by Matt Williams
As always the opinions of the author herein are his personal opinions and do not in any way represent the opinions of the WAC.
Last night’s WAC meeting came in two installments, the first of which began with a very lively Public Comment period. Bill Streng and the Chamber Government Relations Committee were not there, but Sue Greenwald, Michael Harrington, Alan Pryor and others shared their water insights with the WAC. If anyone thought Sue was going to fade quietly into the sunset, this WAC meeting showed that she is a potent force on either side of the dais. Her comments were on point, helpful and even within a 3-minute time limit.
Because of a Tuesday night request by Council that the WAC conduct a “Discussion of Potential Water Project Election Delay and Impacts of Revised Timeline” the WAC next weighed in on that very subject.
Given the 9-0-1 vote by the WAC on June 14th recommending a ballot date of November, one might have expected some fireworks if the date were to be changed from November.
In fact there were no fireworks anywhere to be found, and in quick order by a 10-0 vote the WAC told Council that November was not an option.
Then by a 9-0-1 vote (with Mark Siegler again abstaining as the lone non-Yes vote) a “Spring 2013 date, to be no later than June 30” was approved as the new ballot timeframe recommended to Council.
One Council Member won’t have to wait to hear those two recommendations second hand, as Brett Lee was once again in attendance. Brett even weighed in during Public Comment, thanking the WAC for all their hard work. He sounded like he had been on the Council for years rather than days.. Brett is clearly a quick study.
There were two additional motions passed in the Special Meeting, and to be honest I’m going to have to go to the videotape in order to fully understand them. The first was by Bill Kopper and the second was by Frank Loge. Both had to do with the actions that Council should and shouldn’t take vis-à-vis the JPA in the coming months as the WAC weighs the West Sac option and the WDCWA option against one another. Then the first installment of the evening adjourned and the second installment began after a short break.
The regular meeting agenda covered rates, rates and more rates, with Item 5 being deferred to another meeting because of the Special Meeting additio0n to the evening’s festivities.
Doug Dove from Bartle Wells gave his latest presentation of Davis’ options with respect to rates and he ran into a buzz saw in the persons of Mark Siegler and David Purkey and Michael Bartolic.
For those members of the audience who felt short changed by the lack of fireworks in the Special Meeting, got some serious catch-up as Mark and David peppered Doug with questions about plant sizes and inflation rates and discounting future expenses back to current dollars and other important issues.
City Manager Pinkerton jumped in to try and divert some of the focus onto himself, counseling patience on the part of all of the WAC members as numbers continue to evolve, stating that many of the numbers are simply “placeholders” at this time pending further refinement.
One suggestion that David Purkey made was that Doug might want to remove the specific labels from the respective alternatives and replace them with generic names. The logic behind David’s suggestion was that making the names generic would defuse the identifications that inevitably come with the labels Doug was using. I personally liked that suggestion quite a bit.
Just when Doug thought that the Siegler/Purkey buzz saw had subsided, he moved into the concept of Commodity-Demand Cost Allocation, and I asked David and Mark to pass me the Stihl and I went after Doug on this latest part of his presentation.
You can call me a skeptic if you want to, but I find Commodity Demand Allocation to be a “make work” idea created by an engineer. Cost allocation is an accounting process and somehow I find it loses something in translation when done by an engineer.
If you “think like an accountant” and analyze Davis’ current cost structure, you get a 70/30 ratio of Fixed Costs to Variable Costs. If you “think like an engineer” you get a 46/54 ratio of Demand Costs to Commodity Costs.
That 46/54 ratio is indeed meaningful in understanding (as an engineer does) how and why costs were incurred by the water system, but a substantial proportion of Commodity Costs end up getting capitalized by the accountants and paid for by debt.
Debt service is a Fixed Cost that does not vary with the quantity of water produced, and when we analyze the water budget and the effect that water conservation will have on that budget, we need to think like an accountant, not an engineer.
We could get into the arcane details of the rate discussions, but since they are such a moving target right now, I think we should defer those discussions to a future date.
The one thing I do want to close with covers the discussion we had about fairness and proportionality in the fixed fee portion of our current rate structure (as well as in the conventional wisdom applied to fixed fees throughout the water rates industry).
Frank Loge and I have expanded our role as WAC members at the request of Dianna Jensen to supplement the work Bartle Wells was commissioned to do by Council.
The reason Dianna threw down the gauntlet to Frank and me was that the two of us came up with a rate design alternative that has never been done before anywhere in the US, maybe never before in the world.
A new idea that “has never ever been done before” faces special challenges, and Dianna said to us that if we wanted the idea to be seriously considered, we had to jump in and do the detail analysis ourselves and share it with her and Bartle Wells before sharing it with the WAC.
In short the idea is to improve the fiscal stability, fiscal sustainability, fairness, proportionality and water conservation effectiveness of a water rate structure by basing the fixed fees of the rate structure on each accounts proportion of the overall system consumption in the prior 12-month period.
That would be a change from the current method, which is based on the size of each account’s meter.
Instead of getting into the details of this concept in more depth, let me ask each Vanguard reader to post their answer to the following three questions:
1. Do you know what size your water meter is?
2. Were you given the opportunity to choose what size water meter was installed at your residence?
3. Did you understand at the time your meter was installed that it would determine the dollar amount of your monthly Fixed Fee?
Don’t be bashful. Let us know what your answers are. They will help us all understand the personal impact of this revolutionary new way of handling fixed rates.
My answers to your mini survey:
1) No
2) No, or at least I wasn’t aware of it if I I had a choice.
3) Yes
Not unusual for me since I tend to take a rather haphazard view of utilities. I need them, I pay for them.
I elect other people to do the analysis and make the choices that I do not choose to research sufficiently to make informed decisions.
It looks as though I may already be breaking part of Robb’s recommended pledge with regard to responsible
“informed following” and I suspect I may not be alone.
[quote]Let us know what your answers are.[/quote]
1. I don’t even know how they size water meters, unless it’s by pipe size. I believe we have a 1″ copper service line.
2. If I was, I wasn’t aware of it.
3. Nope.
.
1. yes… almost every SFR has a 3/4″ meter, 1-inch service line.
2. no. And I should [u][b]not[/b][/u] have a choice! Line sizes and meter sizes are determined by anticipated demand from a property. Meters have physical limitations, and ranges of accuracy. Put too small a meter on a service, it will be inaccurate, and will have a shorter service life (more expensive for the city to maintain/replace. Put too large a meter, and the meter will be inaccurate, and not measure lower flows. But as Mr,. Williams seems not to trust either engineers and/or staff (God forbid that meter sizes should be sized by city employees with an engineering background, using industry-wide criteria), perhaps we should have volunteers with a background in meso-american anthropology size the meters, or put it up to a vote of the people. Developers of non-res properties often try to “game” meter sizes to reduce up-front costs. Perhaps Mr Williams would like to ‘level the playing field’ and provide all users the opportunity to “game” the City.
3. yes. People who don’t know, only have themselves to blame.
1.no 2.no 3.no
I bought a new house and didn’t think I had a choice and wasn’t asked either.
Good to see that Sue is going to stay active. Maybe she can have an even greater effect on Davis policies by rallying her base to be more active.
No, no, no but hoping to become more informed!
Great article Matt. I liked the humor. Was not able to watch but taped the meeting.
#1 – No
#2 – No
#3 – Vaguely. I figured that the meter would let the city know how much water I was using and that I’d be billed accordingly. I wasn’t asked anything nor was I aware that anything was a “choice.”
[quote]There were two additional motions passed in the Special Meeting, and to be honest I’m going to have to go to the videotape in order to fully understand them. The first was by Bill Kopper and the second was by Frank Loge. Both had to do with the actions that Council should and shouldn’t take vis-à-vis the JPA in the coming months as the WAC weighs the West Sac option and the WDCWA option against one another. Then the first installment of the evening adjourned and the second installment began after a short break.[/quote]
The two additional motions were as follows:
1. The WAC recommends to the City Council not to expend $500,000 to pay for infill of the water treatment facility site in Woodland until Davis has made a commitment to move forward with the Woodland/Davis surface water project. Passed 9-1-0.
2. The WAC recommends the City Council not vote on the site fill issue or the alternate bid issue (pay to add Woodland only option to DBO bid) until Davis fully understands what the State Water Resources Control Board will do in regard to deadlines for Woodland’s wastewater permit if the deadlines are not met. (Ken Landau from the SWRCB will be invited to make a presentation at the WAC on this issue.) Passed 6-3-1
Hpierce said . . .
“1. yes… almost every SFR has a 3/4” meter, 1-inch service line.
2. no. And I should not have a choice! Line sizes and meter sizes are determined by anticipated demand from a property. Meters have physical limitations, and ranges of accuracy. Put too small a meter on a service, it will be inaccurate, and will have a shorter service life (more expensive for the city to maintain/replace. Put too large a meter, and the meter will be inaccurate, and not measure lower flows. [b]But as Mr,. Williams seems not to trust either engineers and/or staff (God forbid that meter sizes should be sized by city employees with an engineering background, using industry-wide criteria), perhaps we should have volunteers with a background in meso-american anthropology size the meters, or put it up to a vote of the people.[/b] Developers of non-res properties often try to “game” meter sizes to reduce up-front costs. Perhaps Mr Williams would like to ‘level the playing field’ and provide all users the opportunity to “game” the City.
3. yes. People who don’t know, only have themselves to blame.
I’m glad you made that point Hortense. Let me engage it a bit. First, I have no distrust of engineers at all. Some of my best friends are engineers. 8>) Every engineering decision has to be made within the parameters of information available to the engineer at the time, and meter sizing decisions are frequently made with scant information. Since the dollars associated with the decision are minimal (in the grand scheme of things) the decisions proceed with the information available.
Where I do have a concern is when engineers try and think like accountants, and that is the situation we have here. Let me explain that by sharing some data.
1) In Davis there are 12,181 meters with ¾-inch capacity. If you rank those meters in the order of the amount of water (low to high) they deliver, the 1,218th meter delivers 51 ccf (38,000 gallons) the 12,181st meter delivers 3,040 ccf (2,273,900 gallons). That is a 60-fold difference. None the less both those meters are paying the exact same fixed fee as one another. (and all the other 12,181 meters that size)
2) In Davis there are 3,364 meters with 1-inch capacity. If you rank those meters in the order of the amount of water (low to high) they deliver, the 336th meter delivers 87 ccf (65,000 gallons) the 3,364th meter delivers 11,777 ccf (8,809,200 gallons). That is a 135-fold difference. None the less both those meters are paying the exact same fixed fee as one another. (and all the other 3,364 meters that size)
3) The pattern is the same in all the larger meters
What does that mean? The engineers have done the best job they can to size the meters for the anticipated use, but the accountants have set up a billing system (not just in Davis, but nationwide, and for decades and decades) where 135-fold differences are ignored.
Matt… let’s take this off-line. You do not have all your facts in place. I’ll give you a call.
I’m always prepared to learn, so I look forward to your call. As they say, the whole is greater than the sum of its parts.
I’m beginning to wonder whether it is ever possible to please Bob Dunning. He harps and carps about a November ballot date, and when events conspire to give him exactly what he wants, he harps and carps about that too.
For those of you who haven’t seen Bob’s article in the Sunday Enterprise, here it is in all its Manechean and hyperbolic glory.
[i]”[b]All of a sudden, November seems too soon[/b]
By Bob Dunning
For crying out loud, I leave town for a few days and all hell breaks loose.
First, the city flip flops on the water issue like a spawning salmon trying to make its way up the Sacramento River, then UC Davis uses my absence to hire a new athletic director without my permission, then the temperature hits 105 in the shade — compared to 85 when I left — and finally, Yolo County’s official “trapper” guns down a family of five coyotes (mom and four pups; dad apparently got away) for daring to come too close to civilization.
Other than that, another boring July in the City of All Things Right and Relevant (and Sometimes Ridiculous).
I’ll deal with the water issue first and get to the rest of it as time allows over the remainder of the week.
If we go back a short while, the city of Davis was arguing that any delay in its plan to jointly tap Sacramento River water with the great city of Woodland would cost us millions and millions and millions of dollars. So many, in fact, that we wouldn’t be able to count them all. Delay was purely and simply the fool’s option, and anyone suggesting such a course of inaction was banished from the dinner table and sent to his room.
Fast forward to last Thursday night, when the council-appointed Water Advisory Committee held its most recent meeting, and there was City Manager Steve Pinkerton arguing vociferously for — you guessed it — delay.
Pinkerton found religion in lightning-quick fashion when the school board suddenly decided to drop yet another fat parcel tax on the November ballot alongside Jerry Brown’s proposed tax increase.
Figuring that even Davis voters might finally say enough is enough and decisively pick schools over a yet-to-be-defined water project, Pinkerton became the master of delay.
According to Tom Sakash’s piece in this very newspaper, Pinkerton “explained to the water committee that several new developments have altered the situation,” including “the fact that the school district now plans on placing a parcel tax on the November ballot, something the city hadn’t anticipated when the WAC first made its recommendation (for a November ballot).”
Pinkerton now believes a November ballot won’t give the WAC nearly enough time to complete its work and make informed recommendations on a project and proposed rates to both the council and the public at large. This, interestingly, is what opponents of a rush to judgment have been saying all along, only to be shouted down by those who contend that delay is both evil and costly.
So now, delay is the order of the day. Delay is responsible. Delay is prudent. Delay is no longer costly or catastrophic or, heaven forbid, unfair to Woodland. Delay is A-OK. Heck, they might even invite famous dance sensation Tom DeLay to come to Davis just to kick off the Davis Delay campaign.
After Pinkerton spoke, the WAC voted unanimously (10-0) to nix a November vote, then voted 9-0-1 to have the vote “No later than June 30, 2013.” Or nearly six months after the end of the world according to the Mayan calendar.
All of this delay is only advisory, of course, since the council will have the final say come Tuesday night. The council did grant the WAC the right to debate, discuss and recommend, but it’s not about to let the inmates run the prison.”[/i]
Here is the conclusion of Bob’s article.
[i]”According to my well connected water source, Deep Well, there is much merit in delaying the vote.
Notes D.W.: “I believe a pragmatic choice of system can be made that will well meet Davis’ needs over the next 25 years, and serve as a basis for whatever those who come after decide to do about the next 25 years following. That would be a system that we can fairly afford to pay for, collectively and individually. Nobody would consider it as their perfect system, but it would be a good enough compromise that 80 percent of the spectrum should be satisfied enough and vote to approve it. True, 10 percent will hate it because it isn’t a big fat river project, and another 10 percent will hate it because it isn’t based on collecting dew droplets from butterfly wings.”
But, Deep W. warns, it won’t be all milk and honey for everyone.
“Given the demographics of Davis ratepayers,” he adds, “most will be able to afford the somewhat higher bills unavoidably generated by even the most modest new (compromise) system, 25 percent will afford it with mild or modest mitigations in water use, and 25 percent will have to trim their usage very carefully just to limit the damage to their budget.”
Those left out of this equation will, presumably, move to Dunsmuir, where they can drink Sacramento River water any hour of the day or night.
What our brand new Kumbaya Council will decide is anyone’s guess, but listening to the advice of its very own Water Advisory Committee might be a good place to start.”[/i]