Every time the issue of rate fairness is brought forward, the point is made that the rates are going to up regardless of the structure. That is absolutely correct. But it is not the point, either.
We are all going to die one day. Death is inevitable and unavoidable. That does not mean that most people are willing to step in front of a bus on their way to work. It also does not mean that a lot of people do not work hard to eat right and physically exercise in hopes of both prolonging their lives and improving their quality of life during their brief stints on this planet.
Inevitability should not serve as a cop-out, a justification, or a rationale for inaction and inequity.
The fundamental problem with these rates that would be imposed under Bartle Wells are that they are unfair – unfair to the low-end users, the people who use the least water and tax the system the least. They are heavily subsidizing the high-end users – those with large hopes, expansive irrigation systems and swimming pools.
If you want to understand the nature of the problem, look at the lowest-end users in 2018 under the Bartle Wells system. An individual who uses 5 ccf per month is likely a senior with limited vegetation requirements. They may well live on a fixed income.
Currently these individuals pay $19 per month. Under the Bartle Wells Inclining Block Rate system (which is the more fair of the two that the council has asked the WAC to consider) by 2018, their rates will be $60 – for almost no water use. At 8 ccf, the cost only increases another $8. In other words, for the first 5 ccf the cost is $60, but for the next 3 ccf, the additional cost is only $8.
These are people who are not only on the lowest end of use, but likely seniors and on fixed incomes. And for almost no usage of water they will be paying more than $60.
The best way to understand what is happening in this system is to look at what happens to the cost per ccf. In every system, those costs are going to go way up. It is inevitable. But that fact does not tell the full story.
What is happening here is that under the Bartle Wells system in 2018, the vast majority of the costs are not for water use, but rather are fixed costs. The result is that the low-end users are actually subsidizing the larger users.
Under the Consumption Based Fixed Rate (CBFR), at least some of those fixed costs are not based on meter size, but are based on actual use.
It is not, as you can see, that the system is completely fair under the CBFR. You still have the low-end users, because a portion of the cost is still based on meter size, paying a larger amount per ccf than the high-end users, but it is much more fair.
The reason is because CBFR bases half of the fixed rate on previous usage rather than strictly meter size.
Is there some inequity there? There is some. As Councilmember Brett Lee noted on Tuesday, “I am a little concerned that with the Consumption Based Fixed Rate, that we’re planning on setting the middle portion, that roughly 50% of the fixed costs, the CBFR portion, based upon a time that has gone by.”
But the typical user, in fact, three-quarters of the typical users, are actually advantaged by this system.
No system is 100% fair. And those who say rates are going up regardless of the system are correct. Nevertheless, how can any reasonable person justify the inequity of the Bartle Wells Fixed Rate models?
Under the more conservative Bartle Wells Fixed Rate model, the bottom 10% of users are paying 2.44 times more per ccf than the top 10 percent.
In the CBFR system, the inclining and uniform rates are fairly similar. In the inclining block rate system, those bottom 10% are only paying 1.39 times more per ccf than the top 10 percent.
It is not a perfectly fair system, but it is far more fair.
For those who argue that a gallon is a gallon, how do you justify this inequity?
We often see a tiered rate structure justified in terms of its encouragement of conservation. That is an important argument, but it is not the full story.
The other part of the story is that a tiered rate understands that the high-end users actually put a tougher strain on the system than the lower-end users.
Matt Williams described this well when he described the rationale for basing the CBFR on summer usage. The reason that you do that is you have to design the infrastructure of the system for peak demand – so that you have enough capacity and infrastructure during those summer months when the public is watering their vegetation.
What CBFR does well is using previous usage during this peak time to estimate the amount of strain that an individual household puts on the system. What BWFR does poorly is it assumes that strain is uniform, based on meter size.
The bottom line is that, while everyone’s rates are going up, that does not mean that some systems of rate increases do not attempt to better estimate the actually contribution each consumer makes to the fixed cost strain on the system.
CBFR would have shifted a lot of that burden – and rightly so if you look at the cost per ccf to the higher-end user – to make for a much more fair system.
Under the system that the council asked the WAC to impose on Tuesday night, using the words of Alan Pryor: “It is clear that the small volume water users are subsidizing extravagant use and waste by the largest residential water users in town.”
I see no way that we can justify this.
—David M. Greenwald reporting
The CC made the decision; move on. The WAC tonight is only there for political window dressing
Just read Dunning. His and the DV certainly have a different opinion of the rate structures
David, good article. Obviously the fixed rate part of the equation is way too high and unfair to the lower users. I’m sure there’s going to be a huge backlash from seniors and the one’s who conserve.
harrington: and which one uses actual figures? do you think the dv is wrong? the numbers here are damning? it seems to me that dunning only cares about his own numbers.
The rates are a mess, not on the ballot, and the project is being rushed because of an artificial political timeline caused by our CC
we understand the campaign rhetoric, now address the issue at hand.
so dunning simply asserts that we’re closer to a workable rate structure without analzying it while greenwald shows using actual figures how unfair the rate structure is.
GI: I think so
I’m beginning to think the public should vote on the project and the rates separately.
Don: the 2011 water rate referendum specifically said to the CC: repeal the rate increases, or put them on the next ballot.
The CC has already split the rates from the project ballot, so the CC is insulting those + 5000 signatories on that referendum, plus the 5500 protest ballot filers.
There is some overlap between the groups, but basically the CC is trying to win an election when the CC has already politically upset, if not spat upon, well over 7,500 voters.
I know Alf, his boss/political benefactor Lois Wolk, and the developers have been trying to get this project approved since the 1988 General Plan, but it’s amazing to me to see how Alf goes about trying to get the approval.
According to the Davis Enterprise press release, Alan Pryor just loaned the Yes On Measure I campaign $10,000, yet here he is testifying that the small and low users are getting screwed by the larger consumers? And he just spent $10,000 to try to make that happen? I used to listen to him on various local issues, but not anymore.
Don: I don’t see how you can do that. It clearly won’t pass separately.
“It is imperative that we secure a reliable water supply for our future, especially in the era of climate change. That is why I wholeheartedly support the Woodland-Davis Clean Water Project, and am devoting substantial time and resources to support the measure.” -Alan Pryor
Mr. Pryor’s desire, as he has communicated it to me and others, is to ensure our community responsibly plans for our water future, honors our environmental obligations, and invests in this critical piece of community infrastructure. The rates and rate structure are secondary to this central question of whether we build a sustainable water future, or continue to kick the can down the road.
The Chamber has sent out a statement in support of CBFR.
“The Davis Chamber of Commerce urges you to reiterate your support for the Consumption Based Fixed Rate (CBFR) to finance the proposed surface water project.”
“·CBFR is far superior to a rate based on the pipe size or meter capacity, which bears little relationship to actual consumption.”
“The Bill Comparisons (attached) recently completed by City Staff now prove that CBFR would offer a less dramatic increase for apartment dwellers, home owners and businesses than any of the other rate models. The numbers really do speak for themselves.”
Will: Thanks.
The BWA system is the usual standard and familiar to voters. BWA basically took the City’s existing system, adjusted the tiers, and raised the rates up. Tried and predictable. Like a pair of old shoes.
The CBFR is quite different, and has some potential challenges both substantively and procedurally under the present circumstances.
This is a tough call for the CC. They have little time to “sell” CBFR, even if it has a few advantages.