a governmental entity, a claim shall be filed with the governing board (or State Board of Control as to State entities) within 6 months of the injury or notice of the injury. If the third party is a nongovernmental entity, a complaint shall be filed in civil court within two years in order to preserve the statute of limitations.

4. Periodic contact shall be made with the responsible party and/or insurer to provide notification of the amount of the estimated recovery to which the Member shall be entitled.

5. If the injured worker brings a civil action against the party responsible for the injury, the claims administrator shall consult with the Member about the value of the subrogation claim and other considerations.

Upon Member authorization, subrogation counsel shall be assigned to file a Lien or a Complaint in Intervention in the civil action.

6. Whenever practical, the claims administrator shall aggressively pursue recovery in any subrogation claim. They should attempt to maximize the recovery for benefits paid, and assert a credit against the injured worker’s net recovery for future benefit payments.

7. Member (and PRISM if applicable) approval is required to waive pursuit of subrogation or agree to a settlement of a third party recovery. This approval shall be documented in the claim file. In cases of self-administered entities, a process shall be documented noting the authority levels within the member organization to waive pursuit of subrogation or agree to a settlement of a third party recovery.

VI. EXCESS COVERAGE
A. Claims meeting the definition of reportable excess workers’ compensation claims as defined by the Memorandum of Coverage Conditions Section shall be reported to PRISM within five working days of the day on which it is known the criterion is met. Utilize the Excess Workers’ Compensation First Report Form available through PRISM’s website.

B. Subsequent reports shall be transmitted to PRISM on a quarterly basis on all indemnity claims and on a semi-annual basis on all future medical claims or sooner if claim activity warrants, or at such other intervals as requested by PRISM, in accordance with Underwriting and Claims Administration Standards. Utilize the Excess Workers’ Compensation Status Report Form Professional Services Agreement
For Third Party Workers' Compensation and Claims Administration Services 69 June 5, 2023 Item 09

available through PRISM’s website, or a comparable form to be approved by PRISM.

C. Reimbursement requests shall be submitted in accordance with PRISM’s reporting and reimbursement procedures on a quarterly or semi-annual basis depending on claims payment activity. Utilize the Excess Workers’ Compensation Claim Reporting and Reimbursement Procedures available through PRISM’s website.

D. A closing report with a copy of any settlement documents not previously sent shall be sent to PRISM.

Following is the history of amendments to this document:

Amended: March 4, 1988
Amended: October 7, 1988
Amended: October 6, 1995
Amended: October 1, 1999
Amended: June 6, 2003
Amended: March 2, 2007
Amended: July 1, 2009
Amended: July 1, 2011
Amended: March 2, 2012
Amended: October 4, 2013
Amended: July 1, 2019
Professional Services Agreement
For Third Party Workers' Compensation and Claims Administration Services 70 June 5, 2023 Item 09
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Council Members Dwight Worden and Dan Quirk, Liaisons to the Lagoon Committee
Prepared by Nestor Machado, Management Analyst
DATE: June 5, 2023
SUBJECT: Lagoon Committee Appointment
REQUESTED ACTION/RECOMMENDATION:

The City Council Liaisons to the Lagoon Committee recommend that the City Council appoint Jeffrey Barnouw to the Lagoon Committee as a voting member to serve a full three-year term starting July 1, 2023, and ending on July 31, 2026.

DISCUSSION/ANALYSIS:

The Lagoon Committee (Committee) is charged with monitoring the preservation and enhancement of the portions of the San Dieguito and Los Penasquitos Lagoons located in the City of Del Mar, as well as any actions outside the City of Del Mar that impact the lagoons.

The Committee participates at both the local and regional level. Regionally, the Committee coordinates with the activities of the San Dieguito River Valley Joint Powers Authority (JPA) and monitors the lagoon’s restoration plan. Locally, the Committee monitors reports on the health of the lagoons, investigates additional public access opportunities, and encourages educational and informational programs to uncover the lagoons’ little-known points of interest.

The Committee also monitors and comments on any and all developments that may impact the lagoons.

There is currently one upcoming vacancy on the Committee due to Bill Michalsky’s term expiration on June 30, 2023. City staff advertised the vacancy, and two Citizen Interest Forms were received during the recruitment period from Bill Michalsky and Jeffrey Barnouw (Attachment A). The Council Liaisons to the Committee have reviewed the applications and recommend that the City Council appoint Jeffrey Barnouw for a full three-year term effective July 1, 2023, and ending on July 31, 2026.

If the recommended appointment is approved by the City Council, the Committee will maintain a full roster. A copy of the current Committee roster is included as Attachment B.

ATTACHMENTS:

Attachment A – Citizen Interest Forms
Attachment B – Current Lagoon Committee Roster
1 June 5, 2023 Item 10
Attachment A 2 June 5, 2023 Item 10
Attachment A 3 June 5, 2023 Item 10
Attachment A 4 June 5, 2023 Item 10
Attachment A 5 June 5, 2023 Item 10
Attachment A 6 June 5, 2023 Item 10
Attachment A 7 June 5, 2023 Item 10
Attachment A 8 June 5, 2023 Item 10
Attachment A 9 June 5, 2023 Item 10
Attachment A 10 June 5, 2023 Item 10
Attachment A 11 June 5, 2023 Item 10
Attachment A 12 June 5, 2023 Item 10
Attachment A 13 June 5, 2023 Item 10
Attachment A 14 June 5, 2023 Item 10
City of Del Mar
Lagoon Committee
Appointing Authority City Council
Position Voting Member
Bill Michalsky
1st Term Jun 17, 2019 - Jun 30, 2023
Appointing Authority City Council
Position Voting Member
Geoffrey I Criqui
1st Term Oct 07, 2019 - Oct 31, 2023
Appointing Authority City Council
Position Voting Member
Udo Wahn
1st Term May 17, 2021 - Oct 31, 2023
Appointing Authority City Council
Position Chair
Jill E. Gartman
1st Term Nov 19, 2019 - Nov 19, 2023
Appointing Authority City Council
Position Voting Member
Robert B Chase
1st Term Oct 19, 2020 - Oct 19, 2024
Appointing Authority City Council
Position Voting Member
Carol Kerridge
2nd Term Feb 07, 2022 - Feb 28, 2025
Board Roster
Lagoon Committee Page 1 of 2
Attachment B 15 June 5, 2023 Item 10
Appointing Authority City Council
Position Secretary
Office/Role Secretary
Karen F Lare
2nd Term Oct 18, 2022 - Oct 31, 2025
Position Voting Member
Julie Kawasaki
2nd Term Feb 01, 2023 - Feb 28, 2026
Appointing Authority City Council
Position At-Large Member (Non-Voting)
Donna Shaw
2nd Term Apr 01, 2023 - Apr 30, 2026
Lagoon Committee Page 2 of 2
Attachment B 16 June 5, 2023 Item 10
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Councilmembers Dave Druker and Dwight Worden,
Human Resources Subcommittee of the City Council
DATE: June 5, 2023
SUBJECT: Recommended Compensation Adjustment Related to the City Manager’s Performance Evaluation
REQUESTED ACTION/RECOMMENDATION:

The City Council Human Resources Subcommittee recommends that the City Council adopt the Resolution (Attachment A) approving changes to the City Manager’s compensation effective December 13, 2022, and updating the Management, Professional, Confidential salary schedule to reflect those changes (Exhibit A to Attachment A).

DISCUSSION/ANALYSIS:

The City Council began the annual process for evaluating the City Manager in April 2023. As part of the evaluation process, the City Council met as a group during closed session to review and discuss the City Manager’s performance for the period December 13, 2021, through December 13, 2022. Through this collaborative effort, the City Council concluded that the City Manager’s overall performance was highly favorable and met the City Council’s expectations.

Below are some examples of the City Manager’s significant accomplishments during the evaluation period:
 Recruitment, retention, and development of highly qualified and motivated staff, including hiring of a new Planning & Development Director and Assistant City Manager among other key staffing positions in the City.
 Maintained a strong and cohesive organizational work culture that is appreciated by employees and has produced a high-volume of quality work citywide.  Achieved significant progress or the completion of several important capital improvement projects for the City including design and permitting for the Riverpath Phase 3, completion of the Tot Lot replacement, design of the Undergrounding Districts 1A and X1A, and completion of the Tewa Undergrounding project. 1 June 5, 2023 Item 11
City Council Agenda Report
Resolution Adjusting the City Manager’s Compensation
June 5, 2023

 Made significant progress or completed several important special projects for the City including efforts toward the development of affordable housing at the Fairgrounds and Re-Adoption of the City’s Housing Element.
 Maintained a balanced Operating and Capital Budget for Fiscal Year 2021-2022 while working to economically recover from the pandemic, and managed resources in an efficient manner resulting in a $1.1 million higher ending General Fund Contingency.  The City Manager’s financial management skills has contributed to the City being in a strong financial position in FY 2022-23, following a few years of significant negative impacts of the COVID-19 pandemic.
 Successfully obtained millions of dollars in local, State and federal grant funds to support important capital and special projects in Del Mar.  Negotiated a new labor agreement with the City’s general employees.  Continued to build strong working relationships with staff; the City Council; leadership at outside agencies such as the San Diego Association of Governments, North County Transit District, and California Coastal Connections, as well as city leaders throughout the County; and most importantly the Del Mar community. Members of the City Council consistently receive positive feedback from the community and others regarding the City Manager’s performance.

As part of the standard annual evaluation process, Human Resources staff conducted a market analysis of city managers salaries across the San Diego region. Based on the results of this research, the City of Del Mar City Manager’s pay is approximately 9% below the regional median. The City Council’s compensation philosophy is to target salaries for all employees between 5-7% of the median.

Additionally, Section 7(c) of the City Manager’s employment agreement provides that:

Upon satisfactory performance, the City Council shall adjust the Manager’s compensation annually (“Annual Adjustment”), which will be based upon the San Diego Regional Consumer Price Index (CPI) as reported by the Bureau of Labor Statistics and regional compensation data, in an amount generally not less than 3% (unless CPI is less than 3%, in which case the increase may be less, consistent with CPI) nor more than 5% (even if CPI exceeds 5%). The City Council has the discretion to implement the Annual Adjustment as a base salary adjustment, one-time bonus, or a combination thereof. The Annual Adjustment will take place annually on Manager’s anniversary date (December 13), and shall be subject to taxes and other required withholdings.

Based on the City Manager’s performance, and regional compensation and CPI data, the Human Resources subcommittee is recommending a 3% base salary increase for the City 2 June 5, 2023 Item 11
City Council Agenda Report
Resolution Adjusting the City Manager’s Compensation
June 5, 2023

Manager, which would be retroactively approved to December 13, 2022, are required by the City Manager’s employment agreement.

FISCAL IMPACT:

Approval of this item will have a $4,200 fiscal impact to the FY 2022-2023 Operating Budget.

However, there is no fiscal action to be taken by the City Council related to this agenda item, as sufficient funds are available in the current fiscal year budget. Funds for all employee salaries, including the City Manager, are included in the proposed FY 2023-24 and FY 2024- 25 Operating and Capital Budget to be considered by the City Council on June 19, 2023.

ENVIRONMENTAL REVIEW:

The proposed City Council action does not constitute a “project” under the definition set forth in the California Environmental Quality Act (CEQA) Guidelines Section 15378 because it will not have a potential to result in a direct or indirect physical change in the environment and is, therefore, not subject to CEQA.

NEXUS TO CITY COUNCIL GOALS AND PRIORITIES:

This is an operational item and not included on the City Council’s list of Goals and Priorities.

ATTACHMENTS:

Attachment A – Resolution Authorizing Compensation Adjustment for City Manager Exhibit A to Attachment A – Amended Management, Professional, Confidential Salary Schedule
3 June 5, 2023 Item 11
RESOLUTION NO. 2023-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DEL

MAR, CALIFORNIA, AUTHORIZING COMPENSATION

ADJUSTMENT FOR ASHLEY JONES AS CITY MANAGER FOR

THE CITY OF DEL MAR AND ADOPTING THE AMENDED

MANAGEMENT, PROFESSIONAL, AND CONFIDENTIAL

SALARY SCHEDULE
WHEREAS, on December 13, 2021, the City, by and through its City Council, appointed Ashley Jones (“City Manager”) to serve as City Manager for the City of Del Mar and entered into an agreement with City Manager for such services (the “Agreement”); and
WHEREAS, the Agreement requires that at least annually the City Council conduct an evaluation of the City Manager’s performance; and
WHEREAS, the Agreement requires that upon satisfactory performance, the City Council shall adjust the City Manager’s compensation annually, based upon regional salary data and the San Diego Regional Consumer Price Index (CPI) in the amount generally not less than 3% nor more than 5%; and
WHEREAS, through the performance evaluation process, which began in April 2023, the City Council determined that the City Manager’s overall performance for period December 13, 2021 through December 13, 2022, was highly favorable and met the City Council’s expectations.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Del Mar, California, that the City Council hereby approves the following:

Section 1: The City Council of the City of Del Mar hereby approves a 3% compensation adjustment to the City Manager’s current base salary, effective December 13, 2022, as provided for in Section 7.C of the employment Agreement; Section 2: The City Council adopts the amended Management, Professional, and Confidential salary schedule as shown in Exhibit A to this resolution.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Del Mar, California, at a Regular Meeting held the 5
th day of June, 2023.
____________________________
Tracy Martinez, Mayor
City of Del Mar
4 June 5, 2023 Item 11
Resolution No. 2023-XX

__________________________
Leslie E. Devaney, City Attorney
City of Del Mar
ATTEST AND CERTIFICATION:

STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

CITY OF DEL MAR
I, NESTOR MACHADO, Acting City Clerk of the City of Del Mar, California, DO HEREBY CERTIFY, that the foregoing is a true and correct copy of Resolution 2023-XX, adopted by the City Council of the City of Del Mar, California, at a Regular Meeting held the 5
th day of June, 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
______________________________________
Nestor Machado, Acting City Clerk
City of Del Mar
5 June 5, 2023 Item 11

CITY OF DEL MAR

MANAGEMENT AND PROFESSIONAL COMPENSATION PLAN
SALARY INCREASE 2.0%

POSITION TITLE RANGE
City Manager* M500 Contract 247,200.00
Assistant City Manager M900 - 207,081.07 157,825.76
Department Directors M850 - 184,893.81 140,915.85
Deputy Directors/Managers M800 - 144,962.79 110,482.63
Finance Officer M780 - 132,611.20 101,068.92
Information Technology Manager II P287 - 129,736.57 98,878.05 Public Works Operations Manager II P287 - 129,736.57 98,878.05 P276 - 116,285.97 88,626.74
Associate Engineer P276 - 116,285.97 88,626.74
Information Technology Manager I P274 - 113,994.67 86,880.44 Senior Management Analyst P274 - 113,994.67 86,880.44
Senior Planner P274 - 113,994.67 86,880.44
Public Works Operations Manager I P274 - 113,994.67 86,880.44 Maintenance & Construction Superintendent I P269 - 108,462.02 82,663.76 Associate Management Analyst P259 - 98,189.25 74,834.42 Associate Planner P259 - 98,189.25 74,834.42
Facilities Supervisor P249 - 88,889.45 67,746.63
-
Management Analyst P244 - 84,575.27 64,458.60
Assistant Planner II P244 - 84,575.27 64,458.60
Assistant Management Analyst P233 - 75,806.82 57,775.77 Parking Enforcement Sergeant P233 - 75,806.82 57,775.77 Lifeguard Sergeant P233 - 75,806.82 57,775.77
Assistant Planner I P229 - 72,848.85 55,521.37
*Amended on 6/5/2023 by Resolution 2023-XX
EFFECTIVE JULY 1, 2022

ANNUAL SALARY
Maintenance & Construction Superintendent II
6 June 5, 2023 Item 11

CITY OF DEL MAR

MANAGEMENT AND PROFESSIONAL COMPENSATION PLAN
SALARY INCREASE 2.0%
POSITION TITLE Grade A B C D E F G H I J K L
Assistant City Manager M900
-Hourly 75.8778 77.7747 79.7191 81.7121 83.7549 85.8487 87.9949 90.1948 92.4497 94.7609 97.1300 99.5582 -Bi-Weekly 6,070.22 6,221.98 6,377.53 6,536.96 6,700.39 6,867.90 7,039.60 7,215.59 7,395.98 7,580.87 7,770.40 7,964.66 -Monthly 13,152.15 13,480.95 13,817.97 14,163.42 14,517.51 14,880.45 15,252.46 15,633.77 16,024.61 16,425.23 16,835.86 17,256.76 -Annual 157,825.76 161,771.40 165,815.69 169,961.08 174,210.11 178,565.36 183,029.49 187,605.23 192,295.36 197,102.75 202,030.32 207,081.07 Department Directors M850
-Hourly 67.7480 69.4417 71.1777 72.9572 74.7811 76.6506 78.5669 80.5311 82.5444 84.6080 86.7232 88.8913 -Bi-Weekly 5,419.84 5,555.34 5,694.22 5,836.58 5,982.49 6,132.05 6,285.35 6,442.49 6,603.55 6,768.64 6,937.85 7,111.30 -Monthly 11,742.99 12,036.56 12,337.48 12,645.91 12,962.06 13,286.11 13,618.27 13,958.72 14,307.69 14,665.38 15,032.02 15,407.82 -Annual 140,915.85 144,438.75 148,049.72 151,750.96 155,544.73 159,433.35 163,419.19 167,504.67 171,692.28 175,984.59 180,384.20 184,893.81 Deputy Directors/Managers* M800
-Hourly 53.1167 54.4446 55.8057 57.2008 58.6308 60.0966 61.5990 63.1390 64.7175 66.3354 67.9938 69.6936 -Bi-Weekly 4,249.33 4,355.57 4,464.45 4,576.07 4,690.47 4,807.73 4,927.92 5,051.12 5,177.40 5,306.83 5,439.50 5,575.49 -Monthly 9,206.89 9,437.06 9,672.98 9,914.81 10,162.68 10,416.75 10,677.17 10,944.09 11,217.70 11,498.14 11,785.59 12,080.23 -Annual 110,482.63 113,244.70 116,075.82 118,977.71 121,952.15 125,000.96 128,125.98 131,329.13 134,612.36 137,977.67 141,427.11 144,962.79 Finance Officer M780
Project Manager II
-Hourly 48.5908 49.8056 51.0507 52.3270 53.6352 54.9761 56.3505 57.7592 59.2032 60.6833 62.2004 63.7554 -Bi-Weekly 3,887.27 3,984.45 4,084.06 4,186.16 4,290.82 4,398.09 4,508.04 4,620.74 4,736.26 4,854.66 4,976.03 5,100.43 -Monthly 8,422.41 8,632.97 8,848.80 9,070.02 9,296.77 9,529.19 9,767.41 10,011.60 10,261.89 10,518.44 10,781.40 11,050.93 -Annual 101,068.92 103,595.66 106,185.55 108,840.19 111,561.19 114,350.22 117,208.98 120,139.20 123,142.68 126,221.25 129,376.78 132,611.20 Information Technology Manager II P287
Public Works Operations Manager II
-Hourly 47.5375 48.7260 49.9441 51.1927 52.4725 53.7843 55.1290 56.5072 57.9199 59.3679 60.8521 62.3734 -Bi-Weekly 3,803.00 3,898.08 3,995.53 4,095.42 4,197.80 4,302.75 4,410.32 4,520.57 4,633.59 4,749.43 4,868.16 4,989.87 -Monthly 8,239.84 8,445.83 8,656.98 8,873.40 9,095.24 9,322.62 9,555.69 9,794.58 10,039.44 10,290.43 10,547.69 10,811.38 -Annual 98,878.05 101,350.00 103,883.75 106,480.85 109,142.87 111,871.44 114,668.23 117,534.93 120,473.31 123,485.14 126,572.27 129,736.57 Maintenance & Construction Superintendent II P276
Project Manager I
-Hourly 42.6090 43.6742 44.7661 45.8852 47.0324 48.2082 49.4134 50.6487 51.9149 53.2128 54.5431 55.9067 -Bi-Weekly 3,408.72 3,493.94 3,581.29 3,670.82 3,762.59 3,856.65 3,953.07 4,051.90 4,153.20 4,257.03 4,363.45 4,472.54 -Monthly 7,385.56 7,570.20 7,759.46 7,953.44 8,152.28 8,356.09 8,564.99 8,779.11 8,998.59 9,223.55 9,454.14 9,690.50 -Annual 88,626.74 90,842.41 93,113.47 95,441.31 97,827.34 100,273.02 102,779.85 105,349.35 107,983.08 110,682.66 113,449.72 116,285.97 Information Technology Manager I P274
Senior Management Analyst
Senior Planner
Public Works Operations Manager I
-Hourly 41.7694 42.8137 43.8840 44.9811 46.1057 47.2583 48.4397 49.6507 50.8920 52.1643 53.4684 54.8051 -Bi-Weekly 3,341.56 3,425.09 3,510.72 3,598.49 3,688.45 3,780.66 3,875.18 3,972.06 4,071.36 4,173.14 4,277.47 4,384.41 -Monthly 7,240.04 7,421.04 7,606.56 7,796.73 7,991.65 8,191.44 8,396.22 8,606.13 8,821.28 9,041.81 9,267.86 9,499.56 -Annual 86,880.44 89,052.45 91,278.77 93,560.73 95,899.75 98,297.25 100,754.68 103,273.54 105,855.38 108,501.77 111,214.31 113,994.67 * Deputy Directors/Managers
Deputy Chief Lifeguard/Community Services Director
Principal Engineer
Environmental Sustainability & Special Projects Manager Finance Manager/City Treasurer
Principal Planner/Planning Manager
Administrative Services Manager/City Clerk
EFFECTIVE JULY 1, 2022
7 June 5, 2023 Item 11

CITY OF DEL MAR

MANAGEMENT AND PROFESSIONAL COMPENSATION PLAN
SALARY INCREASE 2.0%
POSITION TITLE Grade A B C D E F G H I J K L
EFFECTIVE JULY 1, 2022
Maintenance & Construction Superintendent I P269
-Hourly 39.7422 40.7357 41.7541 42.7980 43.8679 44.9646 46.0888 47.2410 48.4220 49.6326 50.8734 52.1452 -Bi-Weekly 3,179.38 3,258.86 3,340.33 3,423.84 3,509.44 3,597.17 3,687.10 3,779.28 3,873.76 3,970.60 4,069.87 4,171.62 -Monthly 6,888.65 7,060.86 7,237.38 7,418.32 7,603.78 7,793.87 7,988.72 8,188.44 8,393.15 8,602.98 8,818.05 9,038.50 -Annual 82,663.76 84,730.35 86,848.61 89,019.83 91,245.32 93,526.46 95,864.62 98,261.23 100,717.76 103,235.71 105,816.60 108,462.02 Associate Management Analyst P259
Associate Planner
-Hourly 35.9781 36.8775 37.7995 38.7445 39.7131 40.7059 41.7236 42.7666 43.8358 44.9317 46.0550 47.2064 -Bi-Weekly 2,878.25 2,950.20 3,023.96 3,099.56 3,177.05 3,256.47 3,337.88 3,421.33 3,506.86 3,594.54 3,684.40 3,776.51 -Monthly 6,236.20 6,392.11 6,551.91 6,715.71 6,883.60 7,055.69 7,232.08 7,412.88 7,598.21 7,788.16 7,982.87 8,182.44 -Annual 74,834.42 76,705.28 78,622.92 80,588.49 82,603.20 84,668.28 86,784.99 88,954.61 91,178.48 93,457.94 95,794.39 98,189.25 Facilities Supervisor P249
-Hourly 32.5705 33.3848 34.2194 35.0749 35.9517 36.8505 37.7718 38.7161 39.6840 40.6761 41.6930 42.7353 -Bi-Weekly 2,605.64 2,670.78 2,737.55 2,805.99 2,876.14 2,948.04 3,021.74 3,097.29 3,174.72 3,254.09 3,335.44 3,418.83 -Monthly 5,645.55 5,786.69 5,931.36 6,079.64 6,231.63 6,387.42 6,547.11 6,710.79 6,878.56 7,050.52 7,226.78 7,407.45 -Annual 67,746.63 69,440.30 71,176.30 72,955.71 74,779.60 76,649.09 78,565.32 80,529.45 82,542.69 84,606.26 86,721.42 88,889.45 Management Analyst P244
Assistant Planner II
-Hourly 30.9897 31.7645 32.5586 33.3725 34.2068 35.0620 35.9386 36.8370 37.7580 38.7019 39.6695 40.6612 -Bi-Weekly 2,479.18 2,541.16 2,604.69 2,669.80 2,736.55 2,804.96 2,875.09 2,946.96 3,020.64 3,096.15 3,173.56 3,252.89 -Monthly 5,371.55 5,505.84 5,643.48 5,784.57 5,929.19 6,077.42 6,229.35 6,385.08 6,544.71 6,708.33 6,876.04 7,047.94 -Annual 64,458.60 66,070.06 67,721.82 69,414.86 71,150.23 72,928.99 74,752.21 76,621.02 78,536.54 80,499.96 82,512.46 84,575.27 Assistant Management Analyst P233
Parking Enforcement Sergeant
Lifeguard Sergeant
-Hourly 27.7768 28.4712 29.1830 29.9126 30.6604 31.4269 32.2126 33.0179 33.8433 34.6894 35.5567 36.4456 -Bi-Weekly 2,222.15 2,277.70 2,334.64 2,393.01 2,452.83 2,514.15 2,577.01 2,641.43 2,707.47 2,775.15 2,844.53 2,915.65 -Monthly 4,814.65 4,935.01 5,058.39 5,184.85 5,314.47 5,447.33 5,583.52 5,723.10 5,866.18 6,012.84 6,163.16 6,317.23 -Annual 57,775.77 59,220.17 60,700.67 62,218.19 63,773.64 65,367.98 67,002.18 68,677.24 70,394.17 72,154.02 73,957.87 75,806.82 Assistant Planner I P229
-Hourly 26.6930 27.3603 28.0443 28.7454 29.4640 30.2006 30.9557 31.7295 32.5228 33.3359 34.1693 35.0235 -Bi-Weekly 2,135.44 2,188.82 2,243.54 2,299.63 2,357.12 2,416.05 2,476.45 2,538.36 2,601.82 2,666.87 2,733.54 2,801.88 -Monthly 4,626.78 4,742.45 4,861.01 4,982.54 5,107.10 5,234.78 5,365.65 5,499.79 5,637.28 5,778.22 5,922.67 6,070.74 -Annual 55,521.37 56,909.40 58,332.14 59,790.44 61,285.20 62,817.33 64,387.77 65,997.46 67,647.40 69,338.58 71,072.05 72,848.85 8 June 5, 2023 Item 11
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Joe Bride, Public Works Director
Karen Falk, Principal Engineer
Mariel Cairns, Management Analyst
Via Ashley Jones, City Manager
DATE: June 5, 2023
SUBJECT: Adoption of Water Shortage Contingency Plan and Introduction of an Ordinance Amending Chapter 21.70 of the Del Mar Municipal Code to Revise Emergency Water Management Water Shortage Response Levels REQUESTED ACTION/RECOMMENDATION:

Staff recommends that the City Council: 1) Adopt the City’s Water Shortage Contingency Plan (WSCP) (Attachment A) and authorize future administrative updates via the City Manager; and 2) Hold a public hearing and introduce an Ordinance (Attachment B) amending the Del Mar Municipal Code (DMMC) Chapter 21.70 to revise water shortage responses to align with the six standard water shortage levels as required by the California Water Code.

BACKGROUND:

Prior to the recent 2023 winter storms, California experienced over three consecutive years of extreme drought, and water reservoirs throughout the state were at record low levels. In October 2021, Governor Gavin Newsom issued a proclamation extending the drought emergency statewide, including San Diego County.

In support of the State’s declared emergency drought, the San Diego County Water Authority (Water Authority) Board of Directors formally activated its WSCP to Level 1 on October 28, 2021. Level 1 response actions included ongoing voluntary water-use efficiency measures and implementation of the WSCP’s communication plan.

On May 24, 2022, the State Water Resources Control Board responded to another drought related executive order from the Governor by requiring water suppliers to implement Level 2 Demand Reduction Measures as identified in the supplier’s WSCP.

The City of Del Mar has been in a Drought Response Stage 1 – Drought Watch Condition since 2016, which remains in effect. In response to the State Water Resources Control 1 June 5, 2023 Item 12
City Council Agenda Report
Water Shortage Contingency Plan and Introduction of Ordinance Amending DMMC 21.70 June 5, 2023

Board and the Water Authority’s directives, the City Council reaffirmed Drought Response Stage 1 on July 11, 2022, to continue to be in effect and urged citizens and business to continue voluntary activities to conserve water by following water demand reduction measures as outlined in Section 21.70.110 of the DMMC.

On March 24, 2023, considering recent winter storms that brought historical rainfall and snowpack levels throughout the state, Governor Newsom issued a new Executive Order N-5-23 to rollback major elements of prior emergency orders related to water restrictions.

Although the recent extraordinary amounts of precipitation have eased drought conditions, long-term water supply continues to remain a concern throughout California.

DISCUSSION/ANALYSIS:

Water Shortage Contingency Plan Adoption
Historically, as a small water supplier with approximately 1,860 service connections, the City of Del Mar was not required to prepare its own WSCP. Instead, the City relied on the Water Authority’s WSCP for guidance related to water conservation and demand reduction measures. However, on September 23, 2021, Senate Bill (SB) 552 was passed to require small water suppliers serving 1,000 to 2,999 service connections to develop and maintain their own abridged WSCP that would include specified proactive water shortage planning elements by July 1, 2023.

In accordance with State requirements, staff developed the City’s WSCP (Attachment A) that migrates the City from previously named “drought response stages” to the six (6) standard water shortage levels as defined by the California Water Code Section 10632.

Staff recommends that the City Council adopt the proposed WSCP in order to comply with statutory requirements. The City will continue to coordinate with the Water Authority and its member agencies and follow the Water Authority’s Communication Plan (Appendix A to Attachment A) in order to efficiently communicate water shortage concerns to our customers.

DMMC Emergency Water Management Amendment
The DMMC Chapter 21.70 on Emergency Water Management currently defines four Drought Response Stages. As written, sections of DMMC are not consistent with the State code and the proposed WSCP and need revision. Approval of the attached ordinance (Attachment B) is required to amend the DMMC to align with State and County defined water shortage levels (Level 1 through 6) and with the City’s WSCP. The proposed DMMC redlined changes are included in this report for the Council’s reference as Attachment C.

Although major water restriction requirements were rolled back with the Governor’s latest Executive Order, all 58 counties in the State still retain a state of emergency to allow drought response and recovery activities to continue. Along with the amendment of DMMC Chapter 21.70, City staff updated the City’s Water Conservation webpage to comply with the Water Authority’s Communication Plan, which is an element of the 2 June 5, 2023 Item 12
City Council Agenda Report
Water Shortage Contingency Plan and Introduction of Ordinance Amending DMMC 21.70 June 5, 2023

WSCP. Pursuant to the Water Authority’s Communication Plan, the City will increase public communication activities to Del Mar’s water users by publishing electronic newsletters, periodically updating the website’s drought information, administrating water waste reporting applications, and providing educational information to encourage water conservation.

PRIOR CITY COUNCIL REVIEW:

On July 11, 2022, the City Council adopted Resolution No. 2022-51 reaffirming Drought Response Stage 1 and encouraging continued voluntary adherence with water demand reduction measures; and adopted Ordinance No. 991 to amend DMMC Sections

21.70.110 and 21.70.120 to revise Drought Watch and Alert Conditions.

On December 13, 2021, the City Council adopted Ordinance No. 984 to amend DMMC Section 21.70.110 to revise consumer demand requirements in accordance with recent State and County actions.

On July 5, 2016, the City Council adopted Resolution No. 2016-42 declaring Drought Response Stage 1 – Drought Watch to be in effect but urging citizens and businesses to continue voluntary efforts to conserve water by following measures adopted during the Stage 2 response in 2015-2016.

FISCAL IMPACT:

There is no fiscal impact or action to be taken by the Council related to this agenda item.

ENVIRONMENTAL IMPACT:

The proposed City Council action does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because it will not have a potential to result in a direct or indirect physical change in the environment and is, therefore, not subject to CEQA. No further action under CEQA is required.

ATTACHMENTS:

Attachment A – Water Shortage Contingency Plan
Appendix A to Attachment A – Water Authority WSCP Communications Plan Attachment B – Ordinance Amending DMMC Chapter 21.70
Exhibit A to Attachment B – Amended DMMC Chapter 21.70
Attachment C – Redlined changes in DMMC Chapter 21.70
3 June 5, 2023 Item 12

ATTACHMENT A
Water Shortage Contingency Plan

CITY OF DEL MAR
1050 Camino Del Mar
Del Mar, CA 92014
Public Water System CA #3710004
Public Review Draft: June 5, 2023
4 June 5, 2023 Item 12
Table of Contents
Section 1: Introduction and Overview ................................................................................ 1 Section 2: Public Involvement ............................................................................................. 1 Section 3: Coordination with San Diego County Water Authority .................................. 1 Section 4: Declaration of Water Shortage Level .............................................................. 2 Section 5: Water Shortage Response Levels ................................................................... 2 WATER SHORTAGE LEVEL 1: WATCH Condition .......................................................... 3 WATER SHORTAGE LEVEL 2: WARNING Condition ..................................................... 3 WATER SHORTAGE LEVEL 3: ACUTE Condition ........................................................... 4 WATER SHORTAGE LEVEL 4: CRITICAL Condition ....................................................... 4 WATER SHORTAGE LEVEL 5: EMERGENCY Condition .............................................. 4 WATER SHORTAGE LEVEL 6: CATASTROPHIC Condition ......................................... 4 Section 6: Communication Plan ........................................................................................ 5 Section 7: Appeals ................................................................................................................ 5 Section 8: Enforcement ........................................................................................................ 5 Section 9: Contact Information ............................................................................................ 6 Appendix A: San Diego County Water Authority Communications Plan ......................... 8 5 June 5, 2023 Item 12
City of Del Mar
Water Shortage Contingency Plan Page 1
Section 1: Introduction and Overview
In order to conserve the available water supply and protect the integrity of public water system (PWS) supply facilities for domestic water use, sanitation, and fire protection, the City of Del Mar has established regulations and restrictions on the delivery and consumption of water during varying water supply conditions through this Water Shortage Contingency Plan (WSCP). The WSCP is intended to protect and preserve public health, welfare, safety, and minimize adverse impacts during a water supply shortage or emergency condition.

Under Senate Bill 552 (SB 552), passed and signed by Governor Gavin Newsom in September 2021, State and local governments will share the responsibility in preparing and acting in the case of a water shortage event. These new requirements are expected to improve the ability of Californians to manage future droughts and help prevent catastrophic impacts on drinking water for communities vulnerable to impacts of climate change. The bill requires small water suppliers to implement more proactive drought planning and be better prepared for future water shortage events or dry years.

SB 552 requires small water suppliers - defined as those with fewer than 3,000 connections and/or serve fewer than 3,000 acre feet per year - to have an abridged water shortage contingency plan, annually report their water supply conditions and monthly usage, and upgrade their infrastructure to drought resilient standards, if needed.

The City of Del Mar provides potable water to approximately 1,890 water connections serving an estimated population of 4,000 people within the City boundary. The City is bordered to the north by Solana Beach, served by Santa Fe Irrigation District, and to the east and south by the City of San Diego.

Section 2: Public Involvement
The City held a public hearing to receive public comments on this WSCP at its City Council meeting on June 5, 2023. At the same time, the City introduced Ordinance XXX to update the Del Mar Municipal Code (DMMC) Chapter 21.70 on Emergency Water Management to align with this WSCP. Final adoption of the Ordinance is proposed to occur at a properly noticed City Council meeting on June 19, 2023.

Section 3: Coordination with San Diego County Water Authority The service area of the City of Del Mar is located within the San Diego County Water Authority (Water Authority) regional water planning area. The Water Authority adopted its 2020 WSCP on May 27, 2021. A copy of this document can be found at https://www.sdcwa.org/wp-content/uploads/2021/08/SDCWA-WSCP-05272021-revJuly-2021-1.pdf. The City’s water demand is included in regional planning efforts completed by the Water Authority and its WSCP was considered in the development of this document.
6 June 5, 2023 Item 12
City of Del Mar
Water Shortage Contingency Plan Page 2
Section 4: Declaration of Water Shortage Level
DMMC Section 21.04.180 authorizes the City Manager to determine and declare that a water shortage emergency exists in any or all parts of the City. DMMC Section 21.70.040 further defines when and how the City Manager or City Council can declare a water shortage emergency and notify the public. During such an emergency, the applicable provisions of this WSCP will be implemented when necessary to protect public health, safety, and welfare.

The City Manager, or designee, shall monitor water supply and/or demand conditions on a monthly basis and shall determine when triggers are reached by conditions that warrant initiation or termination of each level of the WSCP. The triggering and termination criteria considered shall include:
• Water Authority Board of Directors has changed its water shortage response level.
• County, State, or Federal Drought Emergency Orders are issued. • Emergencies such as fire, earthquake, etc. occur, resulting in actual or potential water outages.

Section 5: Water Shortage Response Levels
Water shortage is the gap between available supply and planned demands. To provide a consistent regional and statewide approach to conveying the relative severity of water supply shortage conditions, the 2018 Water Conservation Legislation (SB 606 and AB 1668) mandates that water suppliers plan for six standard water shortage levels. These six levels progressively increase from a shortage of 10%, 20%, 30%, 40%, 50%, and greater than 50% shortage and become increasingly stringent water use restrictions.

The City of Del Mar previously established four drought response stages detailing demand management measures for each stage in DMMC Sections 21.70.110 through

21.70.140. Pursuant to legislation that was adopted in response to recent severe droughts, the City of Del Mar is updating its Municipal Code to move from four to six standard water shortage response levels.

Shortage Level Water Shortage
Range Response Action
1 – Watch Up to 10% Voluntary
2 – Warning Up to 20% Mandatory
3 – Acute Up to 30% Mandatory
4 – Critical Up to 40% Mandatory
5 – Emergency Up to 50% Mandatory
6 – Catastrophic > 50% Mandatory
7 June 5, 2023 Item 12
City of Del Mar
Water Shortage Contingency Plan Page 3
When the City declares that a shortage level is in effect, customers must comply with all regulations contained in the declared level or face a potential penalty. Details of the levels and specifics on what is prohibited under each level are summarized in this section and DMMC. The percentage reduction is calculated and evaluated versus the base year, which the Water Authority establishes for the region based on recent water demand and sources available.

Emergency regulations and other conditions as may be identified by the Governor, State of California, or the Water Authority may require additional mandatory water conservation measures.

WATER SHORTAGE LEVEL 1: WATCH Condition
Target: Achieve a voluntary 10% percent reduction
Level 1 may apply when there is a reasonable probability that there will be water supply shortages and that a consumer demand reduction of up to 10% is required. At this level, restrictions are voluntary, and the City would increase its public education and outreach efforts to encourage customers to take actions to conserve water. Detailed requirements are detailed in DMMC Section 21.70.110.

Some voluntary measures under Level 1 include requests for all persons to:
• Stop hosing down paved surfaces
• Stop water waste and runoff from landscape irrigation • Water before 10 a.m. and after 6 p.m. three times per week, and not within 48 hours of measurable rainfall
• Wash vehicles with a hand-held hose/shut-off nozzle or at a commercial site with recirculated water
• Provide restaurant water refills and hotel laundering only upon request • Repair all leaks within 72 hours of notification
• Use recirculated water to operate ornamental fountains • Use non-potable water for construction purposes when available.

Landscape irrigation restrictions do not apply to micro-irrigation systems such as drip irrigation.

WATER SHORTAGE LEVEL 2: WARNING Condition
Target: Achieve a 20% percent reduction
Level 2 may apply when a consumer demand reduction of up to 20% is necessary. At this level, all the voluntary water use reduction measures in Level 1 become mandatory and additional mandatory water use restrictions may be implemented. Under Level 2 conditions, the City may also implement drought rates at Level 2 as identified in DMMC Section 21.70.120.
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WATER SHORTAGE LEVEL 3: ACUTE Condition
Target: Achieve a 30% percent reduction
Level 3 represents an increased shortage up to 30% due to drought or other supply reductions. At this level, Level 1 and Level 2 restrictions apply and additional mandatory prohibitions are established. Additional mandatory actions established under Level 3 include:
• Further limiting landscape irrigation to two (2) assigned days per week (no more than once per week November through May)
• Requiring leak repair within 48 hours of notification • Stopping all vehicle washing except at commercial car washes that recirculate water.

Landscape irrigation restrictions do not apply to micro-irrigation systems such as drip irrigation.

Under Level 3 conditions, The City may also implement drought rates as identified in DMMC Section 21.70.130.

WATER SHORTAGE LEVEL 4: CRITICAL Condition
Target: Achieve a 40% percent reduction
Level 4 represents an increased shortage up to 40% due to drought or other supply reductions. At this level, Level 1, 2, and 3 restrictions apply, and additional mandatory prohibitions are established.

Under Level 4 conditions, the City may also implement drought rates as identified in DMMC Section 21.70.140.

WATER SHORTAGE LEVEL 5: EMERGENCY Condition
Target: Achieve a 50% Percent Reduction
Level 5 represents an increased shortage up to 50% due to drought or other supply reductions. At this level, Level 1, 2, 3, and 4 restrictions apply, and additional mandatory prohibitions will be established by the City Council and implemented.

WATER SHORTAGE LEVEL 6: CATASTROPHIC Condition
Target: Achieve a Greater Than 50% Percent Reduction
Level 6 represents an increased shortage of greater than 50% due to drought or other supply reductions. At this level, Level 1, 2, 3, 4, and 5 restrictions apply, and additional 9 June 5, 2023 Item 12
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mandatory prohibitions will be established by the City Council and implemented.

Section 6: Communication Plan
The City of Del Mar will regularly provide the public with information about drought conditions and the drought response measures to be implemented in each level. These communication efforts will include, but not be limited to:
• Notice on City website and social media outlets
• Notice in local newspaper, joint messaging with the Water Authority in regional newspapers
• Notice to local Spanish and English-speaking radio stations • Email to utility customer listing
• Direct Mail to each utility customer, in bill or flyer format • County Emergency Messaging text alert
Additionally, the City will coordinate with the Water Authority and its member agencies to efficiently communicate drought concerns to the region. The Water Authority Communication Plan is included as Appendix A as a reference.

Section 7: Appeals
Pursuant to DMMC Section 21.70.050, the City Council may grant a temporary variance for existing water uses prohibited under this Plan if it is determined that failure to grant such variance would cause an emergency condition adversely affecting the health, sanitation, or fire protection for the public or the person requesting such variance.

Section 8: Enforcement
No person shall knowingly or intentionally use water in a manner contrary to any provision of this WSCP or the Del Mar Municipal Code. DMMC Section 21.04.090 establishes enforcement parameters for those that violate conditions established by Section 5 of the WSCP or DMMC.
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Section 9: Contact Information
City of Del Mar Contacts Name & Position Telephone Email Public Works Department
Joe Bride,
Department
Director
858-704-3681 [email protected]
Public Works Department Karen Falk,
Principal Engineer 858-375-9533 [email protected]
Public Works Department Peter Kiefer,
Superintendent 858-704-3676 [email protected]
Public Works Department
Mariel Cairns,
Management
Analyst
858-704-3677 [email protected]
Public Safety Contacts: The City Manager, or designee, shall notify directly the following individuals and entities of restrictions and water shortages, as defined in the subsections below, as appropriate for each response level.

Organization or
Department Name & Position Telephone Email
Fire Department Josh Gorgon,
Fire Chief
911 or
(non-emergency)
858-755-1522
firedepartmentgroup@
delmar.ca.us
22ND District Agricultural
Association -
Fairgrounds
Lewis Hughs,
Facilities
858-792-4217
or (24/7 Security)
858-792-4285
[email protected]
County Office of
Emergency Services General 800-565-3490 [email protected] County of San Diego
Department of
Environmental Health
and Quality Agency
Heather Buonomo,
Director of
Environmental Health
619-379-0773 Heather.Buomono@
sdcounty.ca.gov
County of San Diego
Department of Public
Health Emergency
Preparedness and
Response (PHPR)
Rob Sills,
Director of PHPR 619-285-6434 [email protected] State Water Resources
Control Board
District Engineer
Sean Sterchi,
District Engineer 619-525-4159 [email protected] Critical Water User:

County of San Diego
Library at Del Mar
Polly Cipparrone
Branch Manager, Del
Mar
(858) 755-1666 Polly.Cipparone@
sdcounty.ca.gov
Critical Water User:

Winston School
Kim Kanetis, Director
of Business &
Operations
(858) 259-8155 Kim.Kanetis@
thewinstonschool.org
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Support Services Contacts: The following is a listing of support services that may be appropriate for a water shortage emergency.

Organization or
Department Company & Name Phone Email
Water Hauler Palomar Mountain
Premium Spring Water 760-743-0140
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Appendix A: San Diego County Water Authority Communications Plan 13 June 5, 2023 Item 12
Water Shortage Contingency Plan 9-1 May 2021
Section 9
Communication Plan

9.1 Introduction
The Water Authority and its 24 member agencies conduct communications and outreach about water supplies and water-use efficiency as an ongoing activity during normal supply conditions. However, clear and effective communications between water agencies, the public, public officials and other key stakeholders becomes even more important if supply conditions become abnormal and the Water Authority needs to activate its WSCP. Experience from previous droughts or other demand management periods, along with data from regional public opinion polls, indicate that when there is a need for urgent water conservation, people basically want to know the following:

1. What they need to do – specifically – to save water

2. How much water they need to save and for how long

3. Why they need to save water

4. What water agencies are doing to correct the supply problem or address the situation
While communicating these points may seem simple and straightforward on the surface, in practice the process can be challenging and complex for the Water Authority. The very diverse needs and characteristics of the Water Authority’s member agencies alone puts limits on the scope of messages and tactics that can be applied to the entire region. To further complicate matters, state-imposed regulations on local water districts during droughts or supply shortages have the potential to dictate a wide range of water-saving targets – and thus a variety of needed behaviors – across the region. Experience also has shown it is possible for the state to mandate emergency water savings targets or measures when there is no actual shortage emergency in the region. Finally, if residents and businesses are asked to save water for an extended period of time, their resolve to comply and help water agencies achieve their respective water-use targets can be eroded by a number of factors ranging from impacts to water rates, negative effects to their lifestyle, equity issues or simple “drought fatigue.” These possibilities make it even more difficult for the Water Authority and its member agencies to communicate effectively, avoid confusion and maintain credibility. However, in previous droughts the Water Authority and its member agencies have been able to work together to overcome these obstacles and conduct effective, award-winning outreach campaigns. This section of the WSCP describes the basic communications plan needed to help the Water Authority successfully convey crucial information during all stages of the WSCP.

9.2 Coordination
For the reasons described in Section 9.1, it is vital for the Water Authority’s communications

APPENDIX A
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to be closely coordinated with its member agencies. The Water Authority regularly interacts with its member agencies at several levels to ensure regional messaging and outreach efforts remain appropriate, effective and responsive to member agency needs. These levels include the Joint Public Information Council/Conservation Coordinators (staff level), the Member Agency Managers group (management level) and the Water Authority Board’s Legislation and Public Outreach Committee (Board level). During droughts or other times of limited supply that activate the WSCP, the Water Authority will establish more frequent schedules of updates, reports or discussions at all levels to ensure Water Authority outreach messages and tactics stay in sync with the changing needs of member agencies and their customers. The schedule and timing of these updates may adjust periodically to reflect evolving water shortage conditions or other factors.

During droughts or other situations that create supply shortages, it’s also common for entities outside the San Diego region, such as MWD, the Association of California Water Agencies and DWR, to engage in communication activities that extend into this area. Water Authority outreach staff will also engage in regular contact with these entities to help minimize the potential for their activities to cause local confusion, as well as seek opportunities to leverage these external resources to complement outreach already under way by the Water Authority and its member agencies.

To maximize internal coordination, the Water Authority will convene a “cabinet” of senior management and department executives from across the organization to discuss supply planning, operational, financial and communication issues related to the WSCP as needed.

9.3 Flexibility and Adaptability
The Water Authority’s WSCP includes six distinct levels of potential shortage, along with “normal” conditions when no out-of-the-ordinary water-saving actions are called for. It also includes a “catastrophic” condition when extreme events prompt emergency-oriented watersaving measures to preserve supplies for health and safety. It’s possible for the desired scope of water-saving actions or outcomes to vary widely at each level of the plan. For example, at Level 2 the communication messages, tactics and resources needed to reach a target of 12% would likely be very different than those needed to hit a target of 20%.

In addition, there are many potential communication strategies and tactics that can be deployed to help the Water Authority successfully implement each level of the WSCP. The precise mix of appropriate strategies and tactics is best determined based on a number of factors, including what WSCP level is activated, the specific supply or regulatory circumstances driving that activation, budget availability, seasonal conditions, and other factors.

Because of these potential variations, this communication plan doesn’t dictate every strategy and tactic or the scale of resources that needs to be applied regionally at each level of the WSCP. Rather, this plan includes recommended strategies and tactics that generally match the needs associated with the escalating levels. This is intended to give the Water Authority’s Board and management the flexibility to apply tailored communications approaches that best 15 June 5, 2023 Item 12
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fit the specific goals of the Water Authority and its member agencies at any given point, and the agility to react quickly to any changes in conditions. An outline summarizing recommended actions at each level is at the end of this section of the communication plan in Table 9-1. Specific, customized campaign plans with budgets and timelines will be crafted by the Public Affairs Department when needed to reflect the unique circumstances of any demand management or water shortage situation.

9.4 Key Audiences
The Water Authority needs to communicate with many different stakeholders as part of the WSCP. The intensity of outreach will likely vary with the WSCP level that is active at any given time, but the key audiences for the communication plan are fairly consistent. In general, they include:
• Member agencies
• General public (water consumers)
• Public officials
• Homeowners
• Multi-family property owners/managers
• Commercial-industrial property managers
• Landscape contractors/suppliers
• Business/civic leaders
• High-visibility or high-water-use industries (restaurants, hotels, construction, etc.) • Land-use agencies
• Environmental groups
• Community-based service organizations
• Non-English-speaking populations
• Temporary residents (tourists, college students, etc.) While it’s important to communicate with all of these groups, at times some of these audiences may require higher priority or specialized outreach. Public Affairs staff will coordinate closely with member agencies and solicit feedback from stakeholders as needed to ensure outreach efforts are reaching key audiences.

9.5 Communication Objectives
In general, the communication objectives during the various levels of the WSCP include the following:
• Motivate water users to increase conservation immediately in ways that are consistent with any voluntary or mandatory actions called for at the current level of the WSCP.
• Raise awareness and understanding of the drought, regulatory or other conditions affecting water supplies and the need for increased conservation. 16 June 5, 2023 Item 12
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• Minimize confusion and maintain credibility of water agencies and conservation messages with an appropriate tone that avoids “cry wolf” perception and noncompliance backlash. • Make water users feel appreciated for existing accomplishments in improving their water-use efficiency, and for supporting regional and local investments in water supply reliability.
• Educate regional civic and business leaders, elected officials and the public that the region’s water agencies have greatly improved the region’s water supply reliability by promoting water-use efficiency programs, diversifying water supply sources and investing more than $3.5 billion in alternative supplies and major water infrastructure.
• Prepare the region for escalation (or de-escalation) of the WSCP based on trending supply conditions.
• Ensure all stakeholders believe they are being treated fairly in relationship to other stakeholders.
• Maintain communication effectiveness by soliciting or monitoring feedback from member agencies, key stakeholders and the general public to update or adapt messages or tactics.
• Exit WSCP implementation having demonstrated the effectiveness and value of conservation actions and water supply reliability investments in minimizing impacts to the region’s economy and quality of life.

9.6 Standard Communications
During normal water supply conditions, the Water Authority will engage in standard communications and outreach activities. That means the Water Authority will promote water-use efficiency as a way of life in the San Diego region as part of its regular messaging delivered through the following channels:
• Media relations (pitches, interviews and news releases) • Social media (Twitter, Facebook, YouTube, etc.)
• Websites (sdcwa.org and WaterSmartSD.org)
• E-newsletters
• Speaker’s Bureau presentations
• Community events
• Citizens Water Academy
• Water News Network
During normal conditions, water efficiency will be promoted by sharing water-saving tips that are consistent with any permanent water-use restrictions in effect throughout the San Diego region (by statewide mandate or consensus of all member agencies). It will also be promoted by ongoing marketing of the Water Authority’s array of regional water-use efficiency programs that are designed to help the member agencies achieve their long-term water management targets or goals, as well as promotion of other available water-savings tools and resources (for example, any available MWD-administered programs or SDG&E-funded 17 June 5, 2023 Item 12
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programs).

9.7 Level 1 Strategies and Tactics
This section lists a number of strategies the Water Authority has used to guide successful drought response campaigns in the past and should be considered during Level 1 of the WSCP (up to 10% voluntary conservation).

Recommended Strategies
• Engage member agencies in the development of a regional campaign theme that fits the call for increased conservation and can adapt to changing levels of the WSCP as necessary.
• Send clear, consistent and understandable messages encouraging increased voluntary conservation.
• Develop and maintain a steady stream of media relations activities and social media communications that explain the need to conserve and how to conserve, promote water-use efficiency programs and incentives, and/or give general support for water conservation. Schedule these efforts to provide timely support for water-use efficiency events, strategies and other programs.
• Enhance the level of conservation-oriented community outreach through greater frequency of outreach at community events and speaker’s bureau presentations. • Develop specific outreach efforts that target key industries or groups (hospitality, HOAs, building managers, etc.) to raise awareness of, and participation in, drought response actions and water-use efficiency programs.
• Recruit community and media partners who can expand the reach of drought response communications.
• Establish an online hub for:
- Information on current status of regional WSCP and recommended water conservation practices
- Link to www.WaterSmartSD.org, sdcwa.org or other appropriate website for more water conservation tips, rebates, tools and other resources - Updated information on statewide weather, water supply and/or regulatory conditions
- Information on how the Water Authority and its 24 member agencies are successfully enhancing the region’s water supply reliability through investments in water supply diversification and major infrastructure - Links to member agency websites for retail level information • Regularly communicate with local, state and other elected officials in the region about the importance of achieving voluntary water conservation and encourage them to publicly promote such efforts to their constituents.

Recommended Tactics
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• Member agency communications
- Involve member agencies in development and implementation of communication plan through more frequent JPIC meetings and supplemental communications.
- Provide regular campaign updates to member agency general managers and their designated staff, and Board members.
- Provide campaign outreach materials (newsletter articles, graphics, bill stuffers, etc.) to member agencies for reproduction and distribution. - Encourage member agencies to promote consistent regional messaging and conservation programs to their customers and the public in their service areas.
• News conference or other event to announce/explain change in WSCP level • Water Authority communications (ongoing)
- Media relations
 News releases, advisories, op-eds, etc.
 Media opportunities (pitches, events, in-studio appearances, etc.)  Partnerships
- Website messaging (sdcwa.org and/or WaterSmartSD.org)  Provide links to local agency webpages containing water-use restrictions or other drought instructions/resources for customers  Provide searchable directory of conservation rebates or programs by postal code or street address
 Provide lists of easy, understandable water-saving tips  Provide links to water-savings programs
- E-newsletters
- Social media (Twitter, Facebook, YouTube, etc.)
• Community relations
- Events (water-efficient plant fairs, classes, fairs, garden tours, etc.) - Speakers Bureau presentations
- Community partnerships
 Restaurants
 Hotels/motels
 Local breweries
 San Diego Gas & Electric
 Large employers (public and private)
 Public agencies (Caltrans, San Diego County, etc.)
 Shopping malls (Westfield, Simon Property Group)
 High-traffic destinations (airport, theme parks, San Diego County Fair, etc.)
 Regional gardens (Water Conservation Garden, San Diego Botanic Garden)
- Ethnic outreach (presentations, community events, partnerships) 19 June 5, 2023 Item 12
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• Industry relations
- Targeted outreach to high-water-use industries
• School education
- Modify school assembly program content to include messages about need for increased voluntary conservation.
- Provide other regional water and environmental education programs with key messages about need for increased conservation.
• Government relations outreach
- Encourage elected officials to post links to regional campaign on their websites and promote water conservation tips and program availability at www.WaterSmartSD.org to constituents through newsletters and social media. - Provide conservation information and other support as necessary to government officials for their own media events, hearings, community meetings, etc.
• Advertising
- Execute targeted advertising plans to enhance awareness of need for increased voluntary conservation or spur participation in specific programs or behaviors.
- Coordinate campaign timing/placement with those of other water agencies to leverage available resources (City of San Diego, MWD, Department of Water Resources/Association of California Water Agencies). - Coordinate message tone and content to maximize consistency and minimize confusion; ensure external campaign messages are appropriate for San Diego region.
- Complement ads with public service announcements on local government access channels
• Educational/promotional items that encourage conservation (dye tablets, selfclosing hose nozzles, etc.) • Testing and evaluation
- Use public opinion polls and other opportunities to test messages and tactics and revise as needed to increase effectiveness.

9.8 Level 2 Strategies and Tactics
In the event of a more severe supply shortage or demand management period that requires entering Level 2 of the WSCP (up to 20% mandatory conservation), the Water Authority will continue to deploy or enhance Level 1 strategies and tactics as needed, and will consider supplemental strategies and tactics listed below.

Recommended Strategies
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• Engage member agencies in the development of a more serious campaign message that reflects the need for compliance with mandatory water-use restrictions. Provide visuals and other supporting materials for the campaign to member agencies. • Send clear, consistent and understandable messages regarding mandatory water-use restrictions in effect.
• Enhance media relations activities and social media communications related to water-use restrictions, conservation programs and drought conditions. Schedule these efforts to provide timely support for new campaign initiatives, conservation events and other programs.
• Leverage stakeholder groups’ communication channels to help distribute updated information about restrictions and conservation as soon as possible; groups to include business organizations, civic organizations, service clubs, religious leaders, elected officials, along with key associations governing HOAs, building managers, landscape companies, etc.
• Expand efforts to recruit community and media partners who can expand the reach of drought response communications.
• Enhance the campaign’s current level of grass-roots community outreach with strategies and tactics that encourage more community members to publicly show their support for the campaign (i.e., turn more homeowners, property managers, students, etc. into individual “community partners” promoting increased conservation in neighborhoods around the county)
• Expand drought outreach advertising; continue to coordinate communications and advertising messages and plans with the region’s 24 member agencies, MWD, the state Department of Water Resources, and other agencies. • Consider adjustments to water conservation resources and programs in ways that make finding and participating in key programs easier, or to facilitate short-term water savings. Support these efforts with events to provide information and resources to consumers or other stakeholders.

Recommended Tactics
• Member agency communications
- Involve member agencies in planning and implementing more serious or urgent campaign messaging and activities.
- Supplement regular JPIC meetings with more frequent communications (email updates, etc.) as needed.
• News conference or other event to announce/explain any change in WSCP level - Consider joint announcement with business/civic partners to enhance communitywide buy-in for water-savings actions.
• Water Authority communications (ongoing)
- Websites
 Add “pop-ups” with outreach campaign messages to sdcwa.org and WaterSmartSD.org.
- E-newsletter
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 Ensure drought updates or conservation information are distributed at least twice monthly through WaterSource e-newsletter. - Social media
 Expand community engagement on drought campaign through more involved social media activity (consider neighborhood-based outreach via Nextdoor or other means).
- Regional water-waste reporting app
 Enhance efforts to encourage customers to download and use it to report incidents of water waste directly to member agencies. • Stakeholder outreach
- Provide updated campaign messaging to business groups, service clubs, religious leaders, elected officials to distribute to their own audiences (via newsletter, email, etc.).
- Accelerate outreach efforts to key associations governing HOAs, building managers, landscape companies, etc. to immediately raise awareness of and compliance with mandatory water use restrictions, as well as to update information on available conservation resources.
• Community Partnerships
- Consider adding budget resources to attract more high-value community partnerships
• Government Relations
- Supplement existing activities with in-person briefings to state and local officials on state of water supplies and water conservation campaign. • Advertising
- Execute mass-market regional advertising with involving radio, TV to enhance awareness of needed mandatory water-saving actions. - Continue to coordinate campaign timing/placement with those of other water agencies to leverage available resources (City of San Diego, MWD, Department of Water Resources/Association of California Water Agencies). • Testing and evaluation
- Use public opinion polls or other opportunities to test messages and tactics and revise them as needed to increase effectiveness.

9.9 Level 3-4 Strategies and Tactics
In the event of a more severe supply shortage or demand management period that requires entering Level 3 or 4 of the WSCP (up to 30% or 40% mandatory conservation, respectively), the Water Authority will continue to deploy or enhance Level 2 strategies and tactics as needed, and will consider supplemental strategies and tactics listed below.

Recommended Strategies
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• Engage member agencies in the development of a more serious campaign message that reflects the need for higher level of extraordinary conservation. Provide visuals and other supporting materials for the campaign to member agencies. • Send clear, consistent and understandable messages regarding mandatory water use restrictions in effect and escalating challenges affecting water supplies. • Conduct specialized outreach to landscape industry and water users with large ornamental landscapes to achieve significant reductions in discretionary outdoor water use while minimizing long-term property damage.
• Initiate targeted outreach to major CII water users to help them identify, prepare for and, as much as possible, avoid negative impacts from extreme water conservation requirements.
• Evaluate the appropriateness of continuing to promote long-term water-use efficiency programs and tools amid worsening supply conditions/increasing restrictions.

Recommended Tactics
• Member agency communications
- Involve member agencies in the planning and implementation of updated messages and campaign activities to raise awareness for more extreme water-saving actions and behaviors; provide updated communications materials to member agencies.
• News conference or other event to announce/explain any change in WSCP level - Invite local elected officials to participate to convey need for savings across the region.
• Water Authority communications (ongoing)
- Promote compliance with specific, regionally applicable water-use restrictions.
- Encourage users to check with local water agencies for additional rules or restrictions in effect for their area.
- Provide instructions for triaging landscape resources during extreme shortage conditions (saving trees, etc.).
• Stakeholder outreach
- Reinforce business groups, service clubs, religious leaders, elected officials to spread awareness of need for significant, collective water-saving actions to preserve our economy and quality of life.
- Provide specialized technical assistance sessions or resources to help homeowners achieve immediate reductions in water use while minimizing landscape damage.
- Consider providing specialized technical assistance to large landscape customers (HOAs, cities, schools, etc.) to help achieve large-scale reductions in discretionary outdoor water use.
- Conduct specialized outreach to industries (hospitality, car washes, restaurants, etc.) or other large-scale water users (schools, park and rec 23 June 5, 2023 Item 12
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districts) that will likely experience impacts from emergency conservation to determine solutions for minimizing economic or quality of life impacts. - Add water conservation information/assistance resources to 211 emergency services directory.
• Advertising
- Supplement mass-media campaign to enhance awareness of extreme watersaving actions as needed. • Testing and evaluation
- Use public opinion polls or other opportunities to test messages and tactics, and revise as needed to increase effectiveness.

9.10 Level 5-6 Strategies and Tactics
In the event of a situation that requires entering Level 5 or 6 of the WSCP (up to or greater than 50% mandatory conservation, respectively), the Water Authority will continue to deploy or enhance Level 3-4 strategies and tactics as needed, and will consider supplemental strategies and tactics listed below to reflect increased shortage conditions.

Recommended Strategies
• Engage member agencies in the development of campaign messages and tactics that raise awareness of the extreme shortage conditions facing the region and the likely need to focus water use on essential public health and safety needs. • Send clear, consistent and understandable messages regarding what uses of water or levels of water use remain acceptable for residential, commercial and public water users.
• Emphasize the need for all residents and businesses to work together to help the region successfully weather the situation.
• Raise awareness of any urgent actions being taken by water agencies to improve water supply conditions; provide regular updates on those efforts. • Suspend promotion of ongoing water-use efficiency programs to focus resources on promoting extreme/emergency conservation measures.
• Coordinate with regional emergency response agencies/services on messaging/additional outreach tactics if needed.

Recommended Tactics
• Member agency communications
- Involve member agencies in the planning and implementation of updated messages and campaign activities to raise awareness for water-saving actions and behaviors; provide updated communications materials to member agencies.
• News conference or other event to announce/explain any change in WSCP level; consider joint event with emergency response/public health authorities 24 June 5, 2023 Item 12
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• Water Authority communications
- Encourage users to check with local water agencies for additional rules or restrictions in effect for their area.
- Promote all available resources to aid vulnerable populations. - Provide updates to media and other stakeholders on water supply conditions as often as possible (daily or as needed).
- Evaluate need for “phone bank” or additional staff resources to handle public inquiries.
• Stakeholder outreach
- Provide updated communications materials to business groups, service clubs, religious leaders, elected officials to raise immediate awareness for increased water-savings actions and available assistance resources.

9.11 Catastrophic Shortage Communications
In the event of a natural disaster, infrastructure failure or other situation that requires regional water use to be quickly prioritized for or limited to essential public health and safety needs, the Water Authority will immediately deploy or enhance appropriate communication strategies and tactics from WSCP Levels 1-6 as needed, and will consider strategies and tactics listed below to reflect the need for urgent, emergency-driven water conservation.

Recommended Strategies
• Engage member agencies in the development of campaign messages and tactics that raise awareness of the emergency conditions facing the region and the need to focus water use on essential public health and safety needs.
• Send clear, consistent and understandable messages regarding what uses of water or levels of water use remain acceptable for residential, commercial and public water users, and the expected duration of this restricted level of water use • Emphasize the need for all residents and businesses to work together to help the region successfully weather the situation.
• Raise awareness of any urgent actions being taken by water agencies to improve water supply conditions; provide regular updates on those efforts. • Suspend promotion of ongoing, long-term water-use efficiency programs and tools to focus resources on communicating need for immediate water conservation actions. • Coordinate with local emergency response agencies/services on messaging and outreach tactics where possible.

Recommended Tactics
• Member agency communications
- Involve member agencies in the planning and implementation of updated messages and campaign activities to raise awareness for emergency-level 25 June 5, 2023 Item 12
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water-saving actions and behaviors; provide updated communications materials to member agencies.
• News conference or other event to announce/explain change in WSCP level - Consider joint announcement with emergency response or public health agencies to reflect need for emergency-level water conservation. • Water Authority communications
- Provide specific instructions for acceptable water use during emergency conditions and how long conditions will likely be in effect. - Encourage users to check with local water agencies for additional rules or restrictions in effect for their area.
- Promote all available resources to aid vulnerable populations. - Provide updates to media and other stakeholders on water supply conditions as often as possible (daily or as needed).
- Consider deploying alternate home page on sdcwa.org to emphasize emergency-oriented water conservation actions.
• Stakeholder outreach
- Provide updated communications materials to business groups, service clubs, religious leaders, elected officials to raise immediate awareness for emergency-level water-savings actions and available assistance resources. - Conduct specialized outreach to landscape and related industries with significant outdoor water use to urge immediate end to landscape water use (if required).
- Coordinate dissemination of information regarding water-use restrictions to local law enforcement or other public agencies to help maximize widespread compliance with emergency mandates.
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Table 9-1
General Communication Plan Outline
Normal
Conditions
Level 1
Up to 10%
Voluntary
Conservation
Level 2
Up to 20%
Mandatory
Conservation
Levels 3-4
Up to 30% or 40%
Mandatory
Conservation
Levels 5-6
Up to 50% or
˃50% Mandatory
Conservation
Standard outreach
efforts in effect
(media relations,
social media,
websites, speakers’
bureau, etc.)
Update message
platform to reflect
conditions, Water
Authority response,
and needed actions
from public
Update campaign and
messages to generate
immediate
actions/behaviors by
public
Update campaign and
messages to raise
awareness for more
severe water-saving
actions/behaviors by
public
Update campaign and
messages to reflect
extreme or emergency
condition and likely
need to focus water
use on health/safety
needs
Promote ongoing WUE
programs/tools/
partnerships designed
to achieve long-term
water management
goals (SB X7-7 or
other)
Announce status
change to key
stakeholders, general
public (News release,
social media, etc.)
Announce status
change to key
stakeholders, general
public
(News release, social
media, etc.)
Announce status
change to key
stakeholders, general
public
(News release, social
media, etc.)
Announce status
change to key
stakeholders, general
public
(News release, social
media, etc.)
Standard
coordination with
member agencies
(JPIC meets 6x a year)
Include increased
conservation
messages on
sdcwa.org and in
standard outreach
efforts; provide
regular condition
updates to
stakeholders/media
Supplement Level 1
activities with
additional tactics
(mass media ads,
partnerships, events,
Nextdoor messages,
etc.) as needed;
provide regular
condition updates to
stakeholders/media
Supplement Level 2
outreach with
additional tactics
(supplemental ads,
etc.) as needed;
provide regular
updates to
stakeholders/media
on conditions
Supplement Level 3-4
outreach with
additional tactics
(phone bank/hotline,
etc.) as needed;
provide regular
condition updates to
stakeholders/media
on conditions
Quarterly Board
reports on public
communication and
water-use efficiency
outreach activities
Enhance promotion of
ongoing WUE
programs/tools;
deploy targeted
advertising
Conduct issue
briefings with elected
officials, other key
civic and business
leaders
Conduct specialized
outreach to reduce
discretionary outdoor
use while minimizing
landscape damage
Suspend promotion of
long-term WUE
programs/ tools to
focus on imminent
needs
Increase coordination
with member agencies
(JPIC meets monthly)
Continue promotion of
ongoing WUE
programs/tools
Promote available
water assistance
resources for
vulnerable
populations;
specialized outreach
to impacted industries
Continue enhanced
coordination with
member agencies as
needed (daily or
weekly briefings or
email updates, etc.)
Initiate regular Board
reports on campaign
efforts
Enhance coordination
with member agencies
as needed (weekly
email updates, etc.)
Continue enhanced
coordination with
member agencies as
needed
Analyze water use and
other data to
determine any
appropriate
supplemental actions
Analyze water use and
other data to
determine any
appropriate
supplemental actions
Analyze water use and
other data to
determine any
appropriate
supplemental actions
Analyze water use and
other data to
determine any
appropriate
supplemental actions
27 June 5, 2023 Item 12
San Diego County Water Authority Section 9 – Communication Plan Water Shortage Contingency Plan 9-15 May 2021
Catastrophic Communications
• Implementation of any appropriate strategies and tactics from Levels 1-6 • Shift to messages that reflect emergency condition and need to focus water use on health/safety needs • Potential joint news release/news event with public health officials or incident commanders to announce condition and explain needed actions
• Ensure ongoing coordination with emergency response services with daily advisories or alerts, etc. as needed; provide regular condition updates to stakeholders/media Evaluate posting alternate, emergency-themed website home page 28 June 5, 2023 Item 12

ATTACHMENT B
ORDINANCE NO. XXX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DEL

MAR, CALIFORNIA, AMENDING DEL MAR MUNICIPAL CODE
CHAPTER 21.70 TO REVISE EMERGENCY WATER

MANAGEMENT WATER SHORTAGE STAGES
WHEREAS, water supply conditions have been challenged statewide in California for several years; and
WHEREAS, Chapter 21.70 of the Del Mar Municipal Code (DMMC) establishes an emergency water management program in order to conserve water supplies, minimize the effects of water supply shortages, and allow the City to respond to water emergency conditions; and
WHEREAS, Sections 21.70.110 through 21.70.140 of the DMMC establish emergency water conservation requirements for Drought Response Stage 1 – Drought Watch Condition; Stage 2 – Drought Alert Condition; Stage 3 – Drought Critical condition; and Stage 4 –Drought Emergency Condition; and
WHEREAS, on July 11, 2022, the City Council adopted Resolution No. 2022-51, reaffirming Drought Response Stage 1 (previously declared on July 5, 2016) and encouraging continued voluntary adherence with water demand reduction measures; and adopted Ordinance No. 991 to amend DMMC Sections 21.70.110 and 21.70.120 to revise Drought Watch and Alert Conditions; and
WHEREAS, on March 24, 2023, Governor Newsom issued Executive Order N-5- 23 rolling back major elements of prior drought-related emergency orders in light of improved drought conditions throughout California; however, all 58 counties retain a state of emergency to allow for continued drought response and recovery efforts as long-term water supply continues to remain a concern for California; and WHEREAS, historically, the City of Del Mar, as a small water supplier with approximately 1,860 service connections, was not required to prepare its own Water Shortage Contingency Plan (WSCP) and, instead, relied on the San Diego County Water Authority’s WSCP for guidance related to water conservation and demand reduction measures; and
WHEREAS, on September 23, 2021, Senate Bill (SB) 552 was passed to require small water suppliers serving 1,000 to 2,999 service connections to develop and maintain their own abridged WSCPs that would include specified water shortage planning elements by July 1, 2023; and
WHEREAS, pursuant to the requirements of SB 552, the City of Del Mar has prepared a WSCP, and the City Council has held a public hearing to receive public comments on the WSCP; and
29 June 5, 2023 Item 12
Ordinance No. XXX

WHEREAS, as a result of the City’s WSCP adoption on June 5, 2023, DMMC Chapter 21.70 needs to be amended to align with State and County defined water shortage levels and with the City’s WSCP.

NOW THEREFORE, the City Council of the City of Del Mar, California, hereby ordains as follows:

SECTION ONE:

That Chapter 21.70 of the Del Mar Municipal Code relating to Emergency Water Management of the City of Del Mar is amended to read as set forth in:

Exhibit A to this Ordinance.

SECTION TWO:

This Ordinance was introduced by the City Council on June 5, 2023.

SECTION THREE:

The City Clerk is directed to prepare and have published a summary of this Ordinance no less than five days prior to the consideration of its adoption and again within 15 days following adoption indicating votes cast.

SECTION FOUR:

If any section, subsection, sentence, clause, phrase or portion of this Ordinance is, for any reason, held invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance.

SECTION FIVE:

The Ordinance shall take effect and be in full force thirty (30) days after the date of adoption.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Del Mar, California at the Regular Meeting held this 19h day of June, 2023. ______________________________
Tracy Martinez, Mayor
City of Del Mar
30 June 5, 2023 Item 12
Ordinance No. XXX

APPROVED AS TO FORM:
____________________________
Leslie E. Devaney, City Attorney
City of Del Mar
ATTEST AND CERTIFICATION:

STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

CITY OF DEL MAR
I, NESTOR MACHADO, Acting City Clerk of the City of Del Mar, California, DO HEREBY CERTIFY, that the foregoing is a true and correct copy of Ordinance No. XXX which has been published pursuant to law, and adopted by the City Council of the City of Del Mar, California, at a Regular Meeting held the 19th day of June, 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_______________________________
Nestor Machado, Acting City Clerk
City of Del Mar
31 June 5, 2023 Item 12

EXHIBIT A
TITLE 21 - WATER SUPPLY
Chapter 21.70 EMERGENCY WATER MANAGEMENT
Del Mar, California, Municipal Code Created: 2023-01-30 16:47:07 [EST] (Supp. No. 7)

Chapter 21.70 EMERGENCY WATER MANAGEMENT

21.70.010 Purpose.

This Chapter establishes an emergency water management program in order to conserve water supplies, minimize the effects of water supply shortages, and allow the City to respond to water emergency conditions. (Cal. Const. Art. X, §§ 2 and 7; and Water Code § 375.) (Ord. No. 603; Ord. No. 816; Ord. No. 828; Ord. No. 903)

21.70.020 Scope of Chapter.

The provisions of this Chapter shall apply to all persons using water delivered by the City.

21.70.030 Water Conservation Policy.

A. It is the policy of the City that all public and private users of water delivered by the City shall use such water for reasonable purposes and in a reasonable manner in a conscientious effort to conserve water.

B. When the emergency water use regulations in this Chapter are not declared to be in effect, those regulations may still be considered as recommended methods for voluntarily conserving water.

C. The City may initiate and maintain education programs to encourage the conservation of water.

Cross reference(s)—Water conservation program, Ch. 21.60.

21.70.040 Water Management Regulations.

A. Levels. During water shortages, the City shall impose water use regulations in levels. Sections

21.70.100 et seq. of this Chapter contain a sequential, regulatory program of increasingly more stringent prohibitions on the use of water delivered within the City. When the City declares that a particular water shortage level is in effect, the regulations contained in a declared level shall be complied with by all persons using water delivered by the City.

B. Declaration of Level.

1. The City shall monitor the projected supply of water and the demand for water by persons within its jurisdiction and, in consultation with those agencies providing water to City, determine when water management regulations are required in order for the City to deal with water shortages.

2. When it is determined that a particular level of water management regulation is required, either the City Council or the City Manager may issue a declaration which will announce the level of regulatory management that is to be imposed. Moving to Level 6 requires a properly noticed public hearing.
32 June 5, 2023 Item 12
Created: 2023-01-30 16:47:06 [EST]
(Supp. No. 7)

3. The declaration shall be made by public announcement posted at City Hall. Also, the City Manager may publish a notice of the determination in a newspaper of general circulation and on the City website.

4. If the declaration is made by the City Manager, the matter shall be placed on the agenda of the City Council at its next meeting. The City Council shall thereupon ratify the City Manager's declaration, rescind the declaration, or issue its own declaration.

5. The regulatory level announced in the declaration shall become effective seven days following the date of posting; except, when a water emergency is declared, the regulatory level shall become effective immediately upon posting.

21.70.050 Modification of Regulation as Applied In Special Circumstance.

A. Appeals Board. An Appeals Board for this Chapter shall consist of the City Council.

B. Appeal.

1. Any person subject to the regulations and decisions imposed in accordance with the provisions of this Chapter may submit an appeal, in writing, to the City Clerk.

2. The City Manager may render a decision or set the matter to be heard by the Appeals Board which will render a written decision within 30 calendar days of the receipt of the appeal.

3. If the appellant is dissatisfied with the City Manager's determination, the appellant may seek a review by the Appeals Board.

C. Modification Authorized. In accordance with the procedures provided above, the City Manager and the Appeals Board are authorized to make minor and limited modifications to any regulation in this Chapter when it has been demonstrated that due to special circumstances as applied to a particular case, the application of the unmodified regulation constitutes a threat to health, safety or welfare or will result in an undue, unreasonable hardship. Provided, however, that such modification shall not cause water to be wasted or used in an unreasonable manner and the purposes of this Chapter can be accomplished.

21.70.060 Prohibition.

A. It is unlawful for any person to knowingly use water or permit the use of water supplied by the City in a manner contrary to any provision of this Chapter declared to be in effect. (Misdemeanor in accordance with Water Code § 377.)
B. The use of reclaimed or "grey" water in accordance with the regulations of the Department of Health Services and in accordance with any other applicable regulations, is not subject to the regulations of this Chapter.

C. It is a misdemeanor for anyone to tamper with or otherwise interfere with the operation of a water meter without the express authority, in writing, of the City.

D. It is unlawful for any person to knowingly present false information to the City when information is requested by the City in accordance with the provisions of this Chapter.

E. Compliance with this Section is a condition imposed upon the continued uninterrupted delivery of water.
33 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

21.70.090 Enforcement—Restricting or Discontinuing Water Service.

A. A continued, willful failure to comply with the conditions imposed upon the continued, uninterrupted delivery of water may result in a Notice of Violation being mailed to the metered customer, accompanied by a copy of relevant portions of these regulations.

B. Failure to correct the violation by bringing water use into compliance with the conditions imposed upon the continued, uninterrupted delivery of water will result in a Notice of Hearing Re: Violation being mailed to the metered customer.

C. The City Manager shall conduct the hearing. The noticed person shall have the opportunity to present information and arguments in response to the notice.

D. Following the hearing, if an uncured violation is found to exist, the City Manager may order either:

1. The installation of a flow restrictor in the meter for a minimum of 72 hours; or

2. Discontinuance of water service for a specified period of time.

E. When it is necessary to install a flow restrictor or to discontinue service, a metered customer shall pay a fee of $250.00 to the City. When it is necessary to remove a flow restrictor or to re-establish water service, a metered customer shall pay a fee of $250.00 to the City. The fees referenced in this subparagraph are payable by the metered customer when the service is rendered. Further, payment in full of all outstanding fees is a condition to the restoration of full service.

21.70.110 Water Shortage Level 1—Watch Condition.

A. A Water Shortage Level 1 condition is also referred to as a " Water Storage Watch" condition. Level 1 shall be declared to encourage voluntary water conservation with an aim towards reducing water demand by up to 10%. This Level 1 condition applies when the Water Authority notifies its member agencies to activate the appropriate voluntary provisions of the water shortage contingency plan.

B. When Level 1 is declared and in effect, all persons shall comply with the voluntary water usage reductions and other mandatory conditions as may be identified by the Governor, State of California, or San Diego County Water Authority.

C. Irrigating "Non-Functional Turf" at commercial, industrial, and institutional sites is prohibited. "Non-Functional Turf," as defined in section 996 of title 23 of the California Code of Regulations, as may be amended from time to time, is defined as any turf (grass) that is solely ornamental and not regularly used for human recreational purposes or for civic or community events. "Non-Functional Turf" does not include sports fields and turf that is regularly used for human recreational purposes of for civic or community events.
a. Notwithstanding subsection (C)(1), the use of water is not prohibited by this section to the extent necessary to ensure the health of trees and other perennial non-turf plantings or to the extent necessary to address an immediate health and safety need. b. Notwithstanding subsection (C)(1), the City may approve a request for continued irrigation of non-functional turf where the user certifies that the turf is a low water use plant with a plant factor of 0.3 or less, and demonstrates the actual use is less than 40% of reference evapotranspiration.
34 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

D. Wasteful and Unreasonable Water Uses are prohibited as listed in section 995 of title 23 of the California Code of Regulations to prevent unreasonable use of water and to promote water conservation. The following water usage activities are prohibited:

1. Washing down paved surfaces, including but not limited to sidewalks, driveways, parking lots, tennis courts, or patios, except when it is necessary to alleviate safety or sanitation hazards.

2. Water waste resulting from inefficient landscape irrigation, such as runoff, low head drainage, or overspray, etc. Similarly, irrigation causing water flows onto non-targeted areas, such as adjacent property, non-irrigated areas, hardscapes, roadways, or structures are prohibited.

3. Irrigation is prohibited during and within 48 hours after measurable rainfall of at least onefourth of one inch of rain.

4. Use of a handheld hose equipment without a positive shut-off nozzle to wash vehicles, except where the hose is fitted with a shut-off nozzle. It is encouraged to use a bucket to wash vehicles or at a commercial site with recirculated water.

5. Use of potable water to operate ornamental fountains with exceptions for those fountains that use pumps to recirculate water and only require refilling to replace evaporative losses.

6. Use of potable water for street cleaning or construction purposes, unless non-potable water is unavailable or as-needed to protect the health and safety of the public.

E. In addition to the water usage reductions and other conditions referenced in subsections B, C, and D above, when Level 1 is declared and in effect all persons are requested to comply with the following water demand reduction measures;

1. Irrigate residential and commercial landscape before 10:00 a.m. or after 6:00 p.m.; limited to three applications per week.

2. Serve and re-fill water in restaurants, bars, and other food service establishments only upon request.

3. Offer guests in hotels, motels, and other commercial lodging establishments the option of not laundering towels and linens daily.

4. Repair all water leaks within 72 hours of notification by the City.

Additional Conditions on Uninterrupted Delivery: None.
(Ord. No. 816; Ord. No. 828; Ord. No 948 , § 2, Exh. B, 6-3-2019; Ord. No. 984 , § 1, 12-13-2021; Ord. No. 991 , § 1, 7-11-2022)

21.70.120 Water Shortage Level 2—Warning Condition.

A. Water Shortage Level 2 condition is also referred to as a " Water Shortage Warning" condition.

Level 2 shall be declared when the City determines that water usage should be reduced up to 20 percent from the ordinary demand requirement, as determined by the City.

B. When Level 2 is declared and in effect, metered customers of the City shall receive uninterrupted water delivery subject to the modified surcharge rate structure set as follows:
35 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

Meter
Size
Bimonthly Fixed Surcharge During Water Shortage Level 2:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
⅝" $2.98 $3.14 $3.26 $3.40 $3.64 $3.84
¾" 4.48 4.70 4.90 5.10 5.46 5.76
1" 7.46 7.84 8.16 8.50 9.10 9.58
1 ½" 14.90 15.68 16.30 17.00 18.20 19.14
2" 23.84 25.08 26.08 27.20 29.10 30.64
3" 47.68 50.14 52.16 54.40 58.20 61.26
4" 74.48 78.32 81.48 84.98 90.94 95.70
22nd DAA* 953.24 1,002.48 1,042.94 1,087.64 1,163.98 1,224.84 One 8" meter and two 10" meters
Volumetric Surcharge applied to all units of usage by all customer classes.

Volumetric Surcharge During Water Shortage Level 2:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
$0.23 $0.25 $0.26 $0.27 $0.29 $0.30
C. When Level 2 is declared and in effect, the demand reduction measures listed in Level 1 shall become mandatory. Additional measures may be implemented based on City Council direction or Emergency Orders.
(Ord. No. 816; Ord. No. 828; Ord. No. 903; Ord. No 948 , § 2, Exh. B, 6-3-2019; Ord. No. 991 , § 1, 7-11- 2022)

21.70.130 Water Shortage Level 3— Acute Condition.

A. A Water Shortage Level 3 condition is also referred to as an "Acute Water Shortage" condition.

Level 3 shall be declared when the City determines that water usage should be reduced up to 30 percent from the ordinary demand requirement, as determined by the City.

B. When a Level 3 is declared and in effect, metered customers of the City shall receive uninterrupted water delivery subject to the modified surcharge rate structure set as follows:

Meter Size Bimonthly Fixed Surcharge During Water Shortage Level 3:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
⅝" $4.84 $5.04 $5.26 $5.44 $5.86 $6.20
¾" 7.24 7.56 7.88 8.22 8.78 9.30
1" 12.08 12.60 13.12 13.70 14.62 15.48
1 ½" 24.14 25.18 26.24 27.38 29.24 30.94
2" 38.62 40.28 41.98 43.82 46.80 49.52
3" 77.22 80.54 83.94 87.62 93.58 99.02
4" 120.64 125.84 131.16 136.90 146.20 154.70
22nd DAA* 1,544.08 1,610.52 1,678.80 1,752.30 1,871.32
1,980.06
*One 8" meter and two 10" meters
36 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

Volumetric Surcharge applied to all units of usage by all customer classes.

Volumetric Surcharge During Water Shortage Level 3:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
$0.42 $0.44 $0.46 $0.48 $0.52 $0.55
C. In addition to the water usage reductions and other conditions referenced in Level 1 and Level 2, when Level 3 is declared and in effect all persons are requested to comply with the following water demand reduction measures:

1. Irrigate residential and commercial landscape before 10:00 a.m. or after 6:00 p.m.; limited to two applications per week. Irrigation is prohibited during and within 48 hours after measurable rainfall of at least one-fourth of one inch of rain.

2. Repair all water leaks within 48 hours of notification by the City.

3. Only wash vehicles or at a commercial site with recirculated water. (Ord. No. 816; Ord. No. 828; Ord. No. 903; Ord. No 948 , § 2, Exh. B, 6-3-2019)

21.70.140 Water Shortage Level 4—Critical Condition.

A. A Water Shortage Level 4 condition is also referred to as a " Critical Water Shortage " condition.

Level 4 shall be declared when the City requires a demand reduction of 40 percent in order for the City of Del Mar to have maximum supplies available to meet anticipated demands from the ordinary demand requirement, as determined by the City.

B. When Level 4 is declared and in effect, metered customers of the City shall receive uninterrupted water delivery subject to the modified surcharge rate structure set as follows:

Meter Size Bimonthly Fixed Surcharge During Water Shortage Level 4:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
5/8" $6.64 $6.94 $7.24 $7.56 $8.06 $8.56
3/4" 9.96 10.40 10.86 11.34 12.10 12.84
1" 16.60 17.34 18.10 18.90 20.16 21.38
1 1/2" 33.20 34.68 36.18 37.78 40.30 42.74
2" 53.12 55.48 57.88 60.44 64.48 68.40
3" 106.22 110.94 115.74 120.86 128.94 136.78
4" 165.96 173.34 180.84 188.84 201.46 213.70
22nd DAA* 2,124.18 2,218.54 2,314.68 2,416.94 2,578.68 2,735.28 *One 8" meter and two 10" meters
Volumetric Surcharge applied to all units of usage by all customer classes.

Volumetric Surcharge During Water Shortage Level 4:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
37 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

$0.66 $0.69 $0.72 $0.76 $0.81 $0.86
C. The water usage reductions and other conditions established in Level 1, Level 2, and Level 3 will remain in place. Additional demand reduction measures will be established by the City Council and implemented.
(Ord. No. 816; Ord. No. 828; Ord. No. 903; Ord. No 948 , § 2, Exh. B, 6-3-2019)

21.70.150 Water Shortage Level 5—Emergency Condition.

A. A Water Shortage Level 5 condition is also referred to as a "Water Shortage Emergency" condition. A Level 5 shall be declared when the City requires a demand reduction of 50 percent in order for the City of Del Mar to have maximum supplies available to meet anticipated demands from the ordinary demand requirement, as determined by the City.

B. The water usage reductions and other conditions established in Level 1, Level 2, Level 3, and Level 4 will remain in place. Additional demand reduction measures will be established by the City Council and implemented.

21.70.160 Water Shortage Level 6—Catastrophic Condition.

A. A Water Shortage Response Level 6 condition is also referred to as a "Catastrophic Water Shortage" condition. Level 6 shall be declared when the City declares a water shortage emergency pursuant to California Water Code Section 350 which requires a demand reduction of greater than 50 percent in order for the City of Del Mar to have maximum supplies available to meet anticipated demands from the ordinary demand requirement, as determined by the City.

B. The water usage reductions and other conditions established in Level 1, Level 2, Level 3, Level 4 and Level 5 will remain in place. Additional demand reduction measures will be established by the City Council and implemented.

21.70.170 Wastewater Utility Rates During Water Shortage Conditions.

A. Wastewater customers are billed for sewer service based on their water usage. During water shortage periods, water usage will decline and threaten the fiscal stability of the wastewater utility. Therefore, during water shortage periods, wastewater charges will be calculated based on the assumption that sewer usage is the same as the commensurate month from the last nondrought fiscal year. Drought sewer charges will be lifted after one full year of non-drought consumption records can be established.

1. Residential. Sewer discharges will be estimated based on the assumed sewage usage during the last non-drought year.

2. Commercial. Sewer discharges will be estimated based on 90 percent of the water usage during the last non-drought year. A user may petition to have their sewer discharge (water usage) assumption lowered if their annual water demand drops below their non-drought 38 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

water demands by a level below the drought reduction levels plus an additional 20 percent.

As a user can meet the previously defined criteria, their sewage discharge assumptions will be lowered to the current water demands, adding back any water savings required under the drought requirements. As an example, if the drought reductions are 20 percent, and the user drops their water consumption by 45 percent, then the resulting sewer will be calculated based on 120 percent of the current water consumption.

3. Fairgrounds. Sewer commodity charges during drought conditions will be calculated based on the greater of (1) the rolling average of the past same bimonthly period during the last three fiscal years or (2) the actual metered sewage.
(Ord. No 948 , § 2, Exh. B, 6-3-2019)

21.70.180 Additional Conditions on Uninterrupted Delivery.

In accordance with California Government Code § 53756, the rates posted above will be adjusted accordingly to account for any increases in the purchase cost of wholesale water, or increases in inflationary measure.
39 June 5, 2023 Item 12

ATTACHMENT C
TITLE 21 - WATER SUPPLY
Chapter 21.70 EMERGENCY WATER MANAGEMENT
Del Mar, California, Municipal Code Created: 2023-01-30 16:47:07 [EST] (Supp. No. 7)

Chapter 21.70 EMERGENCY WATER MANAGEMENT

21.70.010 Purpose.

This Chapter establishes an emergency water management program in order to conserve water supplies, minimize the effects of water supply shortages, and allow the City to respond to water emergency conditions. (Cal. Const. Art. X, §§ 2 and 7; and Water Code § 375.) (Ord. No. 603; Ord. No. 816; Ord. No. 828; Ord. No. 903)

21.70.020 Scope of Chapter.

The provisions of this Chapter shall apply to all persons using water delivered by the City.

21.70.030 Water Conservation Policy.

A. It is the policy of the City that all public and private users of water delivered by the City shall use such water for reasonable purposes and in a reasonable manner in a conscientious effort to conserve water.

B. When the emergency water use regulations in this Chapter are not declared to be in effect, those regulations may still be considered as recommended methods for voluntarily conserving water.

C. The City may initiate and maintain education programs to encourage the conservation of water.

Cross reference(s)—Water conservation program, Ch. 21.60.

21.70.040 Water Management Regulations.

A. StagesLevels. During water shortages, the City shall impose water use regulations in levelsstages.

Sections 21.70.100 et seq. of this Chapter contain a sequential, regulatory program of increasingly more stringent prohibitions on the use of water delivered within the City. When the City declares that a particular water management shortage levelstage is in effect, the regulations contained in a declared levelstage shall be complied with by all persons using water delivered by the City.

B. Declaration of LevelStage.

1. The City shall monitor the projected supply of water and the demand for water by persons within its jurisdiction and, in consultation with those agencies providing water to City, determine when water management regulations are required in order for the City to deal with water shortages.

2. When it is determined that a particular levelstage of water management regulation is required, either the City Council or the City Manager may issue a declaration which will announce the levelstage of regulatory management that is to be imposed. Moving to Level 6 requires a properly noticed public hearing.
40 June 5, 2023 Item 12
Created: 2023-01-30 16:47:06 [EST]
(Supp. No. 7)

3. The declaration shall be made by public announcement posted at City Hall. Also, the City Manager may publish a notice of the determination notice shall be published a minimum of three consecutive times in a newspaper of general circulation and on the City website.

4. If the declaration is made by the City Manager, the matter shall be placed on the agenda of the City Council at its next meeting. The City Council shall thereupon ratify the City Manager's declaration, rescind the declaration, or issue its own declaration.

5. The regulatory levelstage announced in the declaration shall become effective seven days following the date of posting; except, when a water emergency is declared, the regulatory levelStage shall become effective immediately upon posting.

21.70.050 Modification of Regulation as Applied In Special Circumstance.

A. Appeals Board. An Appeals Board for this Chapter shall consist of the City Council.

B. Appeal.

1. Any person subject to the regulations and decisions imposed in accordance with the provisions of this Chapter may submit an appeal, in writing, to the City Clerk.

2. The City Manager may render a decision or set the matter to be heard by the Appeals Board which will render a written decision within 30 calendar days of the receipt of the appeal.

3. If the appellant is dissatisfied with the City Manager's determination, the appellant may seek a review by the Appeals Board.

C. Modification Authorized. In accordance with the procedures provided above, the City Manager and the Appeals Board are authorized to make minor and limited modifications to any regulation in this Chapter when it has been demonstrated that due to special circumstances as applied to a particular case, the application of the unmodified regulation constitutes a threat to health, safety or welfare or will result in an undue, unreasonable hardship. Provided, however, that such modification shall not cause water to be wasted or used in an unreasonable manner and the purposes of this Chapter can be accomplished.

21.70.060 Prohibition.

A. It is unlawful for any person to knowingly use water or permit the use of water supplied by the City in a manner contrary to any provision of this Chapter declared to be in effect. (Misdemeanor in accordance with Water Code § 377.)
B. The use of reclaimed or "grey" water in accordance with the regulations of the Department of Health Services and in accordance with any other applicable regulations, is not subject to the regulations of this Chapter.

C. It is a misdemeanor for anyone to tamper with or otherwise interfere with the operation of a water meter without the express authority, in writing, of the City.

D. It is unlawful for any person to knowingly present false information to the City when information is requested by the City in accordance with the provisions of this Chapter. 41 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

E. Compliance with this Section is a condition imposed upon the continued uninterrupted delivery of water.

21.70.090 Enforcement—Restricting or Discontinuing Water Service.

A. A continued, willful failure to comply with the conditions imposed upon the continued, uninterrupted delivery of water may result in a Notice of Violation being mailed to the metered customer, accompanied by a copy of relevant portions of these regulations.

B. Failure to correct the violation by bringing water use into compliance with the conditions imposed upon the continued, uninterrupted delivery of water will result in a Notice of Hearing Re: Violation being mailed to the metered customer.

C. The City Manager shall conduct the hearing. The noticed person shall have the opportunity to present information and arguments in response to the notice.

D. Following the hearing, if an uncured violation is found to exist, the City Manager may order either:

1. The installation of a flow restrictor in the meter for a minimum of 72 hours; or

2. Discontinuance of water service for a specified period of time.

E. When it is necessary to install a flow restrictor or to discontinue service, a metered customer shall pay a fee of $250.00 to the City. When it is necessary to remove a flow restrictor or to re-establish water service, a metered customer shall pay a fee of $250.00 to the City. The fees referenced in this subparagraph are payable by the metered customer when the service is rendered. Further, payment in full of all outstanding fees is a condition to the restoration of full service.

21.70.110 Water Shortage Demand Management/Drought Response Stage Level 1—Drought Watch Condition.

A. A Water Shortage Demand Management/Drought Response Stage Level 1 condition is also referred to as a "Drought Water Storage Watch" condition. A Stage Level 1 shall be declared to encourage voluntary water conservation with an aim towards reducing water demand by up to 10%. This Stage Level 1 condition applies when the Water Authority notifies its member agencies to activate the appropriate voluntary provisions of the water shortage contingency plan.

B. When Stage Level 1 is declared and in effect, all persons shall be urged to comply, on a voluntary basis, with the voluntary water usage reductions and other mandatory conditions as may be identified by the Governor, State of California, or San Diego County Water Authority.

C. Irrigating "Non-Functional Turf" at commercial, industrial, and institutional sites is prohibited. "Non-Functional Turf," as defined in section 996 of title 23 of the California Code of Regulations, as may be amended from time to time, is defined as any turf (grass) that is solely ornamental and not regularly used for human recreational purposes or for civic or community events. "Non-Functional Turf" does not include sports fields and turf that is regularly used for human recreational purposes of for civic or community events.
a. Notwithstanding subsection (C)(1), the use of water is not prohibited by this section to the extent necessary to ensure the health of trees and other perennial non-turf plantings or to the extent necessary to address an immediate health and safety need. 42 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

b. Notwithstanding subsection (C)(1), the City may approve a request for continued irrigation of non-functional turf where the user certifies that the turf is a low water use plant with a plant factor of 0.3 or less, and demonstrates the actual use is less than 40% of reference evapotranspiration.

D. Wasteful and Unreasonable Water Uses are prohibited as listed in section 995 of title 23 of the California Code of Regulations to prevent unreasonable use of water and to promote water conservation. The following water usage activities are prohibited:

1. Washing down paved surfaces, including but not limited to sidewalks, driveways, parking lots, tennis courts, or patios, except when it is necessary to alleviate safety or sanitation hazards.

2. Water waste resulting from inefficient landscape irrigation, such as runoff, low head drainage, or overspray, etc. Similarly, irrigation causing water flows onto non-targeted areas, such as adjacent property, non-irrigated areas, hardscapes, roadways, or structures are prohibited.

3. Irrigation is prohibited during and within 48 hours after measurable rainfall of at least onefourth of one inch of rain.

4. Use of a handheld hose equipment without a positive shut-off nozzle to wash vehicles, except where the hose is fitted with a shut-off nozzle. It is encouraged to use a bucket to wash vehicles or at a commercial site with recirculated water.

5. Use of potable water to operate ornamental fountains with exceptions for those fountains that use pumps to recirculate water and only require refilling to replace evaporative losses.

6. Use of non-potable water for street cleaning or construction purposes, unless non-potable water is when unavailable or as-needed to protect the health and safety of the public.

E. In addition to the water usage reductions and other conditions referenced in subsections B, C, and D above, when Stage Level 1 is declared and in effect all persons are requested to comply with the following water demand reduction measures;

1. Irrigating "Non-Functional Turf" at commercial, industrial, and institutional sites is prohibited. "Non-Functional Turf," as defined in section 996 of title 23 of the California Code of Regulations, as may be amended from time to time, is defined as any turf (grass) that is solely ornamental and not regularly used for human recreational purposes or for civic or community events. "Non-Functional Turf" does not include sports fields and turf that is regularly used for human recreational purposes of for civic or community events. a. Notwithstanding subsection (C)(1), the use of water is not prohibited by this section to the extent necessary to ensure the health of trees and other perennial non-turf plantings or to the extent necessary to address an immediate health and safety need. b. Notwithstanding subsection (C)(1), the City may approve a request for continued irrigation of non-functional turf where the user certifies that the turf is a low water use plant with a plant factor of 0.3 or less, and demonstrates the actual use is less than 40% of reference evapotranspiration.

2. Stop washing down paved surfaces, including but not limited to sidewalks, driveways, parking lots, tennis courts, or patios, except when it is necessary to alleviate safety or sanitation hazards.
43 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

3. Stop water waste resulting from inefficient landscape irrigation, such as runoff, low head drainage, or overspray, etc. Similarly, stop water flows onto non-targeted areas, such as adjacent property, non-irrigated areas, hardscapes, roadways, or structures.

43. Irrigate residential and commercial landscape before 10:00 a.m. or after 6:00 p.m.; limited to three applications per week. Irrigation is prohibited during and within 48 hours after measurable rainfall of at least one-fourth of one inch of rain.

54. Use a handheld hose equipment with positive shut-off nozzle and bucket to wash vehicles or at a commercial site with recirculated water.

62. Serve and re-fill water in restaurants, bars, and other food service establishments only upon request.

73. Offer guests in hotels, motels, and other commercial lodging establishments the option of not laundering towels and linens daily.

84. Repair all water leaks within 72 hours of notification by the City.

9. Use re-circulated water to operate ornamental fountains.

10. Use non-potable water for construction purposes when available.

Additional Conditions on Uninterrupted Delivery: None.
(Ord. No. 816; Ord. No. 828; Ord. No 948 , § 2, Exh. B, 6-3-2019; Ord. No. 984 , § 1, 12-13-2021; Ord. No. 991 , § 1, 7-11-2022)

21.70.120 Demand Management/DroughtWater Shortage Response Stage Level 2—Drought Alert Warning Condition.

A. Demand Management/Drought Response Water Shortage Stage Level 2 condition is also referred to as a "Drought Water Shortage AlertWarning" condition. A Stage Level 2 shall be declared when the City determines that water usage should be reduced up to 20 percent from the ordinary demand requirement, as determined by the City.

B. When LevelStage 2 is declared and in effect, metered customers of the City shall receive uninterrupted water delivery subject to the modified surcharge rate structure set as follows:

Meter
Size
Bimonthly Fixed Surcharge During Demand Management/DroughtWater Shortage Level 2:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
⅝" $2.98 $3.14 $3.26 $3.40 $3.64 $3.84
¾" 4.48 4.70 4.90 5.10 5.46 5.76
1" 7.46 7.84 8.16 8.50 9.10 9.58
1 ½" 14.90 15.68 16.30 17.00 18.20 19.14
2" 23.84 25.08 26.08 27.20 29.10 30.64
3" 47.68 50.14 52.16 54.40 58.20 61.26
4" 74.48 78.32 81.48 84.98 90.94 95.70
22nd DAA* 953.24 1,002.48 1,042.94 1,087.64 1,163.98 1,224.84 One 8" meter and two 10" meters
44 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

Volumetric Surcharge applied to all units of usage by all customer classes.

Volumetric Surcharge During Demand Management/Drought PeriodsWater Shortage Level 2:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
$0.23 $0.25 $0.26 $0.27 $0.29 $0.30
C. When Stage Level 2 is declared and in effect, the demand reduction measures listed in Stage Level 1 shall become mandatory. Additional measures may be implemented based on City Council direction or Emergency Orders.
(Ord. No. 816; Ord. No. 828; Ord. No. 903; Ord. No 948 , § 2, Exh. B, 6-3-2019; Ord. No. 991 , § 1, 7-11- 2022)

21.70.130 Demand Management/DroughtWater Shortage Response Stage Level 3— Acute Drought Critical Condition.

A. A Demand Management/Drought Water Shortage Response Stage Level 3 condition is also referred to as an "Acute Water ShortageDrought Critical" condition. Stage Level 3 shall be declared when the City determines that water usage should be reduced up to 40 30 percent from the ordinary demand requirement, as determined by the City.

B. When a Level Stage 3 is declared and in effect, metered customers of the City shall receive uninterrupted water delivery subject to the modified surcharge rate structure set as follows:

Meter Size Bimonthly Fixed Surcharge During Demand Management/DroughtWater Shortage Level 3:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
⅝" $4.84 $5.04 $5.26 $5.44 $5.86 $6.20
¾" 7.24 7.56 7.88 8.22 8.78 9.30
1" 12.08 12.60 13.12 13.70 14.62 15.48
1 ½" 24.14 25.18 26.24 27.38 29.24 30.94
2" 38.62 40.28 41.98 43.82 46.80 49.52
3" 77.22 80.54 83.94 87.62 93.58 99.02
4" 120.64 125.84 131.16 136.90 146.20 154.70
22nd DAA* 1,544.08 1,610.52 1,678.80 1,752.30 1,871.32
1,980.06
*One 8" meter and two 10" meters
Volumetric Surcharge applied to all units of usage by all customer classes.

Volumetric Surcharge During Demand Management/Drought PeriodsWater Shortage Level 3:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
$0.42 $0.44 $0.46 $0.48 $0.52 $0.55
45 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

C. In addition to the water usage reductions and other conditions referenced in Level 1 and Level 2, when Level 3 is declared and in effect all persons are requested to comply with the following water demand reduction measures:

1. Irrigate residential and commercial landscape before 10:00 a.m. or after 6:00 p.m.; limited to two applications per week. Irrigation is prohibited during and within 48 hours after measurable rainfall of at least one-fourth of one inch of rain.

2. Repair all water leaks within 48 hours of notification by the City.

3. Only wash vehicles or at a commercial site with recirculated water. (Ord. No. 816; Ord. No. 828; Ord. No. 903; Ord. No 948 , § 2, Exh. B, 6-3-2019)

21.70.140 Demand Management/Drought ResponseWater Shortage Stage Level 4—Water Shortage Critical Drought Emergency Condition.

A. A Demand Management/Drought Response Water Shortage Stage Level 4 condition is also referred to as a " Critical DroughtWater Shortage Emergency" condition. A StageLevel 4 shall be declared when the City declares a water shortage emergency pursuant to California Water Code Section 350 which requires a demand reduction of more than 40 percent in order for the City of Del Mar to have maximum supplies available to meet anticipated demands from the ordinary demand requirement, as determined by the City.

B. When a StageLevel 4 is declared and in effect, metered customers of the City shall receive uninterrupted water delivery subject to the modified surcharge rate structure set as follows:

Meter Size Bimonthly Fixed Surcharge During Demand Management/DroughtWater Shortage Level 4:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
5/8" $6.64 $6.94 $7.24 $7.56 $8.06 $8.56
3/4" 9.96 10.40 10.86 11.34 12.10 12.84
1" 16.60 17.34 18.10 18.90 20.16 21.38
1 1/2" 33.20 34.68 36.18 37.78 40.30 42.74
2" 53.12 55.48 57.88 60.44 64.48 68.40
3" 106.22 110.94 115.74 120.86 128.94 136.78
4" 165.96 173.34 180.84 188.84 201.46 213.70
22nd DAA* 2,124.18 2,218.54 2,314.68 2,416.94 2,578.68 2,735.28 *One 8" meter and two 10" meters
Volumetric Surcharge applied to all units of usage by all customer classes.

Volumetric Surcharge During Demand Management/Drought PeriodsWater Shortage Level 4:
7/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24
$0.66 $0.69 $0.72 $0.76 $0.81 $0.86
46 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

C. The water usage reductions and other conditions established in Level 1, Level 2, and Level 3 will remain in place. Additional demand reduction measures will be established by the City Council and implemented.
(Ord. No. 816; Ord. No. 828; Ord. No. 903; Ord. No 948 , § 2, Exh. B, 6-3-2019)

21.70.150 Water Shortage Level 5—Emergency Condition.

A. A Water Shortage Level 5 condition is also referred to as a "Water Shortage Emergency" condition. A Level 5 shall be declared when the City requires a demand reduction of 50 percent in order for the City of Del Mar to have maximum supplies available to meet anticipated demands from the ordinary demand requirement, as determined by the City.

B. The water usage reductions and other conditions established in Level 1, Level 2, Level 3, and Level 4 will remain in place. Additional demand reduction measures will be established by the City Council and implemented.

21.70.160 Water Shortage Level 6—Catastrophic Condition.

A. A Water Shortage Response Level 6 condition is also referred to as a "Catastrophic Water Shortage" condition. Level 6 shall be declared when the City declares a water shortage emergency pursuant to California Water Code Section 350 which requires a demand reduction of greater than 50 percent in order for the City of Del Mar to have maximum supplies available to meet anticipated demands from the ordinary demand requirement, as determined by the City.

B. The water usage reductions and other conditions established in Level 1, Level 2, Level 3, Level 4 and Level 5 will remain in place. Additional demand reduction measures will be established by the City Council and implemented.

21.70.1570 Wastewater Utility Rates During Demand Management/DroughtWater Shortage Conditions.

A. Wastewater customers are billed for sewer service based on their water usage. During demand management/drought water shortage periods, water usage will decline and threaten the fiscal stability of the wastewater utility. Therefore, during demand management/drought water shortage periods, wastewater charges will be calculated based on the assumption that sewer usage is the same as the commensurate month from the last non-drought fiscal year. Drought sewer charges will be lifted after one full year of non-drought consumption records can be established.

1. Residential. Sewer discharges will be estimated based on the assumed sewage usage during the last non-drought year.

2. Commercial. Sewer discharges will be estimated based on 90 percent of the water usage during the last non-drought year. A user may petition to have their sewer discharge (water 47 June 5, 2023 Item 12
Created: 2023-01-30 16:47:07 [EST]
(Supp. No. 7)

usage) assumption lowered if their annual water demand drops below their non-drought water demands by a level below the drought reduction levels plus an additional 20 percent.

As a user can meet the previously defined criteria, their sewage discharge assumptions will be lowered to the current water demands, adding back any water savings required under the drought requirements. As an example, if the drought reductions are 20 percent, and the user drops their water consumption by 45 percent, then the resulting sewer will be calculated based on 120 percent of the current water consumption.

3. Fairgrounds. Sewer commodity charges during drought conditions will be calculated based on the greater of (1) the rolling average of the past same bimonthly period during the last three fiscal years or (2) the actual metered sewage.
(Ord. No 948 , § 2, Exh. B, 6-3-2019)

21.70.160180 Additional Conditions on Uninterrupted Delivery.

In accordance with California Government Code § 53756, the rates posted above will be adjusted accordingly to account for any increases in the purchase cost of wholesale water, or increases in inflationary measure.
48 June 5, 2023 Item 12
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Amanda Lee, Principal Planner
Jennifer Gavin, Associate Planner
Karen Brindley, Planning and Community Development Director Via Ashley Jones, City Manager
DATE: June 5, 2023
SUBJECT: Introduction of an Ordinance to Amend Prospective Ordinance No. 982 and Adoption of a Resolution to Amend the City’s Local Coastal Program Land Use Plan Pursuant to California Coastal Commission Action on May 10, 2023, Approving a Conditional Certification Order with Required Modifications (All Relating to the Parking Amendments under DMMC Chapter 30.80 Adopted by the City Council in December 2021) REQUESTED ACTION/RECOMMENDATION:

Staff recommends that the City Council take the following actions to approve changes required by the California Coastal Commission (CCC) as a condition of final certification of the City’s parking-related Local Coastal Program Amendment application (Zone Code Amendment ZA21-001/Local Coastal Program Amendment LCPA21-001) including:
1) Introduction of an Ordinance (Attachment A) to amend the previously adopted City Ordinance No. 982 (See Attachment D for Ordinance changes in strikeoutunderline form); and 2) Adoption of a Resolution (Attachment B) to amend the Land Use Plan of the City’s certified Local Coastal Program (LCP), consistent with the parking regulations under the Del Mar Municipal Code in accordance with the CCC conditional approval letter (Attachment C).

DISCUSSION/ANALYSIS:

These actions relate to a City Council special project identified in response to the COVID19 pandemic that is intended to support a vibrant pedestrian oriented downtown and local business recovery. More specifically, the recommended actions accommodate changes to the City’s parking regulations requested by local property owners and business owners (i.e., facilitate outdoor dining, facilitate occupancy of vacant commercial tenant spaces, 1 June 5, 2023 Item 13
City Council Staff Report
Amendment of Parking Ordinance No. 982/ LCPA
June 5, 2023

and align local parking rates with industry standards and best practices) and implement community goals to activate street front spaces and reduce vehicle miles traveled (VMT).

On December 13, 2021, the City Council adopted Ordinance No. 982, to take effect upon CCC certification of the LCP amendment, which included a package of parking-related amendments to the City’s Zoning Code and Local Coastal Program (Del Mar Municipal Code (DMMC) Chapter 30.80). Ordinance No. 982 addressed three main changes to DMMC Chapter 30.80 to support the downtown business community, as follows:
1) Provide an exemption for existing non-conforming commercial properties in the Central Commercial Zone to allow the change-out of existing tenant spaces with retail sales, restaurant, or personal service uses without providing additional parking;
2) Allow a restaurant to have an accessory food or beverage cart/stand (maximum of one per lot) without providing additional parking; and 3) Reduce the required parking for table service restaurants and facilitate outdoor dining as follows:
• Provide a reduced rate of one parking space per 200 square feet (sf) (1:200 sf), which equates to a requirement for 5 spaces per 1,000 sf to replace the existing requirement of one parking space per 90 sf (1:90), which equates to 11.1 spaces per 1,000 sf;
• Provide a new parking exemption for outdoor dining areas located on private property to exempt outdoor dining space up to a maximum size that is equivalent to the size of the restaurant’s indoor area and require that any outdoor dining space above that threshold provide parking at a rate of 1:200 sf; and
• Modify the parking rate for restaurants with a gross floor area greater than 5,000 sf in size to require parking at a rate of 1:90 for the portion of indoor restaurant that is in excess of 5,000 sf (to replace the existing requirement of 1:45 for restaurant space greater than 4,000 sf).

In accordance with State law, Ordinance No. 982 is subject to approval by the Coastal Commission before it goes into effect. On May 10, 2023, the CCC voted to conditionally certify the City’s LCP amendment application and required the following modifications prior to final approval:

LCP Land Use Plan amendments for consistency with the parking code:

The LCP Land Use Plan (LUP), which identifies the City’s LCP land use development, hazard control, coastal access, public scenic view, recreation, and sensitive land policies, is available at the following website link:
2 June 5, 2023 Item 13
City Council Staff Report
Amendment of Parking Ordinance No. 982/ LCPA
June 5, 2023

https://www.delmar.ca.us/DocumentCenter/View/261/Land-Use-Plan-5919?bidId= The LCP Coastal Access policies in LUP Section IV relate specifically to parking. This includes the LUP goal statement IV-D to “Maximize the opportunity for access to beach areas by minimizing the competition for public on-street parking spaces”; and two policy statements including Policy IV-29 that requires an inventory of existing parking areas and a parking management plan and Policy IV-30 that specifies the parking requirements for each land use as specified in the City’s Zoning Code parking regulations. The CCC is requiring modifications as follows:

Policy IV-30 – Modifies the existing LCP policy by removing the list of specific parking space requirements for each land use (already stated in the code) and replacing it with a more general policy statement to require that new development provide off-street parking for residents, visitors, and employees in accordance with the certified LCP.

Policy IV-31 - Adds a new policy that parking be provided and managed to ensure that it is reasonably available without significantly impacting coastal resources or public access to coastal amenities and facilities.

Policy IV-32 - Adds a new policy for use of a flexible approach to parking that will consider use of shared parking, public transit, car sharing opportunities and ensure that public access to coastal resources will not be reduced.

Policy IV-33 – Adds a new policy to reduce the amount of land dedicated to parking through the use of parking structures, shared parking, and managed public parking.

Policy IV-34 – Adds a new policy requiring that where there is potential for significant transportation impacts (pursuant to CEQA), development should implement transportation demand strategies to reduce congestion, parking demand, and VMT, improve mobility, and reduce air pollution.

New Expiration Date to Monitor Implementation and Effect of Amendments:

The CCC approved the parking amendments on a temporary basis for an eight-year period to allow time for the City to monitor and evaluate whether to approve the amendments on a permanent basis or make additional adjustments. Prior to January 1, 2031, the City may process a LCP amendment to make the parking amendments permanent or adjust accordingly based on findings of a submitted parking management program report. Otherwise, if the code provisions are allowed to expire, any businesses that are granted approvals in reliance on the expired parking code provisions would become non-conforming for parking and allowed to maintain their nonconforming parking in accordance with the regulations in DMMC Chapter 30.76 (Nonconformities).

Requirement for Monitoring Reports and Parking Management Program:

Consistent with existing LUP Policy IV-29, CCC is requiring that a parking management program (PMP) be completed at least every 10 years with the deadline for the first PMP 3 June 5, 2023 Item 13
City Council Staff Report
Amendment of Parking Ordinance No. 982/ LCPA
June 5, 2023

to be completed by January 1, 2030. The intent is that the PMP be used to inform decisions about future parking amendments. The PMP must include documentation of the public parking inventory within one-quarter mile of the shoreline (including the San Dieguito River), and monitoring and data collection to be initiated by 2024 (to occur every 2-3 years and at least 3 times per PMP update cycle such as 2023-24, 2025-26, and 2028-29) to understand parking occupancy, parking demand, and inform future recommendations to address whether adjustments and/or new strategies should be implemented.

Exclusion of Beach Commercial Restaurants from New Parking Rates:

To ensure the LCP amendment will have no detrimental effect to the availability of public parking adjacent to the beach, the CCC incorporated language to exclude businesses in the Beach Commercial Zone (i.e., Jakes, Poseidon, and Brigantine restaurants) from utilizing the new reduced parking rates. Currently, these restaurants utilize valet parking programs. If these restaurants propose new development and/or any modifications to their existing parking operations, the request would be subject to approval of a Conditional Use Permit and Coastal Development Permit in accordance with the certified LCP.

Staff recommends the City Council proceed with the requested action to implement the changes required by CCC as a condition of final certification of the LCP amendment.

Once the proposed resolution and ordinance are adopted, the package of parking regulations as a whole will become effective on the date the CCC takes action to concur the City has met the required conditions for approval, which is likely to occur in August 2023.

FISCAL IMPACT:

There is no fiscal impact or action to be taken by the City Council related to this agenda item.

HOUSING IMPACT:

The approval of the requested discretionary development applications would have no impact on the City of Del Mar’s housing supply or housing affordability in that the requested amendments are not related to housing. However, the proposed additional LUP policies will make it easier to incorporate State housing requirements as they increasingly are requiring reduced or alternative modes of parking.

ENVIRONMENTAL IMPACT:

The proposed action is exempt from the preparation of an environmental document pursuant to the California Environmental Quality Act (CEQA) per CEQA Guidelines Article 18, Section 15265 (Adoption of Coastal Plans and Programs) and Article 19, Section 15301 (Existing Facilities).

ATTACHMENTS:

Attachment A – Proposed Ordinance (Amending Ordinance No. 982) Attachment B – Proposed Resolution (Amending LCP Land Use Plan) Attachment C – CCC Conditional Approval Letter
Attachment D – Strikeout-Underline (Amendments to Ordinance No. 982 and LCP LUP) 4 June 5, 2023 Item 13

ATTACHMENT A
ORDINANCE NO. __

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DEL

MAR, CALIFORNIA, AMENDING REGULATIONS GOVERNING

REQUIRED OFF-STREET PARKING AS ADOPTED BY
PROSPECTIVE ORDINANCE NO. 982 PURSUANT TO THE

CONDITIONAL CERTIFICATION ACTION TAKEN BY THE
CALIFORNIA COASTAL COMMISSION ON MAY 10, 2023 IN ORDER

TO OBTAIN FINAL CERTIFICATION OF THE SUBMITTED LOCAL

COASTAL PROGRAM AMENDMENT APPLICATION
WHEREAS, the Del Mar City Council adopted Ordinance No. 982 on December 13, 2021, to develop business support in the form of modifications to the City’s off-street parking requirements; and
WHEREAS, on May 10, 2023, the California Coastal Commission (CCC) took action to conditionally certify the City’s Local Coastal Program Amendment for Parking Ordinance No. 982, with amendments; and
WHEREAS, if the City Council adopts the Del Mar Municipal Code amendments included herein, which revise the proposed regulations included in prospective Ordinance No. 982 per the CCC’s suggested modifications outlined in its conditional certification order, the City of Del Mar can resubmit the ordinance to the CCC to obtain final certification of the parking-related Local Coastal Program Amendment package.

NOW THEREFORE, the City Council of the City of Del Mar hereby ordains as follows:

SECTION ONE: That the City of Del Mar hereby acknowledges receipt of the California Coastal Commission’s Resolution of Certification of City of Del Mar LCP Amendment No.

LCP-6-DMR-21-0081-2 (Parking Adjustments), including any suggested modifications therein.

SECTION TWO: That DMMC Section 30.80.020 (General Parking Regulations) be modified to add the following, which amends the proposed regulations included in prospective Ordinance No. 982, as recommended by the California Coastal Commission:

No changes to sub-sections A-E
F. Notwithstanding Section 30.80.020(C), within the Central Commercial Zone, no additional parking spaces shall be required for a change in commercial use to a retail sales, restaurant, or personal services use, including associated tenant improvements within an existing commercial building with non-conforming parking where the change in use and tenant improvements are consistent with the following:

1. The commercial tenant space was existing as of January 1, 2020; 5 June 5, 2023 Item 13
Ordinance No. ____

2. All existing parking spaces that are currently relied upon by the commercial building tenants shall be maintained, unless and until a “Release of Covenant” is approved by the City and recorded with the County Recorder or other City authorization is granted. This limitation shall apply to any existing off-street parking spaces located on-site and any off-site parking spaces that are relied upon by the existing commercial development through an approved in-lieu parking space agreement and/or a recorded parking agreement;

3. The proposed change in use may involve the combination of existing tenant spaces, however, no tenant space on the lot shall exceed a maximum size of 5,000 square feet in gross floor area;

4. If a tenant space is proposed to be expanded, additional parking spaces must be provided for the area of expansion (includes indoor and outdoor use areas) at the rate set forth in Section 30.80.030;

5. No more than three restaurants shall be permitted per lot, including existing restaurant tenants; and

6. All changes in use must comply with the horizontal zoning requirements of the Central Commercial zone in Section 30.22.030.

7. The provisions of Section 30.80.020(F) shall remain in effect until January 1, 2031. This section may be amended prior to the expiration date based on the results and recommendations of the Parking Management Program described in Section 30.80.020(H). However, if not amended by January 1, 2031, then this section shall become inoperative on January 1, 2031. The January 1, 2031 deadline may be extended for good cause by the Executive Director of the California Coastal Commission.

G. A restaurant establishment is permitted to have one accessory food/beverage stand or cart on-site that is not subject to required parking provided that all of the following provisions are met:

1. The stand/cart shall not exceed one hundred square feet in area;

2. The stand/cart shall be open to the air on all sides to the extent possible except where it would preclude compliance with the San Diego County Health Department requirements applicable to food and beverage carts;

3. The parking exemption shall apply to a maximum of one accessory food/beverage stand or cart per lot;
6 June 5, 2023 Item 13
Ordinance No. ____