In the end, if this is indeed the end, the Davis Water Advisory Committee went where city staff clearly was guiding them and where they were most comfortable. I know that evaluation is not going to sit particularly well with some, and my only hope is that those will at least be willing to hear me out.
The WAC, in the end, did an admirable job, but by the end of the meeting on Thursday, it was clear which way they were headed, even as there were a large amount of questions that some simply did not want to pursue, at least at the last meeting.
I am going to focus this portion of the analysis on costs, because at the end of the day, I think costs are going to drive much of the next six months.
We will start with the water bill comparison. The rate consultant compared four different projects: the one West Sacramento alternative, the main Woodland alternative, and two options that either delay the financing or phase the project.
The take-home message is rather simple – the main Woodland project is the most expensive by a large margin over the next seven years, and it is not until 2024-2026 that the others catch up, and in most cases pass the cost of the main Woodland option.
The simple message at this point is that in the long run, the other options are more expensive, except for West Sacramento which is about the same. More on that in a moment.
In current dollars that are inflation-adjusted, it would appear that the main Woodland project peaks in 2020, the West Sacramento Project peaks about 2027 but at a much lower level, and the two phased projects peak about 2029. By 2035, they are all about the same in real dollars.
Let us think about this for a moment. The Woodland project sees rates nearly triple in absolute dollars and double in current dollars over the next five or six years. I would argue, contrary to the analysis of many, that the next five years are the most important time period, rather than the period of 2025 to 2035.
Why do I say that?
There is a tendency to argue that this is a selfish view, that we are deferring costs from ourselves to the next generation. First of all, I will remind people that in 2035, I would only be 62 years old, so there is a reasonable chance I will be around to pay these costs.
But more importantly, the point in time when people are going to be hurt by these rates is at the inflection points when the rates spike. In that analysis, the rate of increase matters more than the absolute costs, because once costs stabilize, people can adjust their spending while periods where there are rapid increases in costs, people are going to be hurt the most.
From that standpoint, the main Woodland option is actually the worst because it has the steepest immediate rate increases. In fact, from 2013 until 2023, the main Woodland project is the most expensive project alternative.
There is a period of time when the other project alternatives increase in costs while the main Woodland one declines. But that is a short period from 2024 until 2028. During that time, the two alternative Woodland projects increase in costs, but only by as much as $7 per month over the entire time period.
At no point is the main Woodland project more than $10 per month more expensive. And by 2035, their costs mainly converge.
Now that is in current dollars, but that is how we need to examine actual impact.
One of the points that was hammered home was risk and uncertainty advantage of the Woodland project over the West Sacramento project. I understand those points, which is why I think recasting the analysis here shows that perhaps the main Woodland project does not have the advantage over the alternative Woodland projects that some would argue.
There is a second point, and it is one that Sue Greenwald and Michael Harrington raised on Thursday night – the analysis shows that building a whole new project is nearly as expensive as tapping into excess capacity.
If I am going to criticize the WAC in the coming months on the job that they performed, it is in their lack of challenge to these critical assumptions. I have to admit, neither person is the best messenger, but their questions are still very valid and this community is going to be asking them when the time comes for the election.
This is an easy campaign point to drive home – question the assumptions when they are counterintuitive. In a political campaign, counterintuitive questions that require a difficult explanation lose.
This is again where I really need to question the Chair of the WAC. Her response last night on the Vanguard is indicative of her approach overall.
She writes: “…or all of you who doubt the estimated costs for West Sacramento and Woodland as estimated by staff/consultants, please explain what data/information you are using to back up your contention the figures given are inaccurate. It is easy to say ‘I don’t believe it’; but quite another to back up your contention with some evidence.”
In her own profession, this would be called burden shifting. The burden of proof is on the consultant who creates the model, not the skeptic questioning the unstated assumptions of the model and the findings.
We need to know this answer – because right now it makes no sense that the two projects would be roughly the same in costs.
Finally, I do not want to completely dismiss Alf Brandt’s motion because I think he actually gets something that many have seemed to have forgotten. As long as there is a chance that we can go elsewhere, we hold a lot of leverage.
Woodland can go it alone, but the costs of doing that will be enormous. So I think Davis needs to use some of that leverage to force Woodland to pay for some of the costs, particularly since they are driving the timing of the project more than Davis.
Furthermore, I have a lot of questions about going to a DBO process and private ownership. I do think that the issue of costs, the counter-intuitive argument on West Sacramento’s costs versus Woodland’s costs, and private ownership could be enough for the critics in a contested March election to defeat this project.
And that is the final point that I will make. During this process I was moved a lot closer to supporting a project than I was back in December when the process was shelved for further study.
Unfortunately, I am disappointed in where we are now.
First, there are too many unresolved questions for me to support a Woodland project at this point. Second, I still feel like staff drove the WAC back to Woodland and that some of the members of WAC failed to ask questions, particularly on Thursday, that needed to be asked. Finally, unless someone walks me through it, I find it impossible to believe the numbers of West Sacramento versus Woodland.
But there is a more fundamental issue. The underlying assumption is that the best strategy is to mitigate long-term costs. But if you really look at where the impact of rate increases is going to be, it is not going to be on people in ten to twenty years from now, it is going to be most painful at the point of the steepest curve for the rate increase. Softening that blow will actually benefit people far more in the near term than it will burden people in the long term.
Unfortunately, that is a point that is being lost on people because it is easy to say, as they did on Thursday, that every option is going to have pain. That is true, but not every option is going to have the same amount of pain concentrated in a small period of time.
To make this point a different way, it is more difficult for me to adjust to a very steep but short-term rate increase than it is for me to adjust to a longer but more shallow one. Over time, people can adjust their spending far more easily than they can in the short term. And inflation will ease a lot of that longer term pain.
Bottom line for me: if we are to look at Woodland because we really believe that the risk and uncertainty is lower, I want the WAC to re-examine the alternatives because, even then, I think they might be doing the wrong thing.
All of that being said, the most disappointing thing is that in a few weeks we may have mostly been able to come together with a more or less consensus project that was limited in scope but able to meet our longer term discharge and water supply needs. Going to Woodland with the JPA project undermines that, and I believe we are going to end up with a very contentious election. Those assuming the voters will support a surface water project in the long run probably have similar thought processes to those who believed that the city would support Covell Village in the long run, as well.
—David M. Greenwald reporting
David
I was able to understand your points right up to the end.
[quote]Going to Woodland with the JPA project undermines that and I believe we are going to end up with a very contentious election and those assuming the voters will support a surface water project in the long run probably have similar thought processes to those who believed that the city would support Covell Village in the long run as well.[/quote]
Can you explain what “similar thought processes ” you are referencing here ?
David Greenwald said . . .
[i]”The take home message is rather simple – the main Woodland project is the most expensive by a large margin over the next seven years and it is not until 2024-2026 that the others catch up and in most cases pass the cost of the main Woodland option.”[/i]
David, throughout this article you are confusing two related, but different terms . . . costs and cash flows. Looking at project costs for the two projects in time increments really doesn’t make sense to me. The kind of time increment view you are looking to delve into is much more appropriately one of cash flows rather than costs.
If you look at each project from the perspective of its cash flow requirements, the point you are making . . . that the cash flow requirements of the Woodland project are greater in the early years and the cash flows of the West Sac project are greater in the later years . . . does indeed apply.
Which brings me to a question , , , can the timing of the cash flow requirements be sychronized in order to make the two projects equivalent?
And to a second question . . . what factors drove the timing of the cash flow requirements of the West Sac project in the Bartle Wells numbers?
David: what if Woodland made us a proposal to just buy their water? No CC links; no JPA. Anyone have comments?
[quote]dmg: In the end, if this is indeed the end, the Davis Water Advisory Committee went where city staff clearly was guiding them and where they were most comfortable. I know that evaluation is not going to sit particularly well with some, and my only hope is that those will at least be willing to hear me out.
The WAC, in the end, did an admirable job, but by the end of the meeting on Thursday, it was clear which way they were headed, even as there were a large amount of questions that some simply did not want to pursue, at least at the last meeting.[/quote]
With all due respect, the WAC has made no decision yet. A motion is on the table for discussion purposes.
[quote]dmg: I am going to focus this portion of the analysis on costs, because at the end of the day, I think costs are going to drive much of the next six months.[/quote]
I’m assuming the Vanguard’s position is that COST is the most important factor in a cost/risk/benefit analysis, and does not consider other risks to be particularly important? Others may feel differently. Cost is only one factor in a cost/risk/benefit analysis. The fact of the matter is there are many risk factors, to list just a few:
1) We still don’t know what kind of contracts West Sac is willing to work out – they are not saying;
2) We will be a customer of West Sac and not a partner; West Sac has said they want to remain completely in control of their decision making, yet their decision making may very well effect our city;
3) Because the pipeline has to go through the Yolo Bypass, a wildlife sanctuary, that could be very problematic in terms of CEQA review;
4) The length of time required to complete the process of splitting water rights and doing a CEQA/EIR review for the West Sac project will take from 4 to 6 years;
[quote]dmg: From that standpoint, the main Woodland option is actually the worst because it has the steepest immediate rate increases. In fact, from 2013 until 2023, the main Woodland project is the most expensive project alternative.[/quote]
The Vanguard neglects to mention there are two Woodland/Davis Option A alternative 4B options, one with delayed financing.
[quote]dmg: There is a second point, and it is one that Sue Greenwald and Michael Harrington raised on Thursday night – the analysis shows that building a whole new project is nearly as expensive as tapping into excess capacity.
If I am going to criticize the WAC in the coming months on the job that they performed, it is in their lack of challenge to these critical assumptions. [/quote]
Please go back and review the videotapes of the meetings. There was no lack of challenge by WAC members to critical assumptions. In fact city staff met with several WAC members above and beyond WAC meetings to address any such concerns. We also have another meeting on Aug 16 to address such concerns. WAC members/public can also submit such concerns to city staff between now and the Aug 16 WAC meeting.
[quote]dmg: She [WAC Chair] writes: “…or all of you who doubt the estimated costs for West Sacramento and Woodland as estimated by staff/consultants, please explain what data/information you are using to back up your contention the figures given are inaccurate. It is easy to say ‘I don’t believe it’; but quite another to back up your contention with some evidence.”
In her own profession, this would be called burden shifting. The burden of proof is on the consultant who creates the model, not the skeptic questioning the unstated assumptions of the model and the findings.
We need to know this answer – because right now it makes no sense that the two projects would be roughly the same in costs.[/quote]
First of all, the court analogy is inapt. The WAC is not a court of law.
Secondly – in other words the Vanguard has no answer to my question? The specific numbers have been given for the projected costs of the West Sac project, e.g. agency administration, environmental and permitting, land/right of way ascquisition, capital contingency, engineering legal and administrative, construction (intake, raw water pipelines, water treatment facility, Davis treated water pipeline, in-line booster pump station, costs expended (Sept 2009 – June 2011), local facility costs, West Sac connection fee, operation and maintenance, annual debt service. Exactly which of these figures is the Vanguard quibbling with? To just say “I don’t believe the figures” doesn’t explain anything. Anyone can make the claim “I don’t believe it” when the figures don’t work out the way they want them to. The Vanguard needs to be more specific as to which numbers it believes are incorrect. If it cannot, then it doesn’t have much of a leg to stand on with the argument “I don’t believe the figures”.
Is it that the Vanguard doesn’t [b]believe[/b] the figures, or is it the Vanguard doesn’t [b]like[/b] the figures? Because I don’t think anyone on the WAC likes the figures. We are painfully aware that whatever surface water is decided upon is going to hit the pocketbooks of us all very hard. But we also are well aware that a conjunctive use project is necessary for the future of our water supply.
[quote]dmg: Finally, I do not want to completely dismiss Alf Brandt’s motion because I think he actually gets something that many have seemed to have forgotten. As long as there is a chance that we can go elsewhere, we hold a lot of leverage.
Woodland can go it alone, but the costs of doing that will be enormous. So I think Davis needs to use some of that leverage to force Woodland to pay for some of the costs, particularly since they are driving the timing of the project more than Davis.
Furthermore, I have a lot of questions about going to a DBO process and private ownership. I do think that the issue of costs, the counter-intuitive argument on West Sacramento’s costs versus Woodland’s costs, and private ownership could be enough for the critics in a contested March election to defeat this project.[/quote]
Yes, there is a lot of thinking that has to go into whether Alf’s motion is the one the WAC wants to get behind. WAC members have to do some soul searching on their own, ask questions of city staff/consultants, and then bring their ideas to the table at the next WAC meeting scheduled for Aug 16. I expect it to be a lively and robust discussion.
[quote]dmg: But there is a more fundamental issue. The underlying assumption is that the best strategy is to mitigate long-term costs. But if you really look at where the impact of rate increases is going to be, it is not going to be on people in ten to twenty years from now, it is going to be most painful at the point of the steepest curve for the rate increase. Softening that blow will actually benefit people far more in the near term than it will burden people in the long term.
Unfortunately, that is a point that is being lost on people because it is easy to say, as they did on Thursday, that every option is going to have pain. That is true, but not every option is going to have the same amount of pain concentrated in a small period of time.
To make this point a different way, it is more difficult for me to adjust to a very steep but short-term rate increase than it is for me to adjust to a longer but more shallow one. Over time, people can adjust their spending far more easily than they can in the short term. And inflation will ease a lot of that longer term pain.[/quote]
Again, I urge you to look at Alternative A Option 4B costs deferred via financing methods…
[quote]dmg: All of that being said, the most disappointing thing is that in a few weeks we may have mostly been able to come together with a more or less consensus project that was limited in scope but able to meet our longer term discharge and water supply needs. Going to Woodland with the JPA project undermines that, and I believe we are going to end up with a very contentious election. Those assuming the voters will support a surface water project in the long run probably have similar thought processes to those who believed that the city would support Covell Village in the long run, as well.[/quote]
I don’t want to put words in the mouth of the Vanguard, but what this sounds like is it is the opinion of the Vanguard if the WAC chooses a Woodland project and does not opt for the West Sac option, then the city can expect a very contentious election? And how would the Vanguard know what is in the mind of WAC members, the voters, etc. as to which project is best? The WAC doesn’t even know what it will decide, whether Alf’s motion will be amended, amended substantially, voted down altogether, etc. No decision has been made yet…
David: [i]… right now it makes no sense that the two projects would be roughly the same in costs. [/i]
I’ve pulled some of the major costs out of the supporting documentation that was provided. These cost comparisons are through 2021:
[img]http://davismerchants.org/water/waterprojectcostssimple.png[/img]
[url]http://davismerchants.org/water/waterprojectcostssimple.png[/url]
The main difference is the ongoing water connection fee and the fact that Davis will pay the full cost of a treated water pipeline from West Sac.
David: [i]I have a lot of questions about going to a DBO process and private ownership. …
… there are too many unresolved questions for me to support a Woodland project at this point. [/i]
So I suggest you put those questions in writing and submit them to the WAC as soon as possible.
[i]most disappointing thing is that in a few weeks we may have mostly been able to come together with a more or less consensus project that was limited in scope but able to meet our longer term discharge and water supply needs. Going to Woodland with the JPA project undermines that …[/i]
What “consensus project” is that? The West Sac option? Based on other posts, it won’t be possible to price that out without making a commitment, which involves abandoning the JPA options. On what basis do you consider there is, or was, any consensus for that project? It involves risks and delays, has water quality issues, and the ownership vs. contract relationship is problematic to many. Those aren’t issues you’re going to solve by further statistical analysis.
[i]I believe we are going to end up with a very contentious election. [/i]
We have been promised a very contentious election in the event of a WAC decision favoring any of the Woodland projects. How do you suggest we avoid a contentious election?
Elaine said [quote] Because the pipeline has to go through the Yolo Bypass, a wildlife sanctuary, that could be very problematic in terms of CEQA review[/quote]
Wouldn’t the logical route be north of the railroad, which isn’t part of the Vic Fazio Wildlife Refuge? It’s actively farmed, so even if it has some sort of regulatory designation, I wouldn’t think that a pipeline installation would be a problem.
Don wrote [quote]The main difference is the ongoing water connection fee and the fact that Davis will pay the full cost of a treated water pipeline from West Sac. [/quote]
Won’t Davis have to pay the full cost of the treated water pipeline from Woodland? The distances are comparable.
[quote]Wouldn’t the logical route be north of the railroad, which isn’t part of the Vic Fazio Wildlife Refuge? It’s actively farmed, so even if it has some sort of regulatory designation, I wouldn’t think that a pipeline installation would be a problem. [/quote]
Unfortunately we don’t know exactly where the pipeline will go, be allowed to go, to what extent we can obtain the appropriate easements. It is a big question mark…
[quote]Won’t Davis have to pay the full cost of the treated water pipeline from Woodland? The distances are comparable. [/quote]
We’re hoping to get Woodland to share in the cost of the pipeline between Woodland and Davis…
[quote]We’re hoping to get Woodland to share in the cost of the pipeline between Woodland and Davis… [/quote]
I’d be interested in hearing the logic behind this. Has anyone asked the Woodland taxpayers whether or not they’d like to subsidize the pipeline to Davis? And if it’s only at the “hoping” stage, why is such a large subsidy included in the budget projection?
.
Rush? What Rush? This could be a good or bad decision but rushed it is not.
The Vanguard neglects to mention there are two Woodland/Davis Option A alternative 4B options, one with delayed financing
Elaine: paragraph four
Matt, I am looking at the two water bill comparison charts one in absolute and one in current dollars. I posted them yesterday
I don’t want to put words in the mouth of the Vanguard, but what this sounds like is it is the opinion of the Vanguard if the WAC chooses a Woodland project and does not opt for the West Sac option, then the city can expect a very contentious election? And how would the Vanguard know what is in the mind of WAC members, the voters, etc. as to which project is best? The WAC doesn’t even know what it will decide, whether Alf’s motion will be amended, amended substantially, voted down altogether, etc. No decision has been made yet…”
Yes that is my view.
I counted the votes and anticipate. But the analysis does not depend on what the WAC ultimately does, it only matters where things stand now. Most of it is a cost analysis which argues three points: 1 – woodland main is toughest on rate payers 2 – immediate pain trumps long term costs and 3 – questions rate assumption comparison WSAC v. WOOD
David M. Greenwald said . . .
[i]”Matt, I am looking at the two water bill comparison charts one in absolute and one in current dollars. I posted them yesterday.”[/i]
I realize that is what you are looking at David, but from your perspective are those cost reports or cash flow reports?
Water bill comparisons:
[img]http://davismerchants.org/water/waterbillcomparison1.png[/img]
[img]http://davismerchants.org/water/waterbillcomparison2.png[/img]
They appear to be average water rates – monthly bills. If that’s wrong then my analysis is flawed.
[quote]erm: The Vanguard neglects to mention there are two Woodland/Davis Option A alternative 4B options, one with delayed financing
dmg: Elaine: paragraph four[/quote]
Should have said “The Vanguard analysis neglects to mention…”. The reason I say this is your analysis talks about rate spiking, to wit:
[quote]But more importantly, the point in time when people are going to be hurt by these rates is at the inflection points when the rates spike. In that analysis, the rate of increase matters more than the absolute costs, because once costs stabilize, people can adjust their spending while periods where there are rapid increases in costs, people are going to be hurt the most.
From that standpoint, the main Woodland option is actually the worst because it has the steepest immediate rate increases. In fact, from 2013 until 2023, the main Woodland project is the most expensive project alternative.[/quote]
But look at the charts. The Woodland option with costs deferred via financing options tends to flatten out the rate spiking. By the way, I’m not as clear in my mind about all of this either, so am asking staff a lot of questions. I would suggest if you have questions/concerns, submit them to staff…
David, it isn’t that your analysis is flawed. It is that the whole situation is very complex. The reason I make the costs/cashflow differentiation is that the trajectories of those curves can be changed substantially by managing cashflow requirements. The area under the curve won’t get any smaller, but the upward bulge in the early years can be flattened out if one is willing to accept a “higher curve” in the later years.
NOTE: All of that curve manipulation is independent of the project choice.
[quote]erm: We’re hoping to get Woodland to share in the cost of the pipeline between Woodland and Davis…
Jim Frame: I’d be interested in hearing the logic behind this. Has anyone asked the Woodland taxpayers whether or not they’d like to subsidize the pipeline to Davis? And if it’s only at the “hoping” stage, why is such a large subsidy included in the budget projection? [/quote]
I’m asking the same questions of staff…
[quote]Yes that is my view.
I counted the votes and anticipate. But the analysis does not depend on what the WAC ultimately does, it only matters where things stand now. Most of it is a cost analysis which argues three points: 1 – woodland main is toughest on rate payers 2 – immediate pain trumps long term costs and 3 – questions rate assumption comparison WSAC v. WOOD[/quote]
Counted what votes? The WAC didn’t take a vote. The voters haven’t take a vote. ??? Most of it is cost analysis? Not everyone agrees that cost is the only issue. I would argue most people believe this is a risk/benefit/cost analysis, not just a cost analysis.
As to each of your points:
1) Which Woodland project? What do you mean by toughest? I won’t tell you what I am thinking, but I am checking w city staff to make sure my thinking on this issue is correct…
2) There is immediate pain for any choice of surface water project. But look at the charts to determine how much difference between the projects. What figure do you come up with? Just checking to see if you and I are on the same wavelength. Again, I am checking this w staff to make sure my logic is correct on this one…
3) Question rate assumptions in what way? How? Just that you don’t believe them bc they didn’t meet your preconceived notion of how it should be/what you expected? What specific part of the project costs do you feel are incorrect and why?
If I’m following David’s logic here, the concern is that the costs spike earlier for the Woodland project (original, not delayed-cost version). Even though those costs would be lower in the long run, the earlier run-up in costs is somehow worse.
I find it hard to believe that Davis voters would be that short-sighted, if they understand the actual long-term costs of the various projects, the risks and benefits of each alternative, and the difference in water quality. Especially when the difference to water bills is relatively small between the projects.
Those who oppose any near-term surface water project will try to argue that the figures must be wrong, or they will impugn the experts who provide them. That is why it is, in fact, up to them to explain what they “don’t believe.” It’s one thing to be skeptical and ask for clarification. I don’t know what all the underlying assumptions are, and have no quarrel with those seeking harder numbers. But to just say “I don’t believe” is tantamount to saying “I don’t want to believe.”
Again, David, I urge you to put your questions in writing and submit them to the WAC. I also urge Sue Greenwald and MIke Harrington to do likewise. Otherwise, the objections just seem like posturing.
When you look at this chart, it’s pretty clear to me what the best long-term option is for Davis.
[img]http://davismerchants.org/water/waterprojectcostschart.png[/img]
Let’s not be short-sighted again, as Davis civic leaders were sixty years ago when they opted out of a high-quality, abundant water supply.
Elaine:
“Counted what votes? The WAC didn’t take a vote.”
It appears you don’t understand the concept of counting votes. It’s something that occurs before the vote takes place when you anticipate an outcome. Watching the discussion there were enough votes to pass the main Woodland option.
“Most of it is cost analysis?”
I was referring to my article.
“1) Which Woodland project? What do you mean by toughest? I won’t tell you what I am thinking, but I am checking w city staff to make sure my thinking on this issue is correct… “
Woodland Main is the project that is not phased or cost-deferred. Toughest meaning the steepest rate increase
2.
“There is immediate pain for any choice of surface water project. “
A point I made in the article, but the degree of pain and length of pain is variable depending on the project.
“But look at the charts to determine how much difference between the projects. What figure do you come up with? Just checking to see if you and I are on the same wavelength. Again, I am checking this w staff to make sure my logic is correct on this one… “
It appears to me that the Woodland main project has the steepest immediate rate increase, the others are deferred. I feel that is important because the biggest impact on the ratepayer will be during times of rapid increase. Eventually the ratepayer adjusts and plans.
“3) Question rate assumptions in what way? How? Just that you don’t believe them bc they didn’t meet your preconceived notion of how it should be/what you expected? What specific part of the project costs do you feel are incorrect and why?”
This is the critical point. My expectation is that there should be a substantial difference in teh cost of building into a project versus tapping in existing capacity. There isn’t. That doesn’t make intuitive sense and I would like to understand how that is the case.
“When you look at this chart, it’s pretty clear to me what the best long-term option is for Davis. “
But when you look at the rates – particularly in the current dollars analysis, it paints a very different picture. The rate difference per month is less than ten dollars despite the discrepency in annual costs.
To be the change in rate is more important than the actual rate. You adjust your spending over time, but during times with rate increases, that’s when it harms your pocketbook.
[quote]I’m asking the same questions of staff… [/quote]
It looks to me like the Woodland “contribution” to the Davis treated water pipeline is figured at around 33%, or roughly $7M. I base that on the fact that the pipeline distances for the West Sac and WAC 4b options are roughly the same, and so am assuming rough equivalency of construction costs. (Note that the estimates for ROW acquisition and permitting are figured separately for each project.) If accurate, that would bring the gap between the West Sac and WAC 4b scenarios to about $30M, rather than the $23M currently shown.
It’s also worth noting that the West Sac construction cost figures are inflated by 35%, versus 20% for the 4b option, due to the less-advanced state of the West Sac design. Given the relatively simple nature of the West Sac option (emphasis on “relatively”!), I’m wondering how realistic it is to assign those costs a contingency that’s 15% higher than those of 4b.
.
vanguard: “In the end, if this is indeed the end, the Davis Water Advisory Committee went where city staff clearly was guiding them and where they were most comfortable. I know that evaluation is not going to sit particularly well with some, and my only hope is that those will at least be willing to hear me out. “
Question: On what grounds does the vanguard make that claim? does the vanguard know what the thinking is of each committee member? How does the vanguard know which members are leaning toward a woodland option, and if so, which of those options are they leaning? Reading through this article we have “heard you out”, and it does not appear you have justified your position.
“does the vanguard know what the thinking is of each committee member?”
No. But the Vanguard doesn’t need to either. It only needs to count to six. However, if Elaine is claiming she is unsure (which I’m skeptical of), I can only count to five at the moment.
No. But the Vanguard doesn’t need to either.
actually it does, because it made the assertion each member on the committee is already in favor of a project before a vote is taken, and that its made is being made up for them by city staff. If you are going to make that claim you should back it up. or shut up.
btw: one questions whether you were actually at the meeting, because for all your assertions of what the committee thinks and who is telling them what to do, you don’t actually have any analysis of anything that was actually said at the meeting.
“actually it does, because it made the assertion each member on the committee is already in favor of a project”
That’s not what was stated. The comment referred to the (eventual) action of the WAC which requires six votes not ten.
“one questions whether you were actually at the meeting”
I was sitting right behind you.
David M. Greenwald said . . .
[i]”It appears you don’t understand the concept of counting votes. It’s something that occurs before the vote takes place when you anticipate an outcome. Watching the discussion there were enough votes to pass the main Woodland option.”[/i]
David, I do not agree with you that there were enough votes to pass the main Woodland option. My own speculation is that there were only 4 votes for, 3 votes that feel an 8-2 majority is needed to avoid political complications come March, 1 vote that feels a thorough discussion of DBO needs to take place prior to voting for the main Woodland option, and 2 votes against. With that breakout I believe you are wrong, and there were not enough votes on Thursday.
David Greenwald said . . .
[i]”There is immediate pain for any choice of surface water project.
A point I made in the article, but the degree of pain and length of pain is variable depending on the project.” [/i]
David, you are again confusing cash flow with cost. The speed of pain onset for any and all projects is a function of cash flow decisions that are made about how specifically to finance respective projects. The same project can be either incredibly painful in the early years or very mildly painful depending on how you manage the cash flows.
David M. Greenwald said . . .
[i]”No. But the Vanguard doesn’t need to either. It only needs to count to six. However, if Elaine is claiming she is unsure (which I’m skeptical of), I can only count to five at the moment.”[/i]
David, as I noted above I believe the political realities of the situation are that you have to count to 8, not to 6.
Elaine, hope you’ll find time after this WAC decision to do a follow up to your story about the senior shenanigans. In today’s mail came an 8×11 envelope with a fancy, saddle-stitched printing of the proposed bylaws, along with a pretty colored invitation sheet to the meeting to vote on the massive changes. In the same mail was a postcard that argued that the new bylaws don’t mean what they say, justifying the massive changes as necessary for legal reasons and some vague statement about “best practices” or something—and cancelling the meeting.
Not just withdrawing the proposal that has gotten everyone in town over 55 all riled up, but cancelling the meeting itself (rather than having the courage to listen to what people have to say). The discredited board announces it’s reworking the bylaws again instead of leaving them alone as the membership wants, including the generous benefactor who wrote a strong letter opposing the action. Instead, the board should resign since it thoroughly has lost the trust of the membership and the entire senior community in Davis.
Please get back on this story as soon as you get the water supply issue resolved. Thanks.
Jim Frame said . . .
[i]”It looks to me like the Woodland “contribution” to the Davis treated water pipeline is figured at around 33%, or roughly $7M. I base that on the fact that the pipeline distances for the West Sac and WAC 4b options are roughly the same, and so am assuming rough equivalency of construction costs.” [/i]
Jim, based on measurements I made on Google Earth the pipeline distance from the West Sac site to the City Limits is 8.5 miles, and the the pipeline distance from the Woodland site to the City Limits is 6.0 miles. That is a distance ratio of 1.25 to 1.0. If you normalize the risk contingencies for both to 0% the West Sac pipeline cost is $28,324,000 and the Woodland pipeline cost is $19,107,000, which is a cost ratio of 1.48 to 1.0. The West Sac Risk Contingency @ 35% is an additional $9,913,000. The Woodland Risk Contingency @ 20% is an additional $3,821,000.
Jim Frame said . . .
[i]”It’s also worth noting that the West Sac construction cost figures are inflated by 35%, versus 20% for the 4b option, due to the less-advanced state of the West Sac design. Given the relatively simple nature of the West Sac option (emphasis on “relatively”!), I’m wondering how realistic it is to assign those costs a contingency that’s 15% higher than those of 4b.” [/i]
I’ve created a spreadsheet that normalizes out all the Risk Contingencies. In absolute terms, before risk contingency calculations here are the category differences between Alternative 2c: the 12 mgd Davis-Only West Sacramento Alternative and DWWSP Option A, WAC Alternative 4b: the 30 mgd DWWSP Project; Woodland: 18 mgd, Davis: 12 mgd.
($1,307,000)Agency Administration -80.9%
$1,014,000 Environmental and Permitting 91.3%
$897,000 Land/RW Acquisitions 168.9%
$0 Capital Contingency 0.0%
($1,607,000)Engineering, Legal and Administrative -11.6%
Construction
($4,568,462) Intake -94.2%
($8,609,167) Raw Water Pipelines-100.0%
($23,084,231) Water Treatment Facility -70.9%
$9,216,944 Davis Treated Water Pipeline 48.2%
$0 In-Line Booster Pump Station 0.0%
$0 Costs Expended (Sept. 2009 – June 2011) 0.0%
($283,000)Local Facility Costs -1.9%
$12,556,000 West Sacramento Connection Fee 100.0%
($15,774,915)Total -15.7%
Interestingly enough, because of the overall 5% Capital Contingency the JPA applies to their costs, the calculations of risk contingencies are $12,879,248 for Alternative 2c: the 12 mgd Davis-Only West Sacramento Alternative and $16,525,333 for DWWSP Option A, WAC Alternative 4b: the 30 mgd DWWSP Project; Woodland: 18 mgd, Davis: 12 mgd. The big downward movers (the Raw Water Pipelines and the Water Treatment Facility) are largely offset by the big upward movers (the Davis Treated Water Pipeline and the West Sacramento Connection Fee).
I know this is not the way that standard AACE practice says to do things, but it does illuminate several key points. 1) how much of an impact Risk and Uncertainty has, and 2) where that impact is. I believe those two points are very germane to the political aspects of the decision the WAC is making.
“David, as I noted above I believe the political realities of the situation are that you have to count to 8, not to 6.”
I agree in part with this point. I agree that 8 is needed to forestall a political fight. However, I’m not sure that’s enough to prevent a majority of six from moving forward.
[quote]Jim, based on measurements I made on Google Earth the pipeline distance from the West Sac site to the City Limits is 8.5 miles, and the the pipeline distance from the Woodland site to the City Limits is 6.0 miles.[/quote]
Using the graphic from the January 12 DWWSP background report, I get about 7.2 miles from the south edge of the proposed treatment facility to the Davis city limits (north edge of the Wildhorse golf course). The graphic indicates that Woodland’s treated water line runs west from the plant, so I’m assuming the plant is the point of departure for the two treated water lines. Has the site of the treatment facility been changed?
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Clarification: I used the report graphic to locate the treatment plant on Google Earth, and then did the measurement on Google Earth.
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To Jim Frame: I don’t have the time to delve into your question and slog through minutes/videotape/JPA minutes, but check w staff. For some reason I vaguely remember the site for the WTF was changed…
To JustSaying: I’m on it. See Davis Enterprise article in today’s (Sunday’s) paper. The Aug 14 meeting to vote on the bylaws has NOT been officially cancelled and will take place…
[quote]dmg: It appears you don’t understand the concept of counting votes. It’s something that occurs before the vote takes place when you anticipate an outcome. Watching the discussion there were enough votes to pass the main Woodland option. [/quote]
It appears you don’t understand the concept of “don’t count your chickens until they hatch”! Were you sitting in the same meeting I was sitting in? A motion was placed on the floor for the Woodland project without conditions that didn’t even get a second. The motion that is on the floor for a Woodland option w conditions has had no opportunity to even be discussed. The Vanguard has no idea how WAC members would vote on such a motion; has no idea whether this motion will pass legal muster; has no idea if it will be amended, modified, voted down, or whatever. In short the Vanguard seems to be merely guessing as to what it thinks will happen based on its own biases or whoever the Vanguard happens to be listening to at the moment, a very flimsy if nonexistent basis at best…
[quote]dmg: Toughest meaning the steepest rate increase… A point I made in the article, but the degree of pain and length of pain is variable depending on the project…It appears to me that the Woodland main project has the steepest immediate rate increase, the others are deferred. I feel that is important because the biggest impact on the ratepayer will be during times of rapid increase. Eventually the ratepayer adjusts and plans. [/quote]
Steepest rate increases when? Take a second look at the charts. The degree of pain and length very much depends on which project AND TIME INTERVAL… and did you look at the AMOUNT of rate increase between various projects? Set your biases aside if you can, and try and take a very critical look at the charts…
Also refer to Matt William’s comment: “David, you are again confusing cash flow with cost. The speed of pain onset for any and all projects is a function of cash flow decisions that are made about how specifically to finance respective projects. The same project can be either incredibly painful in the early years or very mildly painful depending on how you manage the cash flows.”
[quote]dmg: This is the critical point. My expectation is that there should be a substantial difference in teh cost of building into a project versus tapping in existing capacity. There isn’t. That doesn’t make intuitive sense and I would like to understand how that is the case. [/quote]
The costs are laid out in chart form, so are easy to read. Which figures don’t you agree with? The connection fee? Environmental and Permitting? Land aquisitions? Davis Treated Water Pipeline?
[quote]However, if Elaine is claiming she is unsure (which I’m skeptical of), I can only count to five at the moment.[/quote]
Just for the record, and yes I am shouting, I HAVE NOT MADE UP MY MIND IN ANY WAY, SHAPE, OR FORM!!! Unless the Vanguard knows something I don’t about my own mind… 😉
[quote] For some reason I vaguely remember the site for the WTF was changed.[/quote]
The Water Treatment Facility has an unfortunate initialization.
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FYI, there’s a May 2012 RFP for WTF site dewatering that shows it in the same location as the January graphic, i.e. north of the Woodland WWTP where Ponds 7 and 8 are currently located.
To Jim Frame: I advise checking w staff on this one. All I can tell you is I just barely remember them deciding to change the site, but I couldn’t tell you from where to where, and whether the site change makes a significant difference in distance from Davis… 😉
It’s kind of a moot point for purposes of the treated water line cost discussion, because I was using January cost figures anyway.
[quote]It’s kind of a moot point for purposes of the treated water line cost discussion, because I was using January cost figures anyway.[/quote]
Hey, there is so much information, it is hard to keep all of it straight. I’m just glad you are engaged in taking a serious look at the various options… 😉