COMMENTARY – When the WAC passed a compromise motion in mid-August they were clear that Woodland was their preferred alternative. Indeed, several of the members of the WAC actually would have preferred recommending the Woodland option and moving on.
However, a sizable minority of the membership preferred keeping the West Sacramento alternative on the table for a variety of reasons.
Included within the motion, however, were changes to the current agreement with Woodland. This included a provision “that both cities share in the cost of the pipelines to convey the treated water to the city limits of each city” and that “the cost share percentages of the entire project change to reflect the current anticipated reliance on the treatment facility.”
While the WAC has done a commendable job weighing through complex and complicated issues, from a strategic standpoint, and in hindsight, this is looking like a mistake.
The first problem is that the city of West Sacramento, and very understandably, is not willing to negotiate with the city of Davis on a West Sacramento alternative when the WAC, and to some extent the Davis City Council, has very clearly indicated that Woodland is their first preference.
And while there are some good reasons to consider West Sacramento as an alternative, the lack of ownership and joint governance represents a huge barrier for many to take the West Sacramento option more seriously. There would be concerns with merely purchasing water from West Sacramento, even though other communities have been able to lock in 40-year agreements, with 40-year options and 20-year buy outs to ensure water for 100 years – which may be the lifespan of this project anyway.
The second issue is that West Sacramento water may be of lesser quality than the water that Davis would get through the JPA.
Meanwhile, however, as West Sacramento refuses to play ball unless they are seen as more than leverage for Woodland, Woodland is wary of Davis backing out of an agreement and leaving them in the lurch, and is playing hardball.
Last month, Bill Marble and Skip Davies threw down at least a proverbial gauntlet, as they published an op-ed in the Davis Enterprise that, despite reiterating their commitment to the JPA and working with Davis, indicated in no uncertain terms that their patience with Davis is wearing thin.
At that time, they seemed to suggest that they will consider cost-sharing only once Davis commits to the project.
“In good faith we entered into a partnership agreement with Davis almost three years ago. It was determined then that the partnership would result in significant cost savings. We continue to feel the partnership provides the best long term value for both communities. We have always been committed to fair and equitable sharing of the costs with our project partners,” they wrote.
They add: “Woodland has been and will continue to be consistent in its message to Davis. We will consider discussion of prior mutually agreed upon partnership terms, such as cost sharing, once Davis determines it will continue as a partner in the Woodland-Davis Clean Water Agency and concludes discussions and negotiations for an alternative project!”
Mayor Davies and Councilmember Marble commit to going it alone: “Should our partnership with Davis dissolve, Woodland can and will proceed independently. If we must go it alone, we will downsize to a solo project and will do so within the rate structure already approved by our ratepayers. With or without our partner, Woodland is prepared to move forward and will continue to explore and pursue every possibility for reducing costs and minimizing rate impacts to our residents.”
They conclude: “While we value and hope to preserve the historic partnership, our commitment and responsibility remains first and foremost to our residents and our community.”
While no public official has wanted to say it on the record, it is quite clear that Woodland has maintained this stance in public – steadfastly refusing to even discuss cost-sharing.
This puts the city of Davis into the awkward position of having to commit to a project and hope that it can negotiate terms – which seems antithetical to any realistic cooperative process.
In retrospect, this illustrates the problem with the WAC making such a complex compromise motion. They committed to Woodland without committing to Woodland. And they committed to negotiations without opening up the process enough to make our partners trust that we were negotiating in good faith.
While there are concerns about the West Sacramento project, there are concerns, as well, with the Joint Powers Agreement. Davis would be committing to the DBO, which many believe is the best arrangement. The problem with the DBO is that it will lock in private operations of the water project.
It is true that the JPA could probably work in some sort of escape clause, but that escape clause would require an affirmative action from the JPA which would mean it would require a majority vote – three votes to pass. If Woodland remains committed to the DBO process – as some have suggested that they are – Davis would not be able to have the votes to make the change.
A move to Woodland would lock the city into the JPA. Once the project starts, and the bonds are issued, there is no escape.
Moreover, as Ed Schroeder, the professor of civil and environmental engineering at UC Davis who has been acting an independent consultant, indicated, once the JPA signs the DBO contract, the JPA loses control of the process.
“You lose control of the process and you have less input into it as it goes along,” Professor Schroeder told the WAC in September. “You may have some surprises at what comes out of the other end in terms of the product. That’s something I think is of concern.”
In short, while many argue that going to the JPA means joint governance and more control, in many ways that is far from the case. Once decisions are made, the city will be locked into them. On the other hand, an agreement with West Sacramento might ironically mean more flexibility for the city in the long term.
But West Sacramento will not even be an option unless the city of Davis makes a clear indication that this is more than a move to leverage Woodland into a better deal. The WAC vote will make that more difficult, but now it is up to the council to show some leadership.
—David M. Greenwald reporting
[quote]They committed to Woodland without committing to Woodland. And they committed to negotiations without opening up the process enough to make our partners trust that we were negotiating in good faith.[/quote]
These words were written with regard to action by the WAC, and yet it would seem to me that this is how Davis has been handling the situation all along. From the Woodland point of view, Davis makes a commitment, and then three years later decides “oh, no, maybe not” and starts shopping around for a better deal because of our own shortsightedness. This is hardly a strong recommendation for the city of Davis as a strong partner in commitment. From my point of view, negotiations in good faith are made within the context of commitment.
That does not seem to have been true for the actions of the city of Davis in the past. Maybe, we can improve upon this going forward.
Or option three: Build *two* pipelines, contract for water deliveries from both Woodland and W. Sac for 6 million gpd, taxing the capacity of neither, and likely lowering overall costs for Davis.
Medwoman: I agree with your point. The problem we end up with is from the perspective of the Davis voter/ ratepayer, the previous city council committed the city to things without checking in with the voters first. So you have September 6, 2011’s vote but then a referendum. So what do you do?
I think you make this point as well “This is hardly a strong recommendation for the city of Davis as a strong partner in commitment. From my point of view, negotiations in good faith are made within the context of commitment. That does not seem to have been true for the actions of the city of Davis in the past.”
I think to be fair, there was a commitment by the past council, their error was not the sincerity but their read or failure to try to read the will of the public.
supervisor rexroad had an interesting response to this on his facebook page: “At this point I am not sure why we even need the structure of the Joint Powers Authority. I would be in favor of terminating it. If Davis wants to play at a later date we can negotiate that based on the circumstances at that time.”
so he’s willing to forgo about $30 million just to get on with it???
[quote]so he’s willing to forgo about $30 million just to get on with it???[/quote]
So I was sharing my sales tax dollars with our good friends in Woodland this last weekend. Had to go to the Depot because Davis Ace didn’t have the mortar I needed to finish a tiling project. Noticed that they’ve already started construction on the drinking water treatment plant site.
Our fair city, with its thumb up its you know what, is just playing with itself at this point.
So it doesn’t matter to you if we start looking like everytown usa because you have to get your mortar for your tiling project? and because we don’t have a depot – our thumb is up our rear and we’re playing with our selves? (btw, nice imagery).
“…The second issue is that West Sacramento water may be of lesser quality than the water that Davis would get through the JPA….”
Debatable since it is further away from the summer discharge of the Glenn-Colusa Irrigation District at Knights Landing.
Steve: I assumed David was referring to the chlorination vs ozonation issue.
has not the water quality issue come up with respect to ws versus woodland?
Hey, give me some credit for going to Ace first! I hate driving out of town to places elsewhere to get what I need.
The imagery was related to the water project. Its already under construction, and Davis is playing like it still has some influence over its neighbors.
[i]On the other hand, an agreement with West Sacramento might ironically mean more flexibility for the city in the long term.
[/i]
How so? We would have zero control over what West Sac does. We would be customers. We can buy their water, or not. That’s pretty much it. And if we decide we don’t like their terms, we won’t really have anywhere else to go at that point.
A JPA can be dissolved by a simple majority vote of either city council. Dixon just voted to dissolve their JPA with Solano Irrigation District by a 3-2 council vote. We have complete control over the Davis-Woodland relationship, and zero control over the Davis-West Sac relationship. In neither case would city employees be running the operation.
In my opinion the discussions with West Sac are a waste of time, and at this point may be harming our long term interests. It is clear what a majority of the WAC prefers, and probably what a majority of the council prefers. Neither city wants to deal with a partner that is acting as unreliable as Davis. We need to commit to a project. Any likelihood of getting better terms with either partner is eroding.
Steve
You need to mention that there is this huge fire hose adding flow (and dilution) to the Sacramento River between the proposed JPA intake and Knights Landing. The fire hose is called the Feather River (with the Yuba River as tributary). The distance between the JPA intake and West Sacramento is a couple of miles. There is no additional source of dilution between the JPA intake and West Sacramento worth concerning ourselves with. Whats the travel time between the JPA intake and West Sac? In the time scale of hours? Explain why the added distance makes any difference?
WATER QUALITY
This is from Alan Pryor a few weeks ago: “The other unmentioned MAJOR consideration is water quality. West Sac uses an older, less expensive option for organics removal and disinfection (chlorination) vs using ozonation with biologically activated carbon filtration at the Woodland project. The Woodland plant will thus remove far more organics and provide greater disinfection all the while producing far fewer chlorinated hydrocarbons (e.g. chloroform) many of which are carcinogenic and/or endocrine disruptors…and it will be healthier and taste better as a result I am sure Davis citizens will vote to pay a little more to get the higher quality water from the Woodland plant if they are given the option.”
Don:
Good questions.
“How so? We would have zero control over what West Sac does.”
And apparently we would have zero ability to change anything that the JPA does without Woodland’s cooperation.
“And if we decide we don’t like their terms, we won’t really have anywhere else to go at that point.”
We’ll have a contract, West Sac would not be able to change the terms of the contract once it is signed.
“A JPA can be dissolved by a simple majority vote of either city council.”
It’s not quite that simple. Steve Pinkerton said once we take out the bonds, we’re pretty much stuck in the JPA.
“We have complete control over the Davis-Woodland relationship, and zero control over the Davis-West Sac relationship.”
I disagree here. We have about the same amount of control of both – once the agreements are reached, we are stuck in both cases.
“In neither case would city employees be running the operation.”
That’s not really the issue.
Don:
I don’t believe the voters will approve a JPA with Woodland under present circumstances.
Under what circumstances do you believe the voters would approve a JPA with Woodland? Are we trying to come up with something that will placate the referendum committee? Nothing will if it involves Woodland.
Don you mentioned Dixon Just dissolved their JPA with Solano. Anyone give more info on this. Why? What will they do now, etc?
SODA: What will they do now? That’s a good question. I think it was done in an ill-advised manner. But Dixon politics never cease to amaze me. Here’s the Dixon Patch story: [url]http://dixon.patch.com/articles/dixon-city-council-votes-to-dismantle-relationship-with-solano-irrigation-district[/url]
“Under what circumstances do you believe the voters would approve a JPA with Woodland? Are we trying to come up with something that will placate the referendum committee? Nothing will if it involves Woodland.”
I don’t know the answer to your first question. Presently I believe the magnitude of the rate hikes and messiness of the JPA relationship will be fatal.
I don’t see the referendum committee as being the pivot point here. I think they stand on the fringe of this issue. But as it stands now, they have enough ammo to be effective.
I agree with your assessment that nothing will that involves Woodland. Personally while I am not there, I am not enthralled with working with Woodland here, I think in most ways our worldviews are too different – at least in terms of official Woodland.
I do take exception to your previous comment about the unreliability of Davis. The problem here is that Davis voters were misrepresented by the former council. They did things the wrong way and the result is that the voters had two choices: accept it or try to change it. They chose the latter. I don’t think that makes Davis unreliable, just poorly represented. Ironically I think you would agree with that assessment on perhaps all issues other than water.
David: “Presently I believe the magnitude of the rate hikes and messiness of the JPA relationship will be fatal.”
The magnitude of the rate hikes will be the same regardless of whether we choose Woodland, West Sac or do nothing. You need to stop propagating the myth that the rate hikes can be prevented.
Mark: the first part of your sentence indicates “The magnitude of the rate hikes will be the same regardless of whether we choose Woodland, West Sac or do nothing.” I disagree. The second part: “You need to stop propagating the myth that the rate hikes can be prevented.” I don’t believe I have.
The rate hikes cannot be prevented but the cost of the project and magnitude of those hikes can differ depending on the agreement.
No David. You are talking about a difference of pennies for the rate payers. The magnitude will be the same regardless because all will require huge rate increased over the artificially low rates that we have been paying for years. We need to take money out of the discussion because at the rate payer level, all three options are essentially the same.
Pennies that add up to $20 to $30 million.
David:[img]http://davismerchants.org/water/waterprojectcostschart.png[/img] [url]http://davismerchants.org/water/waterprojectcostschart.png[/url]
“Pennies that add up to $20 to $30 million.”
I think that any difference is in cost is doubtful at this point, but in any case the difference is only after 50 years and consequently is insignificant.
What is not insignificant is what we get at the end of 50 years. In the case of West Sac, all that we will own is a pipe running from West Sac to Davis and an opportunity to buy more water at whatever price they dictate since we won’t have any other option at that point.
In the event of Woodland, we will own the plant, the pipeline, and control over how the whole thing operates. Yes, we will have to cooperate with Woodland, but isn’t that something that grownups are supposed to know how to do?
Do nothing?…we will own nothing and only have an increasing amount of fines to pay.
All three options cost the same, but only one gives us ownership and control. There is no significant difference in cost and your trying to differentiate them by that component is nothing more than propagating a myth.
Mark:
I think 50 years is way too long a time horizon to evaluate this. We don’t even know that there will be water to be had in fifty years, I don’t know how long we can use this anyway, really to me the next 20 years are most critical because those are the rate hikes that are going to impact people’s pocketbooks.
Again:
1. The JPA is not needed, and a collosal waste of resources (it’s designed to be the retirement home of area utilitiy employees who retire early from city and county govt, take their fat packages and our tax dollars with them, and go to work for + $100,000 like Diemer and company are doing now, and charging the rate payers);
2. We dont need to own a plant; we just need to buy what we need, far in the future, when we need it (certainly less than 5 mgd);
3. We dont need to be involved in the politics with other Yolo County cities; who the heck came up with that crazy idea???
4. We dont want the cancer-causing water that is going to be produced by the Woodland plant from the ozone process; (Google it, and read the dozens of negative articles, studies, and links);
5. We want a formal process to come up with a bid for our water needs, and let other jurisdictions bid on supplying it;
6. We do not want a private company operating our water plant, and charging us higher rates in order to pay the rich cream off the top to corporate shareholders;
7. We want a formal process using disinterested consultants who have had nothing to do with the last ten years of JPA madness to evaluate our water system, what the water supply needs might be, and the size and specificications of the project or contract to meet those needs.
David
[quote]I think 50 years is way too long a time horizon to evaluate this. We don’t even know that there will be water to be had in fifty years, I don’t know how long we can use this anyway, really to me the next 20 years are most critical because those are the rate hikes that are going to impact people’s pocketbooks.[/quote]
I have to take exception with your timeline. I think it is exactly the same type of short term thinking that led to the loss of the possibility of water from Berryessa. I agree that the next 20 years are important. However, the issue of an adequate affordable water supply is not going to disappear 20 years from now unless we lock in a secure supply. Do we really want to put this payment off to the adults of 20 years from now ? I would vastly prefer to start paying now to secure an adequate water supply for the future rather than leaving it to your children.
David M. Greenwald
[i]”I agree with your assessment that nothing will that involves Woodland. Personally while I am not there, I am not enthralled with working with Woodland here, I think in most ways our worldviews are too different – at least in terms of official Woodland.”[/i]
David, this is an interesting statement that may well be true, but here is a question for you, “Which city has a closer worldview to Davis . . . Woodland or West Sac?
Mark West said . . .
[i]”The magnitude of the rate hikes will be the same regardless of whether we choose Woodland, West Sac or do nothing. You need to stop propagating the myth that the rate hikes can be prevented.”[/i]
David, what is your response to Mark’s assertion?
David M. Greenwald said . . .
“The rate hikes cannot be prevented but the cost of the project and magnitude of those hikes can differ depending on the agreement.
Pennies that add up to $20 to $30 million.”
David, you are shifting the argument, lets translate that $20-30 million savings you have argued for into rates. First the $20-30 million will be spread over a 20-30 year period, so that means the savings you believe West Sac might realize will be $1 million per year, which when spread over 16,400 accounts amounts to $61.00 per account per year, or $5 per month. On a per person basis that possible savings amounts to $15 per year or $1.25 per month.
Of course all those numbers are hypothetical until and unless West Sacramento decides that the economic deal that Davis is offering makes fiscal sense for West Sacramento. We haven’t as yet heard from them that it does.
Michael Harrington said . . .
[i]”3. We dont need to be involved in the politics with other Yolo County cities; who the heck came up with that crazy idea??? “[/i]
Michael, if we don’t get our 5 mgd of water from Woodland or West Sac because we don’t need to be involved in the politics of another Yolo County city, who do we get our 5 mgd of water from?
Further, how do you deal with the EC and Selenium and Boron issues that Davis currently experiences?
Mike Harrington said . . .
[i]”5. We want a formal process to come up with a bid for our water needs, and let other jurisdictions bid on supplying it; “[/i]
Michael, is there any “jurisdiction” out there that meets your criteria of “We dont need to be involved in the politics [of other jurisdictions]?” Yolo County and its cities don’t have a corner on the market of “politics.”
From [url]http://city-council.cityofdavis.org/on-going-committees/water-advisory-committee/agenda—october-11-2012[/url]
[quote][b]Staff Report
October 11, 2012 Water Advisory Committee
Herb Niederberger, GM – Utilities, Development & Operations Dianna Jensen, Principal Civil Engineer[/b]
Woodland/West Sacramento Water Supply Negotiations
Recommendations
Informational only – no action is required.
Discussion
On August 21, 2012, the Davis City Council passed the following motions:
[i]‘That the Davis City Council formally receives the recommendations of the Water Advisory Committee from its August 16 meeting. That over the next 60 days, the City Council negotiates with Woodland and West Sacramento to pursue the recommendations of the WAC. As soon as these negotiations are completed with either or both parties, or advanced as far as feasible, Council will share its progress with the WAC to seek the WAC’s acceptance or further direction. During this period, the WAC will continue to prepare recommendations to the City Council on the Woodland Davis Clean Water Agency’s proposed DBO bidding process, and on the appropriate rate structure for future city water supply pricing.” This motion passed unanimously.
“Authorize J. Krovoza and B. Lee to negotiate with West Sacramento, and R. Swanson and D. Wolk to negotiate with Woodland.” This motion passed unanimously.[/i]
Status of Negotiations with Woodland
On August 31, 2012, Davis Councilmembers Dan Wolk and Rochelle Swanson met with Woodland Councilmembers Bill Marble and Skip Davies to determine a basis for renegotiation of the allocations within the Woodland Davis Clean Water Agency Joint Powers Agreement (JPA). The discussions were as follows:
• There were many considerations that went into the allocation when the JPA agreement was negotiated. For instance, there is considerable benefit from the joint location of the intake with RD2035 such that Davis’ and Woodland’s share of the intake is only 2.5% each
• There are multiple avenues to formulate an equitable solution and ample room for consideration of altering that allocation. But Woodland will not discuss cost share of the treated water pipelines and will only entertain those negotiations within the confines of the JPA. Too much of a change in the allocation might also require a change in the voting
allocation or weighting.
• Pursuing the partnership is beneficial to both sides.
• Woodland wants to be viewed by Davis as a partner, not to be used as a bargaining chip in negotiations with the City of West Sacramento.
• Woodland need the source of surface water supply, regardless of what Davis decides, and intends to go forward with the intake and treatment plant project with or without Davis.
• When Davis decides what it wants, they need to approach Woodland as a member of the JPA.
Status of Negotiations with West Sacramento
In response to a request from the City of West Sacramento, Davis prepared a list of deal points for negotiations to secure delivery of water supply. This list was shared with the City of West Sacramento in a letter dated September 17, 2012 (copy attached). West Sacramento replied in a letter dated September 24, 2012 (also attached).
In summary, West Sacramento desires to preserve their assets without discounting their value and therefore did not agree to the two main deal points requested by the Davis WAC: 1) a reduced connection fee of $6 million; and 2) an initial 30-year contract term. One-on-one discussions between the two city’s mayors resulted in West Sacramento declining further discussions given the significant gap in each party’s proposed terms. These negotiations have been concluded due to lack of a viable compromise.
Conclusion
Davis and Woodland staff are working to arrange a second meeting of the city’s respective policymakers. We are confident that there is a willingness by both parties to come up with updated business terms suitable to meet the needs of each city.
Attachments[/quote]
[b][i]”One-on-one discussions between the two city’s mayors resulted in West Sacramento declining further discussions given the significant gap in each party’s proposed terms.”
[/i][/b]
End of story.
[quote]really to me the next 20 years are most critical because those are the rate hikes that are going to impact people’s pocketbooks.[/quote]
What a shortsighted viewpoint. This is the kind of thinking that led Davis to miss out on its natural water supply from Putah Creek, which now goes to Solano County because Davis didn’t want to pay part of the cost of the Berryessa dam.
Hindsight is always 20/20. The problem is that just because in hindsight it would have been a good move to get into water from Berryessa, does not mean that it’s necessarily the same good move to get into water from the Sacramento River. I fail to understand why crippling the finances of people for the next twenty years is justified because of what might happen 50 years from now. It may be that doing this hurts us now and doesn’t help us in the future.
I’m only presenting this because some of you take the Berryessa example to literally mean that it’s a mistake not to jump on this opportunity. It may be, but I still think we have to look out for current finances.
David M. Greenwald said . . .
“I fail to understand why [b]crippling the finances of people for the next twenty years[/b] is justified because of what might happen 50 years from now. I’m only presenting this because some of you take the Berryessa example to literally mean that it’s a mistake not to jump on this opportunity. It may be, but I still think we have to look out for current finances.”
David, the annual revenue generation by the current water rates is $10.3 million. With 16,400 total accounts, that means an average of $632.75 per account per year, or $52.73 per month. Is a $50 per month expenditure “crippling”?
905 of all the accounts are Single Family Residences (14,735 accounts). For them the average annual expenditure is $423.87, or $35.32 per month. Is a $35 per month expenditure “crippling”?
As a matter of fact, what exactly is “crippling”? Is $100 per month crippling? Is $150 per month crippling? Is $200 per month crippling? Is $250 per month crippling?
Said another way, is $1,000 per year crippling? is $1,500 per year crippling? Is $2,000 per year crippling? Is $2,500 per year crippling? What exactly is crippling?
The answer is different for different people.
David, that answer ducks the question. We have to make a community decision with respect to water, and your statement [b]crippling the finances of people for the next twenty years[/b] was a statement about the community as a whole, not about individual people. So my questions to you stand. Please answer them.
No my statement was about individual people, when you look at the rate hikes you are doubling or tripling people’s rates in a short period of time. So if we are talking about me, right now I can’t afford to absorb those kinds of rate hikes because I don’t have the margins to do so. So what does that mean? It means that I will probably have to cut back on a night or two of entertainment with my family. So that’s now two local restaurants that will not get my money because it is going to water. Now imagine the impact if every local business not only has to increase their water bills but loses out on customers who have to cut back? I’m struggling but better off than a lot, and they may actually have to move because they can no longer afford to pay their water bills and live in a city this expensive.
Given your answer David, the principle behind my question still applies because the impact you describe is the impact on average. Some accounts will see a lower than average impact, and other accounts will see a higher than average impact, but the community as a whole will see the average impact. So again, my questions to you are:
What exactly is “crippling”? Is $100 per month crippling? Is $150 per month crippling? Is $200 per month crippling? Is $250 per month crippling?
Said another way, is $1,000 per year crippling? is $1,500 per year crippling? Is $2,000 per year crippling? Is $2,500 per year crippling? What exactly is crippling?
David M. Greenwald said . . .
[i]”I agree with your assessment that nothing will that involves Woodland. Personally while I am not there, I am not enthralled with working with Woodland here, [b]I think in most ways our worldviews are too different – at least in terms of official Woodland.[/b]” [/i]
David, this is an interesting statement that may well be true, but here is a question for you, “Which city has a closer worldview to Davis . . . Woodland or West Sac?