By Matt Williams
Part Two: Water Process Interest Groups – 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”).
Given the events of the past week both at City Council and at the WAC, it seems to once again be appropriate to take a moment of our time to look at the cumulative activities of the WAC with the following key question in mind, “Are You Being Served?”
The new rate structure the WAC approved uses the Consumption Based Fixed Revenue (CBFR) rate model, which is designed to provide fiscal stability for both customers and the water system by recovering 100% of the water system’s fixed costs in each year of the rate structure’s five year period. By recovering 100% of the system’s fixed costs, water consumers will see reliable, proportional, stable and sustainable rates for the whole five-year period.
To put this new rate structure into perspective, it is useful to look at Davis’ current rate structure, which is composed of two components:
1) Charges that cover the costs the City must pay that were incurred to build the existing groundwater sources (wells) and
the water distribution system (mains and pipes and meters and treatment and customer service)
2) Charges that cover the variable costs that the City incurs each day to run the water system and provide reliable water to
each and every consumer whenever they need that water
The new water rate structure is composed of three components that reflect the new Conjunctive Use water system approved by the WAC and the City Council.
Those components are
1) Charges that cover the costs the City must pay that were incurred to build the existing groundwater sources (wells) and the
water distribution system (mains and pipes and meters and treatment and customer service)
2) Charges that cover the fixed costs incurred to build the 12 million gallon per day (mgd) Surface Water Plant
3) Charges that cover the variable costs that the City incurs to run the water system each day and provide reliable water to
each and every consumer whenever they need that water
Why include the third category? Going to a more reliable Conjunctive Use water system means incurring a whole new category of fixed costs that are isolated and recovered in the middle component of the new rate structure.
Are You Being Served?
Lets look at that decision from the perspective of those citizens who one year ago:
A) Voiced their opposition to the JPA Surface Water plan,
B) Collected signatures for the Referendum,
C) Signed the Referendum, or
D) Seriously considered any of the above.
Those citizens fell two broad categories, with multiple groupings within each category. The groupings are not mutually exclusive. Many citizens clearly belonged to more than one grouping. The categories and groupings were:
Those who opposed the JPA Plan outright:
- Those who see any added water capacity as contributing to population increase in Davis, and that removing access to water makes it very difficult (impossible) for developers to get regulatory approval to build on their land around Davis.
- Those who have serious doubts about the objectivity/intentions/actions/competence of City of Davis Staff/Council . . . some would even include concerns about fraud.
- Those who as a matter of principle object to any increase on either rates or taxes.
- Those who believe this is really a Woodland problem, and that the JPA makes Davis a captive and minority partner subject to non-Davis whims/power plays.
- Those who have serious concerns about “privatization” of any water system.
- Those who have serious doubts about the objectivity (due to profit motive) of the private sector Design-Build-Operate (DBO) firms and/or the private sector consultants/experts.
Those who were concerned about one or more aspects of the JPA Plan, but as yet didn’t oppose it in its entirety:
- Those who feel the process leading to the approval of the plan is 1) proceeding too quickly, and/or 2) lacks sufficient transparency and citizen input. This group typically is not sure that the surface water project is the best alternative, and that perhaps other options are out there that have not been sufficiently explored by the JPA and/or City of Davis staff. Many in this group feel that “a vote of the citizens” is needed.
- Those who see the rate increase in dollars and cents terms, and simply can’t afford the increase in these hard economic times.
- Those who have a business in which water is a key component (Sudwerk, swimming clubs, etc.), and see the rate increase as a huge change to their cost of doing business and/or their ability to continue to stay in business.
- Those who see the rate structure approved in September as structurally “unfair” and don’t want to think about the JPA plan until the fairness issues in the rate structure are addressed.
- Those who have serious ethical concerns about the bidding DBO firms and/or the DBO model itself.
- Those who have serious competitiveness concerns about the DBO bidding process’ structural ability to result in truly competitive vendor bids for one or more of the Design, the Build, and/or the Operate portions of the DBO model.
So, how has the WAC engaged the key issues of these citizen groupings?
Thus far the WAC has:
1. Done a very thorough job of questioning the sizing of the proposed surface water plant. 12 mgd represents a one-third reduction in Davis’s share of plant capacity and a $30 million reduction in Davis’ share of the estimated costs. The WAC has done a lot and there is more that members of the Council are doing to reduce the cost further.
2. Placed a decision of “groundwater only” vs. “conjunctive use” at the very front of the process.
3. Rather than relying on Staff or JPA Consultants for expert scientific, risk and legal information about the Deep Aquifer, the WAC has had numerous thorough presentations from industry experts Graham Fogg, Hydrology professor at UCD, Jay Lund, Chair of the UCD Watershed Science Center, Rob Beggs from Brown and Caldwell, Ken Loy from West/Yost, and Kelly Salt and Rob Sawyer from Best, Best and Krieger.
4. Made a unanimous decision at the 5/10 WAC meeting that A) fully endorsed having a dual source system containing both surface water and groundwater, and B) completely removed from consideration sole reliance on groundwater as the long range water supply for the City.
5. Gave clear direction to Council to place a binding vote on the ballot for the approval or rejection of the Prop 218 water rates that will be published by the City no later than January (hopefully sooner).
For those who see any added water capacity as contributing to population increase in Davis,
Steps 1-3 above are direct engagement of the issues at the heart of “no population increase” interest group. The most committed of the no growthers will not like the result of step 4, but in the unanimous opinion of the members of the WAC, the risks associated with a groundwater only solution based on the City’s current mix of Intermediate and Deep Aquifer wells are simply too great.
For those who have serious doubts about the objectivity/intentions/actions/competence of City of Davis Staff/Council,
As noted in 3. above, rather than relying on Staff or JPA Consultants for expert scientific, risk and legal information about the Deep Aquifer, had numerous thorough presentations from a broad range of independent water experts.
For those who object as a matter of principle to any increase on either rates or taxes,
The most committed of the “read my lips” interest group will not like the result of step 4, because that alternative is the only one that could result in no water rate increase, but again the risks associated with a groundwater only solution based on the City’s current mix of Intermediate and Deep Aquifer wells are simply too great in the unanimous opinion of the members of the WAC.
With that said, steps 1-3 above are direct engagement of the issues at the heart of the desire of this interest group. In my opinion there is absolutely no question that the vast majority of the members of the WAC are totally committed to choosing the most fiscally responsible solution to Davis’ water challenges.
For those who believe this is really a Woodland problem, and that the JPA makes Davis a captive and minority partner,
The best way to address this concern has been to independently validate the issues and concerns that are central to Davis’ water conundrum. As noted in 3. above, the WAC has received considerable independent scientific, risk and legal information in numerous thorough presentations from industry experts. The transparency by which this independent information has been presented, viewed, recorded and archived for reviewing has been robust to say the least. Addressing this category of concern has been a delicate balancing act at times, and there are still issues that inflame passions in this area of the process, but no one can say that Woodland has run roughshod over Davis.
For those who have serious concerns about “privatization” of any water system,
The “heavy lifting” on the issues central to this interest group showed us all that this really is a “world view question.” Full agreement really wasn’t possible, but the WAC took very clear and deliberate steps to try and maximize the chances that public operation would get a fair chance to carry the day. Most notable of those steps were A) expanding the understanding of the “O” part of the Design-Build-Operate (“DBO”) option, and B) bringing another “public” option back into the mix in the form of a West Sacramento surface water option. Those steps did not in the end change the DBO trajectory of the projec, but they clearly addressed the “privatization” concerns.
For those who have serious doubts about the objectivity of the private sector firms/consultants/experts,
All of the steps detailed above have proactively addressed the concerns of this interest group. As we proceed to the ballot box, I believe the transparent process the WAC has charted will continue to provide the people in this interest group with the information they need to substantially mitigate (if not completely eliminate) their concerns about whether this is a private process or a public one.
For those who feel the process leading to the approval of the plan is 1) proceeding too quickly, and/or 2) lacks sufficient transparency and citizen input,
If there is any one group that has been best served by the WAC process, it is this one. I would go so far as to say that simply by being on the WAC, all of the 15 WAC members are ex-officio members of this interest group, and we will all get the right to tell Council how we feel in the ballot box in March.
For those who see the rate increase in dollars and cents terms, and simply can’t afford the increase in these hard economic times,
I believe the members of this interest group are being very well served by the WAC process to date. There is absolutely no question in my opinion that all the members of the WAC have been totally committed to choosing the most fiscally responsible solution to Davis’ water challenges. As a result, the new rates described above are as low and as affordable as possible given the current regulatory environment.
For those who have a business in which water is a key component,
If you are a member of this interest group I strongly urge you to go on the City website and watch the presentation by the Bartle Wells rate consultant on April 12th and the Proposition 218 presentation on March 8th by Kelly Salt, an acknowledged expert lawyer on water rates. You will come away from those two presentations knowing that water rates for all Davis water users must be (and have been) proportional and consistent with the costs of delivering water in Davis. Further, the CBFR rate structure invented by WAC members solves a whole category of non-proportionality that no city in California has ever been able to address. The result is that businesses who use a lot of water and derive a lot of value from that water are getting the fairest, most proportional rates in all of California.
For those who see the rate structure approved in September as structurally unfair,
We affectionately refer to this interest group as “the Bob Dunning interest group.” At the risk of throwing a little humor into an otherwise rather dry OpEd, if Bob isn’t complaining, you know that the WAC has done a good job of thus far engaging the concerns of this interest group. Stay tuned though, Bob is a very stern task master.
For those who have serious ethical concerns about the bidding DBO firms and/or the DBO model itself and/or the DBO bidding process,
The major engagement of the issues central to this interest group is yet to come, when the DBO bids are actually received next spring. With that said, the WAC’s thorough exploration of the City of West Sacramento alternative was a clear attempt to totally eliminate the concerns of this interest group because the plant would have been publically operated.
So that is a summary of how the WAC process to date has engaged the various interest groups that expressed concerns in 2011 about the proposed JPA project. I hope it has been useful to you.
In closing, I’d like to ask three questions that I encourage you to comment on . . . A) When you look at the interest groupings above, are there any citizens who are either missing or whose interest is inadequately described? B) Is this list a good guide for the citizens of Davis as they cast their ballot? C) Are there other voices that need to be heard during the pre-election process? C) When you look at the WAC’s activities to date . . . Are you being served?
Matt
First I want to congratulate you on a very well written coherent article. And to thank you for all the time and hard work that you have put in to the WAC.
Having said that, I feel that you have left out one major constituency. That is the group of us that favored the surface water project in the first place. Some might feel that this group is overly represented by the CC and staff already. I disagree. For many months, I have watched those of us who favor a conjunctive use project called greedy, dishonest, unfair, fraudulent, ill informed, incompetent or just plain dupes of those in the previous groups.
This has been true in opinion pages in the Enterprise, on this blog, and in multiple discussions I had with individuals at the time the referendum signature gathers ( both volunteer, usually quite knowledgeable, and
paid, seemingly completely clueless beyond exaggerated talking points) were out and about. It seems that for those who oppose the project, it is easier to name call and to make assumptions about what those of us who favor the project are thinking. I have only had four people during all of this time ask me anything about the substance of my reasons for supporting a surface water project. One was you, one was David, one was a CC member, and the fourth was a young, impressionable, paid signature gatherer who was truly amazed that there was more than one side to this story having been sold on the nefarious intent of the CC without having any grasp whatsoever of the issues involved.
So, why do I bring this up ? Because I feel that supporters of the surface water project probably also fall into a number of groups with varying priorities. However, we are widely portrayed as above by the Harrington camp. Before we head into any election on this project, I would like to put forward the proposition, especially to those who are skeptical, that you might want to actually ask some of us on the “pro” side for our take on the issue rather than just accepting Mr. Harrington’s ( or anyone else’s ) view of why we favor the project.
medwoman, that is a fair point. I suspect the supporter constituency is a lot like those opposed and those concerned, with respect to multiple groupings. Do you have any thoughts about what some of those groupings might be?
Matt
I do have a few preliminary thoughts about what groups may exist acknowledging that there is likely to be overlap:
1) Those citizens who believe the City has the obligation to meet the Clean Water Act requirements thus avoiding
large fines.
2) Those citizens who believe that given the likely increasing scarcity of water supply, it is prudent to establish a
conjunctive use system now.
3) Citizens who believe that the surface water project is financially beneficial either to themselves directly ( land
owners, developers, members of businesses and/or trades who might have a financial stake) or to the City of
Davis in the long term ( affectionately known as the pro peripheral growthers).
4) Those who simply are not paying attention to the issue but who believe that the City Council was elected to make
these decisions and are likely to do the right thing.
just imagine if we had properly polled the city – we wouldn’t have to guess.
for me, i was dead against the project at first – i became convinced on the necessity of a water program and remain undecided on this one.
GI, what questions still trouble you, and what can the WAC do to help you become more comfortable with those questions?
When the final project and rates are designed and deal done, Matt, I would appreciate you and Mark Siegler totalling up the reduced cost, including all the financing, and comparing to what we would have spent if the 4 CC members had prevailed on those Sept 6, 2011 rates.
My guess is it will l be over $100 million