Council’s 120 Million Dollar Roll of the Dice

snake-eyesVanguard Analysis – When the Davis School Board has wanted to put parcel tax measures on the ballot, it has asked a political consultant, Jay Ziegler, to doing polling analysis and help them craft a parcel tax measure that would have a reasonable chance of being successful at the polls.

Not everyone agrees with that approach.  For instance, Trustee Tim Taylor often argued that the board should simply ask why the measure was needed.  Indeed, that was more the approach of Measure E, where there was no polling, and no consultant. However, this was the fifth such ballot measure since 2007 and Richard Harris, who ran the campaign, might as well be a political consultant.

While the school parcel taxes have been vital to school funding, they are essentially $3 or $4 million taxes.  What the city has put on the ballot is a $120 million project.

The Vanguard has learned that the city has not commissioned a single poll.  They have yet to consult with a political consultant.  City officials told the Vanguard that they were deferring to the council on the political aspect of the project and a member of the council was concerned that the public’s impression of the use of a political consultant would look like gaming the process.

The result is that the council is actually flying quite blind on this project.  They have no idea what their base level of support is.  They have no idea if they are spinning their wheels here.

Everyone that the Vanguard spoke to on Wednesday and Thursday agreed that this is a one-shot deal.  The council gets one shot to get this passed and if it does not pass in March, the city will have to go back to the drawing board.

In staff’s presentation on Tuesday night, Herb Niederberger, the city’s General Manager of Utilities, suggested there could be a $15 to $50 million cost to re-join the project – the assumption would be at least that, if not more, if the voters actually defeated the measure.

Given the stakes here, one would think that the council would leave nothing to risk, doubt or chance.  And yet, they have no idea if their proposal will be approved by the voters or go down to resounding defeat.

They spent quite a bit on legal advice on the ballot language, but nothing on political advice.

Complications

The Vanguard took this issue to a couple of political consultants, familiar with Davis, who spoke with the Vanguard on the condition of anonymity.  The consultants agreed that the water ballot initiative had to be binding – an advisory vote, they felt, would communicate uncertainty to the voters that their word would be followed.

The biggest problem that they cited, from a political standpoint, was that the timeline was largely being dictated by Woodland, and the consultants believed that a number of critical policies appear to have been rushed in order to meet Woodland’s timeline.

The project lacks fixed baseline features that the voters would be able to rely upon.  There are still questions about the rate structure – although that may become clearer after the WAC’s vote last night.  There are questions as to why the rates, the fiscal analysis, and the specifics of the design are not on the ballot.

The problem is that we do not know which of these potential problems could be exploited in a political campaign.  The backers want a debate on the merits of the project.  Opposition is going to focus on the process and, in particular, how the project was rushed in the last month to get language on the ballot.

At the council meeting on Tuesday, Brett Lee appeared to be the only member of council who foresaw some of these problems.

In his comments, he expressed discomfort in moving forward with ballot language, “We don’t have the rate information from the WAC.  The WAC is advisory so we could move ahead with ballot language and await what the WAC recommends on Thursday but I think the bigger issue is that we don’t have clarity on what the cost-sharing agreement is with our partner Woodland on this project.”

“Agreeing to put something on the ballot at this stage before we even know what the cost is, what the general outlines of the deal are, I think’s problematic,” he continued.  “I’m a supporter of having an additional supply of water, so it’s not that I’m opposed to it.  But I don’t know how we move forward today by putting something on the ballot when we don’t even know what the cost-sharing is.”

Brett Lee may have fixed some of the problems by streamlining the ballot language and allowing the council to revisit progress on the cost-sharing at their November 27 council meeting, one week before the Board of Supervisors would finalize the project.

Driving the urgency at Tuesday’s meeting was the fact that the council had to get ballot language to the county on Wednesday.

Timeline Analysis

At first, Brett Lee pushed for a delay, but he was opposed by both City Manager Steve Pinkerton and JPA General Manager Dennis Diemer.

Davis City Manager Steve Pinkerton suggested that even a two-month delay in the election would result in a year delay in the project.

Dennis Diemer laid out a timeline whereby an RFP would be issued in December, Woodland and Davis would have to authorize the commencement of design and construction by August, and award the contract by September.

The Vanguard pressed Dennis Diemer to explain why Davis could not move the vote from March to May.

Mr. Diemer responded, “If Davis were to change the vote from March to May there would be insufficient time for the DBO teams to prepare priced Proposals and award the DBO contract in September.”

“As I mentioned at the Council meeting on Tuesday night, the procurement schedule has  been compressed and adjusted two times to accommodate the time Davis needs for its decision making,” he continued.

His explanation is that when Davis moved its vote to March 2013 from November 2012, the Woodland-Davis Clean Water Agency was able to adjust its schedule by requiring the DBO teams to carry two alternatives – a 30 mgd joint project and an 18 mgd Woodland-only project.

This phase will be completed in mid-April.

“At that time the Agency will decide whether to proceed with the 30mgd project or the 18mgd project based on Davis’ decision,” he told the Vanguard.

From mid-April to August is when each of the DBO teams will prepare priced proposals and the agency will evaluate the proposals and select the preferred team.

“This priced proposal phase requires extensive effort and investment by the DBO teams,” he argued.  “The Agency’s Procurement Committee experts have determined that the schedule cannot be further compressed without compromising the quality, total cost, or completion date for the project.”

But that still seems to leave open two questions.  One is why the city could not run an all-mail ballot election in mid-April rather than only in March or May.  The other is why a two-week gap from mid-April to early May is really fatal.

In a follow up he added: “In mid-April an addendum to the RFP will be issued that selects either the 30mgd or the 18mgd project. The addendum will also inform the DBO teams of technologies included in the concept submittals that are not acceptable to the Agency. With this information, the DBO teams will know which of their proposed concepts are acceptable before spending significant time and effort on their priced proposal.”

But that still does not explain why an election in early May wouldn’t simply set back the project by two weeks and why the city might not be able to provide a way to carry forward.

One suggestion is that the team may be able to anticipate the direction of the Davis election considerably sooner than the election takes place.

In yet another follow up response, Mr. Diemer argued, “It is anticipated that a significant amount of the work in the initial phase will apply to either the 30mgd project or the 18mgd project.”

He further pointed out, “An important point is that the Agency is not paying the DBO teams for their proposal development.  Therefore, before the DBO teams are willing to enter into the priced proposal phase they want the certainty of knowing which project will be built.”

This certainty, of course, only comes once Davis’ decision has been made by the voters.

“In short, the DBO teams need to have the project selection and 218 processes completed before they are willing to proceed with and invest in the priced proposal phase of the project,” he argues.

Our experts that we consulted during this inquiry believe that Mr. Diemer is probably playing it safe and is thinking inside the box.  But all of them believe, from his answer, there has to be some leeway from a mid-April completion time to a May election, and that a delay would not cost the one year that is estimated by Mr. Pinkerton.

The public officials need to remember that this is a high stakes game for everyone.

The cost to Davis to rejoin the project is probably considerably higher than the $50 million figure cited on Tuesday.  But the cost of Woodland to do this project alone is probably $70 to $90 million.

All of this rides on the voters in March.  The problem that the voters face is that there are still unresolved questions about the project.  We may have figured out the rates at Thursday night’s meeting, but a lot of worked was crammed into a brief window.

The safer approach would be to delay the election by two months, make sure all of the concerns are dealt with in time to place the measure on the ballot and to adequately assess the city’s chance for success.

The city may be able to prevail on this vote.  We just do not know how the voters will respond to a highly complex situation where I think the easier arguments rest with the no side.

The question is, why is the city taking unnecessary risks and why are they leaving so much to chance?

—David M. Greenwald reporting

Author

  • David Greenwald

    Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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Budget/Fiscal

42 comments

  1. The referendum committee proposed a plan that would fix many of the process issues but the CC and staff refuse to discuss it.

    Basically, we see this project as being driven by Woodland CC members, and now Herb. None of them have a clue how Davis operates in the political realm, Herb was brought in to force this project upon the voters. Sort of like hiring a Sacramento developer to get Covell Village through the hoops. And Diemer is from a huge Bay Area muni district, which is worse.

    And what’s really so disappointing with this entire deal is the City does Not even need any river water for years and years, and not much at that.

  2. I haven’t been following this very closely, but is this a 50% plus 1 vote to pass? or 2/3?

    I think it was the 2/3 vote requirement of school parcel taxes that motivated the advanced polling by the school board, but I agree that with that level of assessment in play ($120 million over what length of time?) that some polling would be a good idea. It’s not just an issue of what would pass or what wouldn’t, but an assessment of how well understood the issue is among the residents, possibly what folks understand or don’t understand about the issue, and where to proceed on that basis.

  3. It’s a simple majority requirement, but I think your point is good – understanding the public is valuable especially when you have to pass something.

  4. I just see in my mind the barrel going over the Falls, somehow.

    It’s all completely crazy. We all know that the water project’s original justification was to change the composition of the intake water at the sewer plant, but that reason is now gone. Now they are back to “quality,” since they cannot talk about safety. The “quality” argument was first advanced the day after I was elected with Sue Greenwald in March 2000, and J passed, signaling that the border explosion was ending, and the “we need the project for population increases” would no longer pass the smell test. So now we are back, 12 years later, to “quality” is just about their only selling point.

    Saylor left the city budget in ruins, and Mayor Joe is stuck with dealing with what Saylor and Souza and others did to us.

    I view the water project the same: Saylor will be known years from now for wrecking the city budget by giving away the public fisc to his political supporters whom he needed for money and walkers for his career, and he will be known for this water project.

    I have no idea why our Mayor and the CC are risking everything trying to sell a project that is lackes any rationale other than “quality”, is too big, too expensive, and too soon after the worst economic disaster since when my mother was born.

    Why are they basically forcing down our throats a project whose real costs will exceed $250 million, and which will ruin the budgets of our poor, middle class, and seniors?

    All 5 CC members voted for that project. How sad is that?

    And now the WAC last night voted 7/2 for an entirely new rate system that the CC literally has to sort out and decide to support, or not, by next Tuesday night.

    All because Woodland is mucking around in our city’s political and planning process for their own gain? And they have successfully rolled all five Davis CC members? And Davis considers itself so smart and sophisticated? The cow town to the north rolled us?

    How sad. And disappointing.

  5. David: good point. The DJUSD had to jump a 2/3rds hurdle for only $3-4 million, and the Davis CC thought until recently it could dump what is effectively an increased tax on us with no voter participation, at a leval exceeding $250 million?

    Maybe the initiative should have a super majority requirement before the City gets our cash: 60% majority? I hadnt thought of that before.

    Now the City will put it on the ballot, but lacking baseline features, screwed up or unstated rates, and they think the voters are going to buy this? (I have some fabulous real estate to sell them haldway between the Golden Gate and the next set of islands on the way to Japan.)

    What a waste of time. This could have been done so smoothly and with full transparency if the CC had been willing to dump the faux emergency Saylor/Woodland timeline and take it slow and get it right, the Davis way.

  6. The only type of polling that I know of that would be relevant is that on November 17, 2011 school board meeting, DJUSD discussed polling results that contributed to the crafting of Measure C. They asked questions regarding level of support for taxes on various issues, including local schools and also water and utilities, on a scale of 1-7, 7 being the strongest support. Support for water and utilities came in at about 50%, considering that 5, 6, & 7 represent support at some level. About 20% answer with a priority of 4, which was interpreted as somewhat neutral, and about 30% answered a priority of 1, 2, or 3 on the issue. (See slide 15 on the polling results for that meeting, at http://davis.csbaagendaonline.net/cgi-bin/WebObjects/davis-eAgenda.woa/wa/displayCalendar

  7. Anybody ever really thought through this rate thing, on a JPA regional basis? If the CC adopts the Williams Logge model of rates based on consumption, then it makes the Woodland traditional tier system stick out in an odd way. In other words, adoption of the Williams Logge Consumption Based Rates Model may lead to a successful constitutional attack on the Woodland rate system.

    I dont have an opinion yet on the Bartle Wells three tier model, but it seems a bit more modern than Woodland’s system?

    Beats me, but maybe the BWA system is a more conservative, safer approach to take on Tuesday night by the CC?

  8. Are the cost numbers being offered including the projected interest that must be paid on the loan? If not, the actual amount that the Davis voters will have to pay is much higher than these numbers that are,in any case, speculation at this point.

  9. [i]”The council gets one shot to get this passed and if it does not pass in March, the city will have to go back to the drawing board.”[/i]

    We can expect a low turnout for a March special election if recent history serves as a guide. I predict that there will only be about 14,000 voters (25.4% of those eligible) who decide this question next March.

    My expectation is also that this ballot will draw a disproportionate share of anti voters, because there is a segment of town dead set against the water project, but not really one which is in love with the idea of much more expensive water.

    On November 6, 23,776 people living in Davis area precincts cast votes for the president. As of March 6, there were 38,415 registered voters in Davis out of an adult population of 55,189.

    If the total registered did not change too much in the interim, that means we had a 61.9% turnout of registered voters and a 43.1% turnout of eligible voters. Here is how many cast votes in our two most recent special elections (for the school district) and the percentages of those registered that vote total represents (assuming a denominator of 38,415):

    March 6, 2012 — 17,200 (44.8%)
    May 3, 2011 — 16,476 (42.9%)

    These are the percentages who voted among those 55,189 eligible:

    March 6, 2012 — 17,200 (31.2%)
    May 3, 2011 — 16,476 (29.9%)

    Although the amount of money at stake is much larger for a water vote and it is something which will affect every household in Davis (unlike a school parcel tax), my guess is that the turnout of eligible voters will be lower than it was in the last two special elections. My reason to think that is 1) that a number of potential voters will feel inadequate to cast a vote, Most don’t understand the details of the water project; and 2) whereas a school parcel tax has the PTA and others drumming up enthusiasm to push turnout, the water project lacks a natural proponent* group to play this role.

  10. —————
    *There are a couple of wild card special interests. One is the building trades unions, like IBEW and the plumbers & pipefitters and so on, who stand to make tens of millions of dollars on this public works project. Another is the corporation which stands to design-build-operate the new facility. The problem of the former is that they have a tarnished brand in Davis in the wake of their corrupt role in the last City Council race. And the DBO corporation is likely to remain outside the election because we don’t yet know for sure which company that will be. And it is possible that the participation of a company like Veolia will harm the pro water project side more that help it.

  11. That’s a good point Rich. Because the bidding is completed after the vote, Veolia and United Water (which was just acquitted on criminal charges) take on greater importance. With the conflict firing up in the middle east, it will be interesting to see how veolia plays in this election.

  12. “All 5 CC members voted for that project. How sad is that? “

    there you go again… did they vote for the project or to put it on the ballot and let the people decide?

  13. Growth Issue

    I hate to quibble, but I would posit that Michael Harrington has proposed his alternative over and over. He is against a surface water project. He has stated again and again that he does not believe it is needed. I would paraphrase this to mean that he does not find it desirable based on his desire for very, very little or no growth and his belief that restriction of water is one means to this end. Michael, please, if I am not representing your point of view accurately, please correct me.

    It is interesting to me that I am in accord with Michael’s views on Davis growth, but am not willing to use water, which I see as an increasingly precious commodity in the future, as a bargaining chip in obtaining my personal preference.

  14. medwoman – i’m glad you raised this point now i can explain. i have a lot of trepidation about the water plan as proposed, at the same time, i understand the discharge requirements, timing issues, and what not.

    mike has said that the project is too big – but 12 mgd is about what we use now, so i’d like him to explain why it’s too big.

    do we not need it now? if you look at when our discharge is out of compliance, i think you do need it now.

    if he has different explanations, i’d like him to explain, but so far i see nothing to change my mind.

  15. GI

    I agree with your most recent statements completely. Regardless of whether or not we need the water right his moment ( I agree with you we do, but reasonable people can disagree on the basis of their perception of “need”),
    there is still the point that eventually Davis residents of the future are going to need a surface water supply. These may be our children or grandchildren. I think it is hopelessly short sighted and callous of us to pretend that because surface water is not critical immediately, that we have no obligation whatsoever to provide for those who will follow us.

    Like you, I would like to hear Mr. Harrington’s specific comments in response.

  16. [i]”United Water (which was j[b]ust acquitted [/b]on criminal charges) take on greater importance…”
    [/i]
    If they were acquitted, then there isn’t an ethical issue against United Water. And the third firm, name of which I can’t recall, also had no ethical taint that I’m aware of

  17. they got acquitted of criminal violations which were probably a stretch given the burden needed to be established. their acquittal does not mean they would not be found responsible in a civil court, nor does it absolve them of ethics violations.

    you’re also missing a key point here don, the fact that bidding will not be awarded prior to the election negates your point because you can’t guarantee me that veolia, uw, or ch2m hill will the bid which means that all will be on the ballot.

  18. Veolia does have some taint. But it has nothing to do with its contract with a bus company in Israel or its contract to run Yolo Bus. There has never been a problem with those deals, save in the minds of raving lunatics.

    The big taint with Veolia as a water management company comes from the situation in Novato ([url]http://www.marinij.com/ci_15256517[/url]) and a few others in California. For example, they have had real problems in Richmond and in Burlingame. [quote]Veolia settled out of court when sued under the Clean Water Act for dumping more than 10 million gallons of wastewater and untreated sewage over a 5 year period into the San Francisco Bay after creating an inadequate improvement project.

    … Veolia and Richmond settled out of court when sued for dumping more than 17 million gallons of sewage into tributaries after initiating a capital improvement project. Voters approved a $20 million bond to pay for sewer repairs, which Richmond used to privatize its sewers over three years and then sign a 20-year, $70 million contract with Veolia. Taxpayers had to shell out $500,000 annually to compensate for related property damage. In 2008, the plant had 22 spills of more than 2 million gallons of sewage.[/quote] There are a handful of people in Davis who also seem to be very worried about having any for-profit company involved in running a utility. For them, thus, all these DBOs are tainted. But that is distinct from the real problems of Veolia in our region.

  19. It was a complete verdict for the defense on all counts, so what “ethics violations” do you think they might be found responsible for? That is just innuendo.
    [url]http://posttrib.suntimes.com/news/lake/16272852-418/united-water-acquitted-of-all-charges.html[/url]

    Why does it matter when the bidding is awarded?

  20. [i]”Why does it matter when the bidding is awarded?”[/i]

    It seems to me, Don, that the timing matters in this respect: Say United Water were to win the contract as the DBO 4 months before the vote. United Water would then have good reason to give money to a pro-project vote in Davis. United Water would have an incentive to organize the union groups which will fill the jobs on the project to work at getting out the pro-project vote. United Water would have a reason to play a part in publicizing the dangers and costs of a no vote. Et cetera.

    But since the contract will be awarded after the vote, I am doubtful that the pro-project side will be as well organized and as well funded.

    For comparison purposes, think of the Target vote in Davis 6 years ago. Almost all of the money and the organization behind getting that measure passed came from Target. Target had a strong incentive to work for its passage. But if, instead of the City Council putting a Target project up for a vote, it had put up a “big box” zoning change up for a vote, there would have been no organization or money on the pro-big box side. In my opinion, looking back on it, that sort of a vote would have been defeated. The pro-side needed a proponent who had a real incentive to fight for passage.

  21. Davisite2: the $116 million is false. It excludes the financing and a large sum of money to upgrade the existing Davis system. The true costs are well over a quarter billion, to the Davis ratepayer. There is little about this project that facially honest, sorry to say.

  22. Growth: as I said earlier, a CC member who votes to throw this Stink bomb onto the ballot is endorsing it. Brett Lee owns his vote for the project.

  23. Anyone who wants to call and discuss, 759-8440. I’m working tomorrow and next week.

    The CC has a dilemma next Tuesday on the rates. I’ve repeatedly tried to discuss my ideas for a better way to process a project and city leadership refuses to discuss. It should not be so difficult, except all five CC have let the Woodland CC roll them into thinking its an emergency, when it is not.

  24. MH

    I do not consider securing a sustainable source of surface water a “terrible deal for Davis”.

    But for the moment, let’s take you at your word that you are not using this as ” a bargaining chip “. You are willing to state your reasons for not wanting the project here on a public forum. I feel it would be much more believable if you were to state what you feel would be the best alternative and state your reasons. Otherwise, it is just you saying “no”, in which case I would stand by my assessment.

  25. I’m with Mike, the $116 million is false. I’m not real clear why we would add the “large sum or money to upgrade the existing Davis system”, since we obviously have to upgrade the existing system even if we didn’t move forward with the JPA project. The $116 million is false because we’re actually going to make a net $44 million project. The way we’re going to do that is by following the Greenwald plan, which Mike heartily endorsed last year. Sue said, and I’m with her 100%, for each year we delay the project we will save $16 million. If we delay the project 10 years, times $16 mil per year, we save $160 mil, less $116 mil, bingo, a sweet $44 million profit.

    God, I love math!

    PS: “facially honest”, Mike, what you talking about? By the way, last year your math had you screaming the project cost was more than half a billion. This year it’s only a quarter billion. I’m going to have to find a more strident demagogue to support if you keeping trending toward reasonable.

    -Michael Bisch

  26. DT: Half a billion for the two city deal. Davis will be about half of that, for everything including rugs and the spare tire.

    As a business person, it beats me why you support such a large suck from our wallets ?

  27. Medwoman: I’ve said what a reasonable alternative is, several times

    There is a process we want the city to follow but they won’t because they are using the timeline of Woodland, which is based on their own screw ups managing their well systems, thereby creating this faux emergency for Woodland.

    Saylor largely created this mess, and now he has skated after wrecking our city budget, grabbing the Mayors cap for a few meetings to add the title to his resume.

  28. MH

    I confess that I mar have missed it but I honestly do not believe that I have seen from you an alternative suggestion for a means of securing a sustainable surface water project for Davis. Could you please either re state or direct me to your posts with their supporting evidence including estimated time line, costs, logistical pros and cons ?

  29. Michael, I’m intrigued by your comment [i]”Davisite2: the $116 million is false. It excludes the financing [b]and a large sum of money to upgrade the existing Davis system.[/b][/i]

    Can you provide any details about why the City will need to spend a large sum of money to upgrade the existing Davis system?

  30. “As a business person, it beats me why you support such a large suck from our wallets?” -MH

    What?! There must be some miscommunication here. Mike, I have consistently supported you in your opposition to this water boondoggle. As a business person, I am focused like a laser on my bottomline to the exclusion of ALL ELSE, in particular reason. We will stand together, unified in our opposition, and take this project down. The fines that are scheduled to hit in 2016 are no matter. I am absolutely cofident that between now and then, you and I will find someone else to blame for the fines. Saylor would be a good candidate, perhaps the Woodland CC, there’s plenty of suckers we can pin the fines on.

    -DT Businessman

  31. medwoman: [i]I confess that I mar have missed it but I honestly do not believe that I have seen from you an alternative suggestion for a means of securing a sustainable surface water project for Davis. Could you please either re state or direct me to your posts with their supporting evidence including estimated time line, costs, logistical pros and cons ?[/i]

    I think I’m with medwoman on this. I really haven’t followed this line of discussion on the blog until more recently.

    We’ve relied on well water in Davis for as long as Davis has been around (140 years?). I don’t think well water is the future. All the water table does over time is drop and get more saline over time. At some point we have to bite the bullet and get an alternative water source. If not now, then sometime soon. The way I see it one could probably get ideal financing right now with current lower interest rates. And getting an alternative water source will only get more difficult and expensive in coming years. And going in with Woodland seems to be one way to keep costs lower. I’d like to think I’m in it for the long haul in Davis, with me and my family.

    I’m not advocating anything, here, just stating my current position. I’m open to being swayed, especially if there are clearly better alternatives that haven’t been considered appropriately.

  32. [quote]You’ll appreciate what you will see in the campaign. I’m not conducting a campaign on this Blog.[/quote]

    This is a very curious comment given the amount of criticism, name calling, disparaging comments, and misleading statements about officials and staff of both Davis and Woodland. It certainly has sounded like a campaign to me.

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