Water Demand Offset (WDO) Program

What is the Water Demand Offset Program?

Soquel Creek Water District receives 100% of its water from groundwater. The groundwater basin is currently in a state of overdraft. This condition has led to seawater intrusion detected at the coastline and, if left unresolved, will contaminate the groundwater wells and make them unusable to produce drinking water. The District is seeking a supplemental supply to address the problem of seawater intrusion and the Water Demand Offset (WDO) Program serves as a vital part of the District's conservation effort in the interim.

The Water Demand Offset (WDO) Program was implemented in 2003 and allows development to continue, conserve water and to not further impact the overdrafted groundwater basin, leading to seawater intrusion. It requires new development to offset their projected water demand by funding new conservation or supply projects within the District.

The WDO Policy (Resolution No. 16-08) requires the following development projects to offset approximately two times the amount of water they are projected to use so that there is a "net positive impact" on the District's water supply:

  • Development projects requiring a new water service;
  • Development projects with an existing water service that are undergoing a change in use that is expected to increase water demand, as determined using District established water use factors; and
  • Existing commercial customers that are adding new square footage.

Project History

When the Water Demand Offset program was first established, applicants were required to complete their offsets by locating and replacing inefficient toilets within the District with water efficient fixtures.  As plumbing codes strengthened and High-Efficiency Toilets (HETs) saturated the market, it became apparent that inefficient toilets were becoming too difficult for individual applicants to locate.  Eventually, the Board of Directors voted to replace the toilet replacement program to a fee based system so that the applicants could offset their use by contributing to bigger water savings or supply projects.

Visit our Water Demand Offset Program History page to learn about the conservation projects that receive WDO funds!

Calculating the Water Demand Offset Requirement

The amount of  the Water Demand Offset fee for new development is calculated based on the assumed water use factors which are determined using (1)the development type (e.g. single-family home, retail store, office, etc.), and (2)the size of the development. For example, an office building or retail store would have a lower water factor than a restaurant or a grocery store and a small home would have a lower water factor than a large home. The water demand values, used to come up with the water use factors, were determined from several studies of average water use at each property type and size and have been modified since the program began in 2003 to reflect advances in plumbing.

Existing development projects undergoing a change in use where water use is expected to increase must calculate their fee amount the same way as for a new development but can subtract the existing annual water use. Therefore, the project is only required to offset the new or additional water demand.

After the water use factor is determined, on offset multiplier of 1.6 is applied to the WDO requirement so that the project's water demand is offset by 160% to 200%. Thus, new construction helps to reduce water use overall.

This final offset requirement represents the amount of water (in-acre feet) that the project must offset to help reduce water use overall. At this time, all projects can satisfy their offset credit by paying a WDO fee equivalent to $55,000 per acre-foot.

For planning purposes you can download the New Applicant Water Demand Offset Form to see how the WDO requirement is calculated for your specific type of development.

  • To assure the WDO requirement is properly calculated for a given project, the project applicant must first contact the District and present the proposed building plans.
  • At the time new water service or expanded water service is requested, the District will provide the developer/applicant with an estimate of the project's WDO requirements.
  • The applicant must enter into the New Water Service Applicant Agreement and pay an application fee of $300 before becoming eligible to be placed on a waiting list to receive offsets.

Completing your Water Demand Offset RequirementTwo men stand in front of a home in construction with a Water Demand Offset sign

The Water Demand Offset requirements cannot be fulfilled until the applicant has met with District staff, signed the New Water Service Applicant Agreement and has been placed on the waitlist to receive offsets.

Once the WDO requirement has been met, changing the ownership of the site will require the new owner to enter into the New Water Service Applicant agreement with the District to retain the offset credit that has been approved. However, changes in water use or additions to the project may require additional water demand calculations.

At this time, all projects can satisfy their offset credit by paying a WDO fee equivalent to $55,000 per acre-foot. This fee is broken out:

  • 50% of offset fee goes towards long-term water conservation projects (e.g. stormwater recharge, smart metering)
  • 50% of offset fee goes to funding the enhanced toilet rebate program.

WDO fees must be paid in full BEFORE an applicant applies for permits with the County of Santa Cruz or the City of Capitola. WDO fees can only be paid when there are enough toilet rebate credits available to satisfy that portion of their offset. There is a waiting list of applicants to receive toilet rebate offsets. Applicants can only purchase their offset credits from the toilet rebate program when they have reached the top of the list and enough offsets are available.

Green Building Credits

Add green building components to your project and receive a lowered WDO requirement – You may reduce the WDO requirement for your project by going beyond the minimum water efficiency requirements for toilets, showerheads, turf, washing machines, etc. 

The WDO Go Green Credit option reduces offset requirements and project costs for the applicant and lowers water consumption for the new building. 

Click here to download the WDO Green Credit applications for residential or commercial properties. Click here for the Indoor and Landscape Water Use Efficiency Ordinances.

Questions? 831-475-8500 ext. 156

Call Conservation staff at extension 156 if you have any questions regarding the WDO requirements or the "Go Green" Program.

For all requirements of new or expanded construction and change of use requirements, see Residential or Commercial Construction section.

WDO program documents

WDO Green Credits Program fact sheets: