by Matt Williams –
Once again let me start by saying that the opinions and perspectives presented here in this article are those of the author and not the opinions and perspectives of the Water Advisory Committee (“WAC”).
Yesterday David Greenwald talked a bit about his perspective on what some Water Advisory Committee numbers mean. I’d like to drill into those numbers a bit.
The first of those numbers is 6. David made the argument that all it takes to produce a WAC project recommendation is six “yes” votes. I respectfully disagree with David. I personally believe that 8 is the real number . . . or shall we say the realistic number. The reason for that is simple . . . the citizens of Davis will get a much clearer message about how the WAC feels if the vote is no less than 8-2. 10-0 or 9-1 would be even better, but 8-2 probably fits into the old adage of “reasonable people can agree to disagree reasonably.”
Right now I believe there are 4 WAC members who have assessed the risks and uncertainties associated with the West Sacramento alternative, and believe that those risks and uncertainties are too great to make the West Sac alternative viable, either now or in the long run. I also think there are two WAC members who believe the risks and uncertainties associated with the West Sac alternative are manageable and want more study before any decision is made. There is one WAC member who also wants more study, but for a different reason. In simple terms, the WAC has yet to study the DBO delivery method, and it would appear that a Woodland decision at this point would not only be a project decision, but also a decision in favor of DBO, since the JPA appears to be committed to DBO as their course of action. The WAC is scheduled to review DBO in detail in its August 23rd meeting, so I cant’s see this one agreeing to make a project recommendation to Council at any date prior to August 23rd.
That accounts for seven members with 4 votes for and 3 votes against making a recommendation at this time. I believe the other three votes fall into what I will call the “8 to 2 group.” My speculation is that these three votes feel that an 8-2 majority is needed to avoid political complications come March, and if I am right none of those three will vote to make a recommendation until after the thorough discussion of DBO takes place on August 23rd. Of course my speculation could be a bunch of hooey.
Now that we have dispensed with the number 6, lets talk about how the difference between costs and cash flows can affect the numbers of dollars that the typical Davis rate payer might have to pay for a particular water project. In short, how project costs get passed on to the rate payers can vary wildly depending on 1) what rate structure is chosen, and 2) how much the water agency wants to use debt to cushion the impact of the rate payers. Think in terms of the purchase of a home. If you choose not to incur a mortgage, and pay for the home outright, you will see a huge cash flow spike at the time of closing the home purchase. The pain will be huge, but if you take out a mortgage the pain will be mitigated substantially. The purchase price of the home will be unaffected, but the personal cash flows will be very different.
Right now, I have lots of unanswered questions about the costs that were presented to the WAC on Thursday night. Those questions need to be answered in order to determine the relative costs of the West Sac and Woodland projects. Once we know what those costs are, then we can decide how best to structure the rates so that the cash flows for the ratepayers and the City are most manageable.
Matt
Are you confident that you’ll have the answers Thurs you need?
Will there be ? of staff during the week leading up to the mtg?
[quote]The purchase price of the home will be unaffected, but the personal cash flows will be very different.[/quote]Yes. And the total dollars you pay will be greater to the extent you finance and the number of years that you extend the payments over. Interest rates are near all time lows. This may not be true if we prolong the discussion for 2 – 10 years.
[quote]Matt
Are you confident that you’ll have the answers Thurs you need?
Will there be ? of staff during the week leading up to the mtg?[/quote]
Staff is available to answer questions, and is working on it as we speak…
“
Staff is available to answer questions, and is working on it as we speak…”
Is that a no?
I don’t necessarily agree w Matt’s guess as to who feels what way. Only a very few members (2) have clearly staked out their position at the last WAC meeting. Most of the members had little time to say anything. Until they speak, I don’t think there is any way to know who will vote what way. This is especially true bc if nothing else, it is not clear as yet what the exact language of the motion will end up being after various WAC members have had a chance to weigh in…
I guess that depends on how you view the motioner and the seconder and also the comments of Helen and Adler.
The leadership of the 2011 Water Rate Referendum elected to give the WAC process a chance to play out.
We are waiting for the Thursday vote, and ask interested persons to come down and participate.
So far , a vote for the Woodland JPA and cutting off research on West Sacto options is basically raw politics, from our view, and neither good economics nor public policy.
I am forwarding the following entry from
eastdavis 08/10/12 – 12:53 PM…
“….I think a key question is what is the cost of treating the water supply to drinking water standards at the intakes for the two projects: E of Woodland vs West Sac. Has that sort of analysis been done?…”
From my perspective, the cost issue is relevant.
To Steve Hayes: It seems to me the cost of ozonation at Woodland project will cost an extra $2 million (approximately). The treatment at the West Sac WTP will be chlorination. Does that answer your question? If not, pose your question to city staff…
One of my questions is what will the additional monthly costs be for the 262 mobile homes at Rancho Yolo. 80% of the Rancho Yolo residents are on fixed income. They do not have individual water meters. The park owner gets a bill and then splits it among the 262 homes and adds to their monthly bill.
I suspect that many Ranch Yolo residents do not have the discretionary income to take on a new cost.
Is anyone paying attention to their situation and status?
David Thompson, Neighborhood Partners, LLC.
We are. The referendum was run to force the CC to justify this project as being in the best interests of the poor and middle class in Davis. So far, we have not seen that justification
Those RY residents should come this Thursday at 6:30 at CC Chambers and share their views with the WAC
David T.: what do you suggest? The ownership model of mobile home parks is a problem, rather separate from the project decision. Either project will significantly increase their water bills, and there’s not that much difference in the amount of increase. So getting individual meters to the residents may be the only option. Other ideas? I don’t think they can get different rates.
Mike: “a vote for the Woodland JPA and cutting off research on West Sacto options is basically raw politics, from our view, and neither good economics nor public policy.”
That is an extraordinary denigration of the members of the WAC. They have been meeting for months, have considered expert testimony, have asked questions and worked very hard. It is very likely that some members have done risk/cost/benefit analyses and come to their own conclusions already about the value of continuing to expend money and effort on the West Sac option. That doesn’t mean they are acting out of ‘raw politics’.
Brace yourself for the possibility that the WAC, after listening to experts and discussing all the issues in public, may come to a different conclusion than you advocate. If you’re saying they haven’t done due diligence, I say you are wrong and that the record is there for all to see.
[quote]I suspect that many Ranch Yolo residents do not have the discretionary income to take on a new cost. [/quote]
So is your position that we do [u][b]no[/b][/u] project? Because that has “costs” too…
To further explain, as Don points out, any surface water project is going to be costly. But so is doing nothing, which may be even more costly…
“So is your position that we do [u][b]no[/b][/u] project? Because that has “costs” too…”
Do you think there is a way that you could have phrased this that would have been less snide and still gotten the same point across?
Don: The WAC has not completed its research. I’ve said this over and over.
What further research do you suggest? They have reviewed the technical aspects, they have cost information in front of them for the different alternatives.
With the information we have now, it is becoming a fairly simple choice. WAC members or experts, please feel free to correct any of my discussion points below, in case I have misunderstood anything.
Woodland-Davis. The cities together build an intake and a treatment facility upstream. Each city then builds its own distribution line. Cost is up-front, to be financed. Choices about how to finance it and when to build it can delay the costs or spread them out.
Davis-West Sac. Davis builds a pipeline from West Sac to bring already-treated water across. Cost is up-front for the distribution line, and then ongoing annual payment to West Sac for the water connection.
Ultimately the ongoing annual payment to West Sac, and some of the up-front costs, cause the projects to differ less in long-term cost than many expected.
The risks and benefits include, but are not limited to:
At the end of the contract period, the city has no water treatment facility, so Davis may (in 30 – 40 years time) face a significant cost increase for water depending on contract provisions.
It appears there could be significant delays in getting a West Sac project underway, due to water rights issues.
West Sac is not willing to take any steps without a clear commitment from Davis. This essentially entails shelving the WDCWA project. Thus we can’t know the contract provisions until we’ve committed to West Sac.
Supporters of the West Sac project are advocating for significant continued use of well water, which is lower quality and presents risks to the groundwater. Davis residents would continue to be using high-salt water much of the time if their goal is achieved.
The water from WDCWA is ozonated. The water from West Sac is chlorinated. There is a quality difference with chlorinated water that some may object to.
Water rights which are transferred, in order to obtain water from West Sac, may be hard to get back at the end of the contract period.
If the Joint Powers agreement proves unsatisfactory, the city can withdraw. It’s not a simple process, but I would note that the Dixon city council just withdrew from a JPA with Solano Irrigation. All it took was a majority vote of the city council.
Outstanding issues remain rate structure, timing, financing, and DBO vs DB.
[quote]erm: “So is your position that we do no project? Because that has “costs” too…”
dgm: Do you think there is a way that you could have phrased this that would have been less snide and still gotten the same point across?[/quote]
Whoa, my question was not meant to be snide, and I don’t think it sounds snide. That is a connotation YOU are attaching to it. My question is very direct, to find out the commenter’s position – do they actually mean they prefer no project, which in the long run has serious “costs” related to it… perhaps they had something else in mind, but I will never know if I don’t ask…
To add to my above comment, Don also pointed out that Rancho Yolo cannot expect to not have water rate increases no matter what project is chosen. In fact, even no project will be costly to Rancho Yolo residents…
E Roberts Musser: “[i]In fact, even no project will be costly to Rancho Yolo residents…[/i]”
I think it is important that someone do the cost projections for the no-surface water project option so that the voters know what they are facing. The real rate increase for the project is not from the current basis, but compared to the no-project option.
David Thompson said . . .
[i]”One of my questions is what will the additional monthly costs be for the 262 mobile homes at Rancho Yolo. 80% of the Rancho Yolo residents are on fixed income. They do not have individual water meters. The park owner gets a bill and then splits it among the 262 homes and adds to their monthly bill.
I suspect that many Ranch Yolo residents do not have the discretionary income to take on a new cost.
Is anyone paying attention to their situation and status?”[/i]
In a word David . . . “yes”
With that said, there are very specific constraints that the combination of California Constitution Article XIII (Prop 218) and California Constitution Article X apply. The park owner will be billed fairly and proportionally based on those constraints once we come up with a rate. Feel free to contact me if you have specific concerns that you want to share.
Don Shor said . . .
[i]”David T.: what do you suggest? The ownership model of mobile home parks is a problem, rather separate from the project decision. Either project will significantly increase their water bills, and there’s not that much difference in the amount of increase. So getting individual meters to the residents may be the only option. Other ideas? I don’t think they can get different rates.”[/i]
Actually Don, two of the WAC members have come up with a new model that can address some of the issues you refer to. That model is being presented to the Department of Water Resources on Friday August 17th. We believe it will enhance fairness and proportionality for rate payers throughout California, as well as make the fiscal situation for water agencies both mored stable and more sustainable.
Mark West said . . .
[i]”I think it is important that someone do the cost projections for the no-surface water project option so that the voters know what they are facing. The real rate increase for the project is not from the current basis, but compared to the no-project option.”[/i]
Mark, if I look back at my personal vote, which was to remove a “groundwater only” option from further consideration, the significant challenge to what you suggest is that the overhelming consideration for me was the risk and uncertainty that such an option presented. Quantifying risk and uncertainty in dollars and cents terms is extremely difficult at best, if not impossible in this situation. The best that we can do is estimate some of the costs of the adverse outcomes that would (could) be generated by continuing to rely on groundwater as our sole water source.
Matt Williams: ” Quantifying risk and uncertainty in dollars and cents terms is extremely difficult at best, if not impossible in this situation. The best that we can do is estimate some of the costs of the adverse outcomes that would (could) be generated by continuing to rely on groundwater as our sole water source.”
That is very true Matt, but it shouldn’t be that difficult to estimate a range that represents the ‘best case’ to ‘worst case’ scenarios. In the discussion about how much our rates will be increased by the surface water project, it is important to understand how much they may increase without the project. If the ‘worst case’ risk inherent in not moving forward with conjunctive use is on the same order of magnitude as doing the surface water project, then it is much easier for voters to see the value in investing in surface water. We are talking about the multiple that our rates will increase with the project, so we should also be talking about the multiple that they may increase by standing pat. I don’t see that there is an option that keeps our rates where they currently are.
Mark West: I agree with you that there should be more comparisons done, such as the no project, where we deal with our current system and dont have a conjunctive system.
We are not in a rush here; the WAC has loads of time.
One thing that could be done is moving the city away from water the current water softener use or technologies.
Also, I disagree with the JPA use of ozone, as it produces bromates that have been linked to cancer.
Finally, I am interested in learning more about how to reduce the nitrate impact on our mid level wells and drinking water?
The WAC has not really studied these issues yet. I know there were early presentations, but I dont think they were objective enough or thorough.
Does anyone in the pro-JPAer group with Saylor seriously think that they can have their votes on the WAC cut off West Sacto research, and actually survive the election on the JPA? I dont see how they can get a win for the JPA in this town, when West Sacto looks so promising, and fairly easy and straight forward, and at a much lower cost.
One other thing: an EIR has to compare alternatives, and if it lacks West Sacto, and the opponents to the JPA lose the election, I think you will see a CEQA win in Superior Court for the opponents.
I dont see why the team of advisers and consultants that have pushed the JPA, and now stand behind Alf and his team, would want to take a chance on an election, and a CEQA case, where the West Sacto option has not been thoroughly studied. If I were their lawyer, I would make sure West Sacto is vetted.
[quote]Those RY residents should come this Thursday at 6:30 at CC Chambers and share their views with the WAC [/quote]
According to the article in Friday’s Enterprise, the 8/16 meeting will be held at the Senior Center. I didn’t see mention of a venue change on the WAC website, though.
.
But …. this is the same gang who gave us the JPA, loss of control over our water supply, United Water and its felony indictment in Indiana for allegedly tampering with testing data, the Sept 6th bogus rates, the Souza Blockers, the City Attorney Memo written apparently written by a college student who concluded that the referendum was unconstitutional, etc etc. So nothing surprises me with that bunch.
Jim: Yes! My mistake. I was informed today by Pam that the DJUSD is meeting at CC Chambers, so the WAC is over at the Senior Center, 6:30 pm. SOrry abut that slip.
I know that CC public comments is the best 30 minute show in town, most weeks, but I suggest coming to this WAC meeting and giving public comments. It’s live on cable TV and streaming Internet.
[quote]E Roberts Musser: “In fact, even no project will be costly to Rancho Yolo residents…”
I think it is important that someone do the cost projections for the no-surface water project option so that the voters know what they are facing. The real rate increase for the project is not from the current basis, but compared to the no-project option.[/quote]
Here is but one aspect of the “cost” of doing [u][b]no[/b][/u] project from the SWRCB:
[quote]If a community is not moving forward with a project that will aid in meeting wastewater discharge standards as set forth in an adopted permit, the RWQCB can assess discretionary fines up to $10,000 a day, plus $10 a gallon for every gallon discharged. Under state law, the RWQCB may also collect the amount of money saved by not coming into compliance, ata a minimum ([u][b]the cost of a project[/b][/u], for example).[/quote]