Where Davis Water Rates May Be Going

by Matt Williams –

Let me once again start by saying that the opinions and perspectives presented here in this article are those of the author and are not the opinions and perspectives of the Water Advisory Committee (WAC).

Unlike the meetings before it, meeting number 7 of the WAC contained virtually no discussion of how the WAC should conduct its activities, votes and recommendations.  If the WAC is following Tuckman’s stages of group development, also known as the “Forming-Storming-Norming-Performing” model of group development, then the WAC appears to have successfully completed the Storming stage and will hereafter be concentrating on Norming and Performing.

Speaking of Perfoming, when the meeting started I thought we were about to have a rousing and interesting Public Comment segment, because Michael Harrington and his lovely daughter arrived in Council Chambers just as the meeting was about to start.  Unfortunately, Michael disappeared just as mysteriously as he had arrived, and the Public Comment cupboard was bare when Chair Elaine Roberts-Musser polled the Chambers for any public commenters who might want to let the WAC members know what was on their mind.  Michael’s take on the WAC’s progress to date would have been refreshing.

Presentation of the Night – Bartle Wells’ view of where Davis’ Water Rates may be going

Doug Dove from Bartle Wells gave the WAC an update on his progress since his original Water Rates presentation in WAC meeting #5 on February 23^rd (as reported here in the Vanguard) and Kelly Salt’s sharing of her legal expert opinion on the effect of the Palmdale vs. Palmdale case on the WAC’s Water rate discussions (as reported here in the Vanguard).   Doug first covered a March 2012 Water Rate Survey of 19 cities and/or water authorities near Davis.  The Average Monthly Water Bill from those 19 was $40.52, with Davis coming in at an even $34.00 (7^th lowest of the 19); however, WAC members peppered Doug with follow-up information requests designed to put the information into perspective.  Bill Kopper pointed out that a snapshot of rates in the past 12 months is useful, but is also much less important than what those 19 cities are anticipating in terms of future rates.  Bill asked Doug to recontact the cities and ask them for what their rates are going to be for each year through 2017.  Doug agreed to do so and get back to the WAC with the results.  Matt Williams pointed out that average monthly bill amounts only tells a portion of the story, and that it is important to know what the monthly water consumption in each of the 19 cases, so that the WAC can get a better sense of how much of a factor Water Conservation is in the selected cities/water districts.  Doug agreed to gather that information as well.

Doug then transitioned into a discussion of possible Revenue Requirements that possible Davis Rates may need to generate.  This portion of Doug’s presentation proved problematic . . . not so much because of the substance of what he presented, but rather because of the political implications of some of his choices of words.  My personal sense was that Doug’s “mistake” was an innocent one, but it did raise some hackles.  Specifically he presented three Revenue Requirement scenarios, which he labeled “Worst Case” and “Best Case” and “No Project.”  That in itself was not a problem.  The problem came when he explained how he had gotten the assumptions for the best and worst cases, both of which were based on possible scenarios of proceeding with the Surface Water Project as proposed.  Given the recent Council Check In where the WAC is charged with “voting and/or making recommendations about the surface water project and any potential alternatives” Mark Siegler summed up the feeling of some of the WAC members present (but not all of the WAC members present) that he felt he was getting a bit of a sales pitch for the Surface water Project, and he didn’t feel that that was appropriate.  Doug responded that he was simply trying to put the Lower Cost Assumptions of the best case and the Higher Cost Assumptions of the worst case into a context that WAC members would easily grasp.  He agreed to couch all future scenarios in more generic terms.

Doug concluded by making his recommendation that the original list of nine rate structure possibilities  be pared down to three.  This narrowing of the rate structure possibilities was spelled out clearly in the Scope Of Work document, but some of the WAC members felt that simply listing the eliminated rate structure possibilities was not informative enough, so Doug agreed to provide the WAC with a short explanation of why each of the six eliminated structures was eliminated.  The eliminated structures were:

The three structures that Doug suggested the WAC proceed with further analysis on were as follows.  The descriptions of the Inclining Tier Rates and Water Budget Based Rates are taken from an article written by Kelly Salt, the legal expert on Proposition 218 who spoke to the WAC in our last meeting.

Pending the explanation of why he eliminated the six structures, the next step will be for Doug to develop actual cost schedule scenarios for each of the three selected rate structures.  The WAC was very clear that they wanted to see a sensitivity analysis for each structure that showed a number of different scenarios of cost from lower cost assumptions to higher cost assumptions . . . irrespective of what project the WAC recommends to City Council.

Stay tuned . . . the WAC is your government very much in action.  Its fun.  It’s lively.  Most of all it is very informative.  If you want to know more about water, don’t miss it.

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