Opposition Claims City Pays 30% More Per Gallon Under This Agreement – Right before Thanksgiving, Mayor Pro Tem Dan Wolk and Councilmember Rochelle Swanson made their big announcement that Davis had reached consensus with Woodland on a cost-sharing agreement, under which the cities would equally share all non-consumption-based costs and all consumption-based costs would be shared with Woodland taking up 60% of the costs.
In addition, Woodland agreed to pay for a portion of the pipeline – picking up another $3 million, meaning they paid for half of the pipeline that was within Woodland’s urban limit line.
“This resolution represents an estimated savings of $10 million to Davis ratepayers above the current cost allocation,” Dan Wolk and Rochelle Swanson said at the time.
They added, “We feel that this is a good and amicable resolution, and we appreciate Woodland’s willingness to re-examine the cost allocation. As we have said before, this project is critical to the future of our community – of both our communities. This agreement represents a significant step in achieving that goal.”
However, in the ballot arguments submitted against Measure I, the water initiative, Sue Greenwald, Mark Siegler, Michael Bartolic, Michael Harrington and Pamela Nieberg call this arrangement “unfair.”
They argue, “Davis will pay 30 percent more per gallon of water than Woodland pays.” And they add, “The Davis Water Advisory Committee did not endorse the project with this inequitable cost-sharing agreement.”
The opposition told the Vanguard, “As reported by the Enterprise, and confirmed via e-mail with Herb Niederberger, the total project costs are estimated to be $113.77 million for Davis and $131.27 million for Woodland.”
Davis is getting 12 mgd and Woodland 18 mgd.
They calculate the following: “The cost per million gallons for Davis is: $113.77/12 = $9.480833 The cost per million gallons for Woodland is: $131.27/18 = $7.292778.”
They add, “You could divide each of these by one million to get the cost per gallon, but the ratio wouldn’t change. $9.480833/$7.292778 = 1.3003, so Davis will be paying 30 percent more per gallon of water than Woodland will.”
There is little doubt that Davis is paying, under this agreement, more for their water in this project per gallon than Woodland is.
The second part of the argument is that the WAC did not endorse the project with this inequitable cost-sharing agreement. This is a bit more tricky. A more accurate statement would have simply been that the WAC endorsed a different cost-sharing arrangement from the one that emerged in the Wolk-Swanson agreement.
As the Vanguard reported in October, the WAC agreed that both cities will 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.
Furthermore, the WAC recommended that the council use arbitration or mediation to resolve the equity issues if the councils of the two cities and the JPA could not do so. The numbers show that Wolk-Swanson fell short of the parameters that the WAC felt was an equitable share, but never utilized the mediation process to reach an equitable scenario.
The cost-sharing agreement approved by the WAC would have seen a 60-40 split on all costs except a 50-50 sharing of the pipeline. The resultant cost to the city of Davis would have be $106.72 million.
That would have resulted in an overall 56.4-43.6 split in the costs between the city. Most importantly, the $138.29 million cost to Woodland would have still allowed them to finance the project without running a new Prop 218 vote – a critical consideration for them.
Had Wolk-Swanson stuck with that arrangement, they would have produced a $17 million savings over the original deal – an additional $7 million in savings over what they eventually agreed to.
“This is the deal that WAC members Frank Loge and Matt Williams described as ‘fair and equitable’ because deal creation costs are split 50/50 and all other costs are split on the same 60/40 proportion as the 18 mgd/12 mgd.”
WAC Members Mark Siegler and Bill Kopper argued for a 60-40 cost-share across the board. Under their proposal they would have taken the city’s costs down an additional $6 million over the Loge-Williams proposal and $13 million over the current agreement.
Under these terms the city would have paid $100.25 million or 40.9% of the total costs. The drawback to this proposal is that it would have required Woodland to take out another Prop 218 vote.
The Vanguard asked Dan Wolk and Rochelle Swanson to comment on these numbers and the claims made by the opposition.
After delaying this article by a day to allow the city to gather the numbers together, the city ultimately failed to provide the Vanguard with a statement.
Late last night, Mayor Pro Tem Wolk told the Vanguard they would have a response by this morning, however, that it would be too late for inclusion in this article.
While there is no question that, based on a more 50-50 split of fixed costs, the city of Davis pays more per gallon than Woodland, there is room for debate as to what is an equitable split on these costs.
For instance, as one defender noted, “There are some costs for a water system that have nothing to do with consumption. For example, it costs exactly the same amount to print a bill for an account that consumes 1 ccf per month as it does for an account that consumes 1,000 ccf per month.”
They added, “The same is true for the costs of collecting the bill, keeping the accounting for the district, etc. There are other costs that are independent of consumption level. Microbiological testing, meter repair, Proposition 218 documentation and filing, legal compliance, SWRCB filings, etc all have to be done at the same level of effort and cost regardless of consumption.”
City Manager Steve Pinkerton, in effect, argued that the agreement was fair by reconstructing the question – by assuming a 12 mgd-12 mgd project with an additional 6 mgd going to Woodland. Under that arrangement, he contends, you end up with about the same $113 million figure for Davis once the cost-sharing of the pipeline is factored in.
However, the project opponents have a different view. They believe that Davis retained considerably more bargaining power because Woodland needed this project far more and far sooner than Davis did.
In fact, they noted that Davis could effectively walk away, since there is in their minds a cheaper alternative that exists in West Sacramento.
The city recently estimated that it would cost Woodland tens of millions of additional dollars in order for Woodland to build their 18 mgd plant by themselves.
Under those conditions, the belief is that the city’s negotiators could have done better and certainly should have taken Davis at least to the Loge-Williams numbers, that still would have allowed Woodland to finance the project without an additional Prop 218.
—David M. Greenwald reporting
If the 30% more per gallon is true it’s going to be very hard to sell that to Davis water customers.
we’re not talking about a huge amount of money difference here. it’s not going to make much difference in terms of people’s rates. but there principle involved here is troublesome. why would the council not get the full agreement when woodland is getting more money and not having to take out an addition 218?
They saved $10 million but didn’t save $17 million. I would say the glass is half full and you would say half empty. I guess no good deed should go unpunished by the Davis Vanguard.
“I guess no good deed should go unpunished by the Davis Vanguard. “
I question whether you read this article, the Vanguard only evaluated the claim by the opposition on the 30% and laid out both sides of the issue. I think your comment is thus unwarranted.
Mr Toad: I think this article is one of the most factual, fair and balanced I have read on this Blog that so often posts in support of the “new CC,” “the agents of change” that do nothing, the “tough budget adjustments” that go nowhere, the JPArs, etc. It’s refreshing, and indicates David is mellowing as he approaches the holiday season. (Oh ya, and his 29th B/D.)
Mike… you neglected to comment on the 4th FF on a truck… you seem to be slipping…
darned. Must have water on this rapidly aging brain.
Ya, about those 4 member crews racing past in two trucks, going to non-injury accidents: saw a couple this week. When are things going to improve?
The Davis Vanguard may be fair and balanced as you claim but it seems that no matter how hard Swanson and Wolk work to get costs down there is never a word of praise for their efforts.
Toad: I’m still waiting for some nice wine from the city to serve the water committee this holiday season for their efforts in saving the City over $60 million since the Sept 6th rate structure was pulled. A city leader offered us a bottle, but it’s not here yet.
I don’t know what the DV view is of Wolk and Swanson, but I will say there is not nearly enough critical analysis by the DV of their CC votes, unfortunately.
Hey Mike, give David a break, at least he didn’t continue his Bob Dunning crusade today. That’s probably coming tomorrow as perhaps Dunning’s article came out too late today to parse.
Toad, imo they should’ve saved the $17 million, so yes, the glass if half empty. Then again, you Davis Obama lovers might like subsudizing Woodland water users, kind of like paying your “fair share” to help the less fortunate to the north.
Please pay attention to why our costs per gallon are higher, it’s because our water has to travel farther. Woodland is not paying for any of the pipeline that extends beyond where they need it, they are not helping build the extra distance to Davis. If some of you think that is unfair then so be it, but please do recognize exactly what you are complaining about. Perhaps some think Woodland should pay for more of the extra pipeline that we need because they need the project sooner, anything is negotiable and different people have different views of what’s fair.
But should it be Donna? Why is the water traveling further and should woodland not compensate for that?
1. Because that’s where the intake is. Can you find a better location for an intake?
2. Why [i]should[/i] Woodland compensate Davis for that?
I suppose one could argue that Woodland does not deserve any credit for happening to be closer to the intake and therefore should pay for half the pipeline since it is a joint project. I am just tossing around possible ways of thinking of it. Initially I saw it as fair for us to pay the extra distance since it is for our water.
Do you have the figures to support that the extra distance of the pipeline to Davis justifies a 30% more per gallon increase?
Yes, above where he has the numbers I believe the difference is splitting the entire pipeline 50/50 vs. splitting only the part that ends at the Woodland border and Davis paying for the rest.
dlemongello: the 30% is solid, and we stand behind it.
“30% more per gallon” does make a great sound bite. Woodland is paying 15% more for the project overall, after Davis originally agreed to a 50-50 split. Many, if not most, of the costs are fixed and not proportional to the amount of water delivered. Some are site-specific, and of those the costs for Davis are higher.
“Do you have the figures to support that the extra distance of the pipeline to Davis justifies a 30% more per gallon increase?”
You can see the figures above and the cost estimates for the pipelines.
Mike, yes, it’s a true statement meant to jar the recipient rather than make them think or ask questions as to it being fair or justified, pure politics. I hate that kind of misleading approach even if it’s truth.
“Woodland is paying 15% more for the project overall, after Davis originally agreed to a 50-50 split.”
Woodland is paying $30 million less than they were in the 40 mgd model, so I think your argument is misplaced here.
“Why should Woodland compensate Davis for that? “
Why should Woodland be advantaged by it?
Donna: That point aside. The WAC came up with a 60-40 share except for the pipelines. The figures were workable under Woodland’s Prop 218. What is the justification for going short of those figures?
[i]Woodland is paying $30 million less than they were in the 40 mgd model, so I think your argument is misplaced here.[/i]
Everyone is paying less because the project is smaller. Woodland is paying than Davis more because they’re using a higher percentage. Some, probably most, of the costs are not proportional. So I would not expect the final cost to be exactly proportional to the amount/percentage of water used.
“30% more per gallon” is just a sound bite. It’s tactics, not substance (nothing new there). How much would it cost Davis to build a 12 mgd water project alone?
Moving in the right direction. So the next question is why you believe the Wolk-Swanson share (54-46) is more fair than the Loge-Williams share (57-43). Or why you don’t think all costs except the pipeline should be proportional?
Finally, you are failing to consider that this is a political issue and that it is fairly simple for the opposition to exploit the 30% higher cost per gallon.
It isn’t a cost “per gallon.” I don’t believe water is going to be metered between the cities. It is a cost for a particular capacity.
I have no idea if it is more or less “fair” though I fully expect Mike Harrington to exploit that word endlessly. He’ll probably seek, each and every time, to link it to growth policies of the two cities, as if somehow we’re subsidizing Woodland’s growth. Imagine if he tried to make that claim. Wouldn’t that be preposterous?
I haven’t dug down into the numbers the way others have, and I expect Dan Wolk or Matt Williams will be able to give a longer, much more detailed answer to that question. Long, detailed answers don’t lend themselves to sound bites. So let’s not perpetuate Mike Harrington’s sound bites as if they are accurate.
We’re paying for capacity, not gallons.
100% of the water coming through the extra pipeline distance is coming to Davis. How do you think that fits into the scheme of things? I think reasonable people will think it reasonable for Davis to pay for the part of the pipeline it exclusively uses.
Mike flatly stated the 30% more per gallon will be a big (political) point. My concern is more that we will not have the rate structure as part of the vote.
Don: “It isn’t a cost “per gallon.””
But that’s how it is paid.
“I haven’t dug down into the numbers the way others have, and I expect Dan Wolk or Matt Williams will be able to give a longer, much more detailed answer to that question.”
I had an extensive conversation with Matt Williams prior to writing this article, naturally he would have preferred the 60-40 with 50-50 pipeline costs.
” I think reasonable people will think it reasonable for Davis to pay for the part of the pipeline it exclusively uses. “
Completely agree. My purpose here was really to lay out the issue.
Also, the consistency of cost per gallon stops at the property line, the less I use the more I will pay per gallon as I am a BIG conserver. But I guess that’s life.
“[i]The WAC came up with a 60-40 share except for the pipelines. The figures were workable under Woodland’s Prop 218. What is the justification for going short of those figures?[/i]”
Perhaps it is in part a natural consequence of our partners being belittled on this blog and elsewhere for the past year.
dlemongello: the fact is, Woodland CC rolled ours with the cost sharing. And Woodland, not Davis, is the one who needs this project in the near to middle long term range. I dont understand how Woodland has managed to make our CC look desperate for a project we barely need, if at all, and certainly not for some years. It makes me think that the CC and staff have more of an agenda than we know, besides someday needing to make our water taste better?
Bill Marbles in partnership with Paul Navazio rolled our team. Congratulations, Paul. It makes it worth whatever Woodland is paying you.
“100% of the water coming through the extra pipeline distance is coming to Davis. How do you think that fits into the scheme of things? I think reasonable people will think it reasonable for Davis to pay for the part of the pipeline it exclusively uses.”
Using this argument one could just as easily say that 60% of the water going through the plant is headed to Woodland. I think reasonable people would say that it is reasonable for Woodland to pay for 60% of the water plant.
Rusty49, I believe that they are doing that under this agreement. They are paying 60% of everything but the pipeline. It is the extra distance of pipe that brings our price up to 46.4% instead of a flat 40% for the whole project.
[i]”a project we barely need, if at all, and certainly not for some years.”
[/i]Not true.
[i] It makes me think that the CC and staff have more of an agenda than we know,[/i]
If you have some substance to this accusation, please provide it. Otherwise, it’s just your usual MO of maligning anyone you disagree with.
[i]besides someday needing to make our water taste better? [/i]
That, of course, is not the primary or even secondary purpose of the water project. As you know.
Donna:
It appears to me that the critical difference between what we have and the Loge-William cost-share proposal is on the treated Water Pipeline.
Under the agreement Davis is paying 22 to 9 for Woodland of the treated pipeline including 87% of the Davis Treated Water Pipeline. Loge-Williams called for a 15-15 split on the costs. That accounts for the $7 million cost difference.
Don, I am clearly missing something. What are the purposes of the water project, unless you mean to stop overdrafting our aquifer, but even that is to replace the water for wastewater quality and for drinking quality for those who will drink it. As for drinking water, I have no intention of drinking “purified” Sac River water.
Stop overdrafting the aquifer and meet state discharge requirements. Pollution of the Delta is the driving factor behind the state water requirements. Selenium and salinity are the first constituents of concern.
That’s almost funny, somehow I missed that Mike had not mentioned wastewater, just drinking water, no wonder you responded as you did. Thanks.
I am assuming this statement from the ballot argument was written by Mike Harrington, since he has made comments similar to these are various times. My reply has to do with the bolded parts (my emphasis added):
[i]No water supply or regulatory emergency exists. [b]Surface water is not necessary to meet discharge requirements,[/b] it will not lower costs of wastewater treatment, and we will not lose our water rights.[b] Modest improvements in groundwater management should keep Davis compliant for years to come[/b] with safe, clean, affordable water.[/i]
The bolded assertions are false.
Using only our groundwater to meet discharge requirements would require that we draw heavily from the deep aquifers (as we are now doing), and that we run our new deep wells more-or-less continuously. Both actions would be irresponsible, and in the case of the heavy use of the deep wells could lead to irreversible harm to the deep aquifers. [u]The experts who testified before the WAC did not consider the deep wells to be a sustainable long-term source of water for Davis.[/u]
That is why the WAC voted for conjunctive use.
What’s frustrating is that Mike Harrington and Sue Greenwald know all this, yet they persist in stating the false assertion that we can use the groundwater to meet discharge requirements.
Don: they are not false, with all due respect.
Mike, the statements are false. [i]Prove [/i]me otherwise, instead of just [i]saying[/i] otherwise. When you just repeat something instead of providing evidence, you’re just repeating false assertions again. I’m sure that if you are correct, then you or one of your co-authors can provide evidence. Otherwise, you’re just blowing smoke again.
I also ask that you either provide evidence for your prior accusation against “CC and staff” or stop maligning people without substance to your comments.
I would possibly interpret it differently. Perhaps they know this but consider it OK to continue to abuse the aquifer because it’s cheaper. ” We can use the [deep] groundwater to meet discharge requirements”, but we shouldn’t IMO.
That would be a stretch of the word “improvements,” even when qualified with “modest.”
Don, why don’t you call or stop by sometime? I thought we were past these kind of comments
Don: the $116 million cost is flat false. You might know its about 2.5 x higher, with debt service, right ?
Want to start with something factual ?
Let’s just save it for the voters, ok?
… and now you’ve changed the subject.
So you haven’t addressed the false assertion I described. You won’t provide evidence for contradicting me. You just keep saying things.
Why would I “call or stop by”? Make your case in public, Mike. Your ballot argument contains statements that I have demonstrated are false. [b]We cannot meet state discharge standards with the ground water in a responsible manner[/b]. I’ve said that. The experts testifying before the WAC support my position.
[b]You say it isn’t true? Then prove it[/b]. Don’t just keep repeating falsehoods, attacking people, and then changing the subject.
Mike, I asked you in another post what you thought about the use of the aquifer, if you answered, I did not ever see it. These are the kinds of substantive issues that if there is an explanation would bring support for your “side” and if there are not and we are devolving to sound bites, then your stance rings hollow. Of course if someone else would like to answer, that’s fine too. Sue, Pam, you are not known for being abusers of the environment, what gives?
Donna: sorry, but I simply cannot blog all the time or dig tons of detailed info out for post after post . Wish I could I know the general info and put that out there
I don’t mean any disrespect by not answering questions sooner
I always appreciated your communications to the CC when I was there.
You are always welcome to call or come by
Don, same goes for you.
The aquifer is an interesting subject, but I just don’t have all the data out tonight.
I do prefer to use our available ground water before taking river water that is needed for downstream aquatic life. It’s a side of this debate that has gotten lost in the fiscal debate, but important to me.
I told this to Alf ten years ago
Downstream? You mean like L.A.? They will buy all they can get at these prices. What do they know that we don’t?
Mike:[i] I do prefer to use our available ground water before taking river water that is needed for downstream aquatic life.[/i]
This statement is exactly the opposite of what we should be doing.
The groundwater that comes out of our tap is polluting the delta when it goes into our storm drain system and our sewer system. It has too much selenium, salinity and boron. So the whole purpose of bringing surface water into Davis and Woodland is to stop us from pumping our salty, selenium-laden water out of the ground and allowing it to flow into the Delta. We need to stop pumping our water and using it and allowing it to flow to the Delta. The way to stop doing that is to replace some, much, most, or all of it with surface water, because that surface water is not salty or laden with selenium and boron.
I think you know all this.
Don, I just respectfully disagree for now
Again, that is not an answer. Your assertion is false. It’s up to you to contradict what I said, or my statement stands: your ballot argument contains false and misleading statements. The public needs to know that. You can disprove me, or get someone else to do it, and we can have a discussion. Until you do that, your repeated assertion of false and misleading statements, and your repetition of distortions, is simply political tactics. This town deserves better than that.