As Jerry Hallee, President of the Rancho Yolo Community Association, explains it, two weeks ago when they got the city’s Prop 218 notification they realized that the Rancho Yolo senior community is being assessed at the multi-family residence rate.
Mr. Hallee writes, “We were shocked, then angry, because the consequence of applying the MFR to Rancho Yolo makes the average Rancho Yolo household – senior, fixed-income, single-resident home – pay hugely more than the SFR household.”
Bob Dunning on Thursday picks up the story, writing, “Rancho Yolo households will see their rates jump from $1.42 per ccf to $1.81 per ccf and a year later to a whopping $2.24 per ccf … the rest of Davis’ homeowners will see their ccf rate actually drop from $1.50 to $1.23 come May 1, then rise to $1.53 the next year.”
The problem is that, in most ways, not only does Rancho Yolo have to be treated as a multi-family residence because they are master metered the same way that Multi-Family Residences are metered, but the Vanguard confirmed they are essentially on a single grid.
The system is plumbed privately, with connections to city water on East Eighth Street and Pole Line Road. It is plumbed the same way as an apartment complex.
In addition to the fact that it would be logistically difficult to meter them at a single family residential rate [SFR], it is to their advantage financially to remain at the MFR.
In order to qualify for SFR, Rancho Yolo would need to meter each one of their 262 manufactured homes, and the monthly fixed fee for 262 SFRs would then be $4,540.46.
Right now, Rancho Yolo pays $236.26 per month for its master meter that serves all 262 homes.
In short, changing to SFR pricing, far from saving Rancho Yolo residents, would actually cost them about $50,000 more per year in fixed fees.
That is because of the fixed costs to the system and the costs of the individual meters.
Now they would get a reduced rate going to SFR, but that savings would max out at less than $15,000 per year.
In other words, yes, they could have the reduced SFR rate, if they could put 262 meters into the already manufactured homes, but the tradeoff with the fixed rates is that the net overall cost would be about $35,000 higher per year.
The Vanguard was able to confirm that Mr. Hallee, in fact, met with the city prior to sending his letter to the Enterprise and the Vanguard, and that the fiscal tradeoffs were all explained to him. He then apparently forwarded his correspondence with the city council (and city staff) to Bob Dunning.
The Vanguard confirmed that the city explained to Bob Dunning, as well, how the rates worked, why Rancho Yolo is paying at the MFR, and why that is actually to both their individual and collective advantage.
Nevertheless, Mr. Dunning decided to write, “The esteemed elected representatives who put this rate structure into motion have so far been unable to provide the Rancho Yolo folks with any reasonable explanation for the vast cost discrepancy between their rates and everyone else’s.”
In making that statement, Mr. Dunning very conveniently ignores the fact that the current MFR rate per ccf is $1.90 after the first 14 ccf, so the residents of Rancho Yolo are actually seeing their price decrease from $1.90 per ccf to $1.81 per ccf.
Bob Dunning then does his best job to make the city council look incompetent here.
For example he writes, “Councilman Brett Lee was stumped, but at least straightforward … ‘To be honest, I don’t really know why there is a difference,’ Lee told Hallee.”
He adds, “Councilman Lucas Frerichs was even more blunt … ‘This change in rates is quite alarming to me,’ Frerichs noted.”
That leads him to write, “What’s alarming is that none of the council members who voted 5-0 to impose these rates on Rancho Yolo could explain the basis of the increase or why they voted for something they find so alarming in the first place …”
Mr. Dunning continues: “Mayor Joe Krovoza did allow that he ‘will be pleased to take a very hard look at this,’ without explaining why the ‘hard look’ wasn’t done prior to the unanimous vote imposing the rates …”
He writes, “[A]dded the mayor, offering a fig leaf to this cherished and long-standing senior community, ‘We have created a modest low-income program,’ to which Hallee tellingly replied, ‘We are not looking for low-income relief from the new rates. Rather, we want fair rates that do not require ‘low-income’ relief.’ “
Writes Bob Dunning: “To their credit, our council members did, of course, promise the Rancho Yolo folks that they’d refer it to ‘staff’ promptly and see if one of our well-paid ‘experts’ could come up with some sort of explanation.”
What Bob Dunning does not tell the public is that a WEEK prior to writing the column Jerry Hallee (he) spoke with Herb Nierderberger, the City’s Utilities Manager, who had the clear information to explain the rates. This was confirmed by Mr. Niederberger to the Vanguard on Friday.
But somehow that information never made either into Mr. Hallee’s letter or Mr. Dunning’s column.
“We are meeting with Mr. Hallee on Monday to further discuss his concerns about fairness,” Mr. Niederberger told the Vanguard on Friday.
He noted, “He is not using incorrect information; his (Mr. Hallee’s) conclusion about fairness is what is disputed. We will go over the cost of service analysis and the cost allocation method with him to allow him to understand the impact on multi-family users.”
Doug Dove from Bartle Wells will also attend the meeting, the Vanguard has confirmed.
—David M. Greenwald
David, so what was Jerry Hallee’s motivation in misinforming the voters? Did you ask him?
-Michael Bisch
I do not know Mr. Hallee and therefore would not begin to speak to his level of understanding or motives in this case.
However, we all know the public side of Mr. Dunning. Until now, I have been willing to give him the benefit of the doubt as the local entertainment columnist part of whose goal is to poke fun at public figures. This however, is in my eyes, beyond despicable. To use what you know is not true to try to portray yourself as a defender of the less economically advantaged is so wrong. Unfortunately, this, and unwarranted smears on three of our city council members, whose job is not to know every nuance of city policy, but rather to be willing to address issues when raised, as each member apparently did, have been the MO of the “No” campaign since the onset of the signature gathering for the referendum. It seems that the hallmark of the “no” campaign has been, if this lie won’t work, perhaps the next one will. Makes me wonder if they might be using Clinton Parish’s campaign manager.
David, I think you misinterpreted Jerry Hallee’s complaint ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6140:new-rates-would-be-unfair-to-rancho-yolo&catid=50:elections&Itemid=83[/url]).
When Jerry said that MFR is unfair compared to SFR, he was referring to criteria of fairness where the charge per water consumed should be the same regardless what meter is used. They are not asking for an installation of additional meters. They are asking “Why the rates are different”.
Could you answer the fundamental question why the per use charge is different depending on what meter one has? According to your report, Councilmen Brett Lee and Lucas Frerichs do not know. Who know why the rates [i]should[/b] be higher for MFR?
Here you have a 262 households willing to share a single meter, saving the Earth’s resources (in making unnecessary meters). The justification for their high rate is missing.
If you look at the 218 notice, it is all there. The MFR meter, probably 4″ given the number of units in Rancho Yolo, is a certain size/price per month. Of course a MFR is going to go over the amounts of water used for the single family tiered rates. You’ll notice that the MFR ccf charges lie between the tier 2 and 3 rates while we keep the current system of charging for 2 more years. Then the CBFR rates do not vary with meter size after that would start in 2015. Put it all together and the MFR is a very good rate, much less than counting it as that many families.
P.S. I am really weary of Dunning’s irresponsible writing at this point, since people do take his shenanigans at face value.
Above I should have written “Then the CBFR per [b]CCF[/b] rates do not very with meter size…”
So Edgar, the per ccf rates for a MFR meter are the same as for all meters under CBFR.
Hello Edgar! You have it assbackward. Dunning screamed bloody murder about the initial 6 month look back to set the rates. The council then tried to appease Dunning by forgoing the look back -appeasing tyrants is generally not a good idea!- and now Dunning is skewering the council for doing what he wanted them to do in the first place. The whole thing is absurd.
And are you really arguing that MFR rates should be lowered? NOE is already attacking the project by falsely accussing the city of subsidizing MFR owners at the expense of SFR owners.
It’s absurd to pretend that these constant atacks are any kind of rational effort to improve the project or the rate struture going on here.
-Michael Bisch
Matt, I am going to get bold again and say it might have helped (as far as accuracy) to have called it CBFAR, consumption based fixed annual rate. I think a lot of people have a hard time understanding how something can be fixed if it is changing annually and is based on something that is changing annually.
Re: dlemongello
I know that the use rate is the same under the actual CBFR (after the transition period). That is correct. It should be the same.
Re: Michael:
[quote]And are you really arguing that MFR rates should be lowered? NOE is already attacking the project by falsely accussing the city of subsidizing MFR owners at the expense of SFR owners.[/quote]
I was saying that the use rate should be the same for everyone regardless of meter size. And that when I read what Jerry said, I think that David misinterpreted Jerry’s meaning.
What is NOE?
I also think it would behoove our council members to understand the CBFR. Maybe some of the quotes above are out of context or something.
Edgar, the answer to your question is rooted in the principles of a cost-of-service analysis. Bartle Wells completed just such an analysis as part of their rate consulting engagement. It underlies the rates.
The Multi-Family rate in year one of the new rate structure is $1.81. The Single Family rates are tiered from $1.23 to $1.37 to $2.33. If an account has lots of Tier 3 use then their weighted average per ccf rate will quickly exceed the $1.81 Multi-Family rate. Do you agree that by asking to be billed under the Single Family tiers that he is asking to be billed more money?
The answer to your question, [i]”Could you answer the fundamental question why the per use charge is different depending on what meter one has?”[/i] is pretty straightforward. The size of a meter is considered to be (by the standards of the American Water Works Association) a good representation of the load that an individual account places on the system. More load means more cost for the water agency. The data behind the AWWA standards should be near and dear to you as an engineer. What the data shows is that 1″ meter can support 1.7 times the water flow of a 3/4″ meter. AWWA’s argument is that supporting 1.7 times the load creates 1.7 times the cost. Therefore the fixed fee for a 1″ meter is close to 1.7 times the fixed fee for a 3/4″ meter.
Hope that helps.
Maybe they should carry a 218 notice with them and whip it out and explain to people when they get these questions.
dlemongello said . . .
[i]”Matt, I am going to get bold again and say it might have helped (as far as accuracy) to have called it CBFAR, consumption based fixed annual rate. I think a lot of people have a hard time understanding how something can be fixed if it is changing annually and is based on something that is changing annually.”[/i]
Good suggestion Donna. Not bold at all. Actually, the city’s Prop 218 notice misstates the spelled out name of CBFR. The correct words are Consumption-Based Fixed Revenue. Revenue is typically thought of in annual terms, so your thought process and Frank’s and mine are very much in alignment.
Re: Matt,
You answered the wrong question.
As you would agree with the actual CBFR rates, the use charge would be the same for everyone regardless of meter size.
When Jerry complaint that they are overcharged during the transitional period, I think the correct answer should be, “Yes you are being overcharged, and you have always been overcharged. But with CBFR, you will be less overcharged.”
There is no defense about the tiered system. There is no need to defend it. Just them they it has been wrong and it is being fixed.
The notion to defend a decision is incorrect.
[ Issues with CBFR ] ([url]http://skylet.net/docs/2013-02-18-2347-WaterRatesInfoList.htm[/url])
This manipulation has demeaned The Enterprise as a source of accurate information. I can’t tell you how disappointed in Bob I am. Both Jerry Hallee and Bob Dunning owe the community an apology.
Edgar Wai said . . .
[i]”I was saying that the use rate should be the same for everyone regardless of meter size. And that when I read what Jerry said, I think that David misinterpreted Jerry’s meaning.
What is NOE? “[/i]
NOE = No On E
Your argument that the use rate should be the same is not supported by the data. Multi-Family Residences place proportionally less incremental load on the system in the peak period than Single family Residences do because they use significantly less irrigation water per person than SFRs do. Therefore less capital construction costs are incurred per ccf for the MFRs.
The tiers exist in the SFR rates because water use in the 0-18 ccf range has almost no irrigation, therefore it has no peak load cost and a lower rate; in the 18-29 range there is modest amounts of irrigation with modest peak load cost; and in the over 29 range the use is virtually 100% heavy irrigation with attendant high incremental peak load cost.
If you want to read a really good article that delves into the balance of proportionality and conservation go to [url]http://www.kysq.org/docs/waterbudgets.pdf[/url]. It was written by Kelly Salt, the Prop 218 expert attorney to whom the city turned for legal advice on the rate structure.
Edgar Wai said . . .
[i]”Matt, You answered the wrong question.
As you would agree with the actual CBFR rates, the use charge would be the same for everyone regardless of meter size.
When Jerry complaint that they are overcharged during the transitional period, I think the correct answer should be, “Yes you are being overcharged, and you have always been overcharged. But with CBFR, you will be less overcharged.
There is no defense about the tiered system. There is no need to defend it. Just them they it has been wrong and it is being fixed.
The notion to defend a decision is incorrect.
[ Issues with CBFR ]” [/i]
No Edgar I did not answer the wrong question. There were multiple questions in your original post. I addressed them in a focused manner in multiple replies so that reading technical jargon was easy for the readers.
No Edgar I would not agree the use charge should always be the same for everyone regardless of meter size. See my comment focused on tiered rates above. There are differential costs within user classes that justify differences in rates between classes. However, all users with an individual class all do pay the same rate.
Again I refer you to [url]http://www.kysq.org/docs/waterbudgets.pdf[/url]. After you read it you will understand the complexities of rate setting in California a bit better.
The decision made by Bartle wells to set the tier charges where they are is 100% correct.
Edgar, you persist in going on and on about the rates even though you’re aware that the community will continue to examine and revise the rate structure after the Measure I vote has been concluded. Indeed, the project hasn’t been designed yet, so we don’t even know the final project cost or the final rates. What is your purpose in carrying on relentlessly about the rates at this juncture instead of focusing on the key issue which is whether the community requires a sustainable water delivery system?
-Michael Bisch
“Indeed, the project hasn’t been designed yet, so we don’t even know the final project cost or the final rates.”
Bingo !
Michael, don’t pick on Edgar. He is questing for perfection. Is that really bad?
Eventually we all come to realize that perfection is elusive and we settle for the next best alternative.
rusty49 said . . .
[i]”Indeed, the project hasn’t been designed yet, so we don’t even know the final project cost or the final rates.”
Bingo ! [/i]
rusty, you misheard one of the called out numbers for “O” so all you have is “Bing.”
We do not know the final rates, but we absolutely do know the not-to-exceed upper limit of the rates. The final rates possibly could come down if the final project costs and the project interest rates are lower than the current projections, but we [u]know[/u] that the [u]rates can not go up[/u] above the Prop 218 published amounts.
Could it be that Hallee and Dunning are proposing that Rancho Yolo keep the (lower) MFR rate for its meters but pay for water usage at the (lower) single family rate?
Mixing and matching to get the best of both rates?
Re: Matt
Could you confirm if your reply implies the following meaning:
1) In a tiered system, the use charge needs to be different, otherwise the revenue can not be properly met.
2) When a bigger meter is installed, not only the meter itself cost more, but the water that runs through it also cost more. Therefore, the variable charge for the water consumed is higher for a bigger meter.
Re: Michael
I am not aware that the community is capable of examining and revising the rates because as far as I know, I am the only person pointing out some of the loopholes of CBFR. [The List] ([url]http://skylet.net/docs/2013-02-18-2347-WaterRatesInfoList.htm[/url])
What I want is for someone to understand the loopholes of CBFR so that I don’t have to be here and monitor the design process of the rates. As long as no one else understands it, I am a key and unique stakeholder. I am [b]ethically obligated[/b] to be present in the design and decision making process. I don’t have an ethical option to be absent.
If you want me to be absent, you need to find someone that will stand in place for me. Otherwise, the truth and principle of fairness will be lost to the community.
I will return tonight. I need to do stuff during the day.
Rusty49
[quote]”Indeed, the project hasn’t been designed yet, so we don’t even know the final project cost or the final rates.”
Bingo ! [/quote]
What do you mean by “Bingo” after this statement. There are many times during our lives that we commit to a course of action without knowing exactly how it will play out or exactly what the final cost will be. If the goal is important enough, we will commit to the project, and rework plans as necessary to meet unexpected setbacks or costs.
One example is college education. When I first started college, I had no idea that I wanted to be a doctor.
I did know that whatever career path I chose, I would require a college education to get there. I had actually completed my BA with double majors in the social sciences thinking I was heading into law, when I discovered that was not the best choice for me. I then needed more money to take additional classes to fill med school requirements so I worked for the money. Using the logic of the “No” on I campaign, if I did not already know what specialty I wanted to be in, have my acceptance letter in hand, and know all of the expenses I would incur, then I should not start college in the first place.
Sometimes, you have to decide on a goal, and work towards it steadily even if you do not know all the details or all the hardships that may face you along the way. This is what we should have been doing all along. This process has not been a short one. Examining the needs for a conjunctive use water system and how that might best be achieved working with our nearby communities has been an ongoing process for at least 10 years. We could have been gradually setting aside money for this known future need but decided not to. That decision is not on the heads of the current council. It is not like someone just woke up one morning and said “wow” I think we should foist an expensive, unneeded, underhanded, unfair project on the citizens of Davis, although that is exactly how it has been portrayed by MH and co.
Could we please at least admit, as both sides already have that we need a conjunctive use plan, that our WAC voted 8-2 and our council 5-0 in favor of the current plan, and move forward instead of just pretending that
somehow a better option will just miraculously appear.
“The final rates possibly could come down if the final project costs and the project interest rates are lower than the current projections, but we know that the rates can not go up above the Prop 218 published amounts.”
And likewise if the project costs (incl. overruns) and/or interest rates are higher than current projections can we also expect our 2018 rates going forward to go much higher?
eagle eye said . . .
[i]”Could it be that Hallee and Dunning are proposing that Rancho Yolo keep the (lower) MFR rate for its meters but pay for water usage at the (lower) single family rate?
Mixing and matching to get the best of both rates?”[/i]
If they are eagle eye then they are in for a rude awakening when the bill arrives. The first 18 ccf will be billed at $1.23, the next 11 will be billed at $1.37 and all the ccf above 29 will be billed at $2.33. The last time I looked $2.33 was higher than $1.81 and using Jerry’s own use numbers the monthly ccf for Rancho Yolo exceeds 2,000. 2,000 times $0.52 means a monthly bill that is more than $1,000 higher than the MFR bill will be.
rusty49 said . . .
[i]”The final rates possibly could come down if the final project costs and the project interest rates are lower than the current projections, but we know that the rates can not go up above the Prop 218 published amounts.”
And likewise if the project costs (incl. overruns) and/or interest rates are higher than current projections can we also expect our 2018 rates going forward to go much higher?[/i]
The city and JPA are insulated against cost overruns given the structure of the DBO procurement documents and the contracts that will be built on those documents.
The interest rates built into the estimated costs model are very conservative. In my personal opinion there is virtually no chance that the actual interest rates will be higher than the projections. I’m willing to put my money where my mouth is on that one and will gladly make a friendly wager with you. Are you game for that?
Edgar Wai said . . .
[i]”Matt, Could you confirm if your reply implies the following meaning:
1) In a tiered system, the use charge needs to be different, otherwise the revenue can not be properly met.”[/i]
Edgar, it has absolutely nothing to do with revenue. It has everything to do with the cost-of-service analysis, which is the underpinning of Prop 218 proportionality and the provisions of AB 2882.
Rusty, I have been posting from time to time about how 5 years is nothing and it is clear even if the projected costs are correct our rates will continue to rise. If they were going to max out near the 2018 amounts I’d be much more comfortable about these costs. It is after 2018 that things get really out of hand, yet the focus is just on the next 5 years. They want us to just see it as inflation. I have not calculated the % inflation that would be but it is higher than the usual rate range, I can tell you that.
Edgar Wai said . . .
“Matt , Could you confirm if your reply implies the following meaning:
[i]2) When a bigger meter is installed, not only the meter itself cost more, but the water that runs through it also cost more. Therefore, the variable charge for the water consumed is higher for a bigger meter.”[/i]
No the water running through a meter at any time at any particular customer site costs the same amount regardless of the meter size.
Where you get variation in cost is when you 1) look at the running water at different times of the day, 2) look at the running water at different months of the year, and 3) look at the [u]aggregate[/u] load that the meter places on the system over a 12-month period.
dlemongello said . . .
[i]”Rusty, I have been posting from time to time about how 5 years is nothing and it is clear even if the projected costs are correct our rates will continue to rise. If they were going to max out near the 2018 amounts I’d be much more comfortable about these costs. It is after 2018 that things get really out of hand, yet the focus is just on the next 5 years. They want us to just see it as inflation. I have not calculated the % inflation that would be but it is higher than the usual rate range, I can tell you that.”[/i]
Donna, look at the following annual Revenue Requirements. They are the pay as you go numbers presented to Council in December by Bartle Wells and staff. Please note the period from 2017/18 through 2025/26. That is a pretty solid period of cost containment, and the reason that costs start going up again in 2026/27 is that the $12 million projected costs for building the third above ground storage tank in 2025/26 kick and the cumulative effect of inflation can no longer be absorbed in the annual budget by staging capital repair and replacement projects. If we conserve more and get our gpcd value below the 134 gpcd that the NRC projects (which is built into these Revenue Requirements) then the third tank may well get pushed out to 20/30/31 or beyond.
2011/12 — $9,978,000
2012/13 — $9,978,000
2013/14 — $14,169,000
2014/15 — $17,711,000
2015/16 — $22,316,000
2016/17 — $25,017,000
2017/18 — $29,002,000
2018/19 — $29,002,000
2019/20 — $29,002,000
2020/21 — $29,002,000
2021/22 — $29,002,000
2022/23 — $29,002,000
2023/24 — $29,002,000
2024/25 — $29,002,000
2025/26 — $29,002,000
2026/27 — $29,872,000
2027/28 — $30,768,000
2028/29 — $31,691,000
2029/30 — $32,642,000
2030/31 — $33,621,000
2031/32 — $34,630,000
2032/33 — $35,669,000
2033/34 — $36,739,000
2034/35 — $37,841,000
2035/36 — $38,976,000
2036/37 — $40,145,000
2037/38 — $40,145,000
2038/39 — $40,145,000
2039/40 — $40,145,000
2040/41 — $40,145,000
2041/42 — $40,145,000
2042/43 — $40,145,000
2043/44 — $40,145,000
2044/45 — $40,145,000
2045/46 — $40,145,000
2046/47 — $40,145,000
2047/48 — $40,145,000
2048/49 — $40,145,000
2049/50 — $40,145,000
[i]Could we please at least admit, as both sides already have that we need a conjunctive use plan, that our WAC voted 8-2 and our council 5-0 in favor of the current plan, and move forward instead of just pretending that somehow a better option will just miraculously appear. [/i]
That is a fair question.
I think that is the main problem with the NOE group… they have no better options on the table.
So, what we have here is a primary debate to try and perfect the rate system while the NOE group just pokes and sticks the supporters trying to enflame public opposition.
Matt, thanks for that chart again, so the 2018 rates might be good for another 9-10 years, depending on what ever else happens.
Rusty, you I think would be interested in this as I was responding to you earlier.
Also the numbers are a little different since council changed to full debt rather than pay as you go.
What is NOE? ”
NOE = [b]N[/b]o [b]O[/b]n [b]E[/b]verything
rusty49, for a generally pro-biz guy, you persist in posting exceedingly odd biz-related comments in these surface water project threads. It is “generally” the case when starting a business, developing projects, making investments that the decision-maker is working with projections, assumptions, unknowns, and otherwise imperfect information. As one proceeds with such projects, one learns more and more while the unknowns become less and less. That is the nature of it. With your approach, there would rarely be advancement, discoveries, innovation, etc. for lack of perfect knowledge. Where would we be as a community or a society today were we as cautious as you would have us be?
-Michael Bisch
dlemongello said . . .
[i]”Also the numbers are a little different since council changed to full debt rather than pay as you go.”[/i]
That is correct. For the short term reduction in the early year rates, the monies saved get moved into future periods. The difference is a bit less than $2 million per year in the years after 2030.
Edgar
[quote]In my conversation with Matt, he had demonstrated a gross lack of integrity in admitting any issues with the rates he proposed.[/quote]
Are you referring to your conversation with Matt here on the Vanguard or some other private conversation ?
Because if you are referring to the public conversation here, I cannot imagine how you could possibly have come to the conclusion ( with or without your rubric ) that Matt is demonstrating a lack of integrity in admitting issues with the rates he has proposed. Matt has stated repeatedly that the rate structure he proposes is not perfect and that it has issues, but that it is preferable to the other suggested rate structures.
Since he has stated this publicly many times, perhaps you are overlooking these particular statements. Or perhaps you are dissatisfied with his explanations, or wedded to another interpretation or rate structure. Or perhaps you just have a peculiar rigidity of thought process that only allows you to think in “black and white” such that anyone who does not agree with your interpretation must lack integrity. In any event, I cannot fathom how you could accuse Matt of a lack of integrity.
And Matt, this kind of accusation may not bother you, but it most certainly bothers me.
In my conversation with Matt, I mean the conversation here in DV and in email. I do not recall at any point when Matt confirmed any issue.
Please point out those instances.
For instance, Matt never publicly admit that Equal Discount would collect 100% of the revenue. You could ask Matt whether he agrees Equal Discount would collect 100% of the revenue.
Edgar, let me count the ways . . .
1) Edgar, this is all about reality. It is all about California. It is all about Proposition 218 and California Constitution Articles X and XIII . Otherwise it is simply an idealistic theoretical discussion that has no practical application to the situation we are in. The laws are the laws. No amount of discussion will change them. They are the fences within which we must operate. What is the point of having laws if you can not use them? If you want to have a discussion about whether the laws make sense or not, that is a wholly different kind of discussion. The timeline we currently have for our Prop 218 Notice and Measure I do not afford us the luxury to talk about theory. [b]I now understand why we have been talking past one another. You are embracing a much broader picture than I am. [/b]– Thursday, February 14, 2013 2:21 AM
2) [b]Agreed,[/b] and based on the way that costs are incurred for the periods of excess capacity, the only costs that are being incurred are the variable costs of use, and those variable costs of use are being 100% covered by the Variable Use Charge revenue. — Thursday, February 14, 2013 12:34 AM
3) [b]Agreed,[/b] but that is simply a project management issue, not a fiscal equity issue. — Thursday, February 14, 2013 12:34 AM
4) [b]The City may be accountable for its error, but that accountability will come via the ballot box.[/b] By law under the provisions of Prop 218 and the California Constitution that accountability can not enter into the billing process. — Thursday, February 14, 2013 12:34 AM
5) [b]Agreed 100%[/b] The construction costs have to be covered by the rate payers 100% — Thursday, February 14, 2013 12:34 AM
6) Edgar, [b]your victim vs. bully characterization is thought provoking.[/b] As I have pondered it, one aspect that has arisen is the scenario where Customer A’s Winter consumption drops from 30 to 10 and summer consumption stays level at 10. When that happens Customer A’s CBFR fee drops from 42.9% of the consumption-based fixed costs to 20% of the consumption-based fixed costs. In theory that 22.9% reduction is a reward for contributing free peak capacity to the system to help the system avoid future capital expenditures on incremental capacity. But in fact there has been no such contribution to the agency. The contribution happens in an off-peak period where excess capacity is already available in abundance. Does it make sense to be paid something for nothing? — Tuesday, February 12, 2013 8:05 PM
7) [b]That is very reasonable logic.[/b] That logic assumes a disconnect the decision to incur the cost from the payment method. I’m fundamentally uncomfortable with that assumption. I believe it creates a “tyranny of the majority” situation. Let me explain. Let’s say that you and I are walking through the Farmer’s Market together and we stop at one of the food vendors and we each decide to buy some food. I buy four items and you buy one. Each of us controls the decision about what to buy and how much it will cost. Later as we are walking I decide I do not want to eat all four of my items and I offer one of them to you. Should you pay for the item? Said another way, should you pay me for that “extra capacity” that is left over from our mutual food purchasing decision? — Tuesday, February 12, 2013 7:37 AM
8) P.S. [b]You are causing me to expand my thinking, and that is a good thing. Thank you.[/b] — Tuesday, February 12, 2013 7:37 AM
9) Edgar, I’m reading an interesting article (attached) right now that has illuminated one of the reasons you and I are ‘talking past one another.” S[b]pecifically, I am starting with my cost of service perspective at an agency level, while I believe you are starting at an individual consumer level. That causes a fundamental disconnect. [/b]– Monday, February 11, 2013 10:11 AM
10) As a result, a solution that works in a winter-heavy agency may not work in a non-winter-heavy agency, and vice-versa. Said another way, there is no “one size fits all solution.” — Monday, February 11, 2013 8:25 AM
11) One of the fundamental truisms of rate setting is “you can’t please all the people all the time.” That means that there will always be tradeoffs when deciding on a rate structure. I agree with you that a loophole exists, but I would posit that your solution has at least two serious loopholes as well. — Monday, February 11, 2013 8:25 AM
12) Keep engaging the thought process would be my choice. You are asking great questions. — Monday, February 11, 2013 8:25 AM
13) Michael, don’t pick on Edgar. He is questing for perfection. Is that really bad? Eventually we all come to realize that perfection is elusive and we settle for the next best alternative. — 02/23/13 – 10:20 AM
“13) Michael, don’t pick on Edgar. He is questing for perfection. Is that really bad? Eventually we all come to realize that perfection is elusive and we settle for the next best alternative. — 02/23/13 – 10:20 AM”
-Actually, it’s horrible. Crafting, implementing, and executing policies to achieve community objectives is a lot like sailing. Rarely does sailing on a straight course take one speedily to ones destination. Progress entails making choices, taking action, and adapting along the way. Make no mistake, failing to make a choice is itself a choice and it has consequences.
-Michael Bisch
Re: ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6144:clarifying-the-rancho-yolo-water-rate-situation&catid=50:elections&Itemid=83&cpage=30#comment-177262[/url]) Matt
Your list did not demonstrate that you admitted any fault you made. There are times when we agreed. But you can’t tell a person’s integrity when things are agreeable.
[quote]1) Edgar, this is all about reality. It is all about California. It is all about Proposition 218 and California Constitution Articles X and XIII . Otherwise it is simply an idealistic theoretical discussion that has no practical application to the situation we are in. The laws are the laws. No amount of discussion will change them. They are the fences within which we must operate. What is the point of having laws if you can not use them? If you want to have a discussion about whether the laws make sense or not, that is a wholly different kind of discussion. The timeline we currently have for our Prop 218 Notice and Measure I do not afford us the luxury to talk about theory. I now understand why we have been talking past one another. You are embracing a much broader picture than I am. — Thursday, February 14, 2013 2:21 AM[/quote]
In the context behind this quote, both Matt and I agree that the rates needs to be legal and practical. When a reader reads this quote, it makes it sound like I want something illegal and only theoretical. [b]Matt is not admitting that Equal Discount is legal and practical.[/b]
[quote]2) Agreed, and based on the way that costs are incurred for the periods of excess capacity, the only costs that are being incurred are the variable costs of use, and those variable costs of use are being 100% covered by the Variable Use Charge revenue. — Thursday, February 14, 2013 12:34 AM[/quote] In this context, there was no disagreement. We both agree that once the plant is built, the cost incured is the Use cost. The question was on the split of the “mortgage” for the brick and mortar of the plant itself, where the debt service still has to be paid.
[quote]3) Agreed, but that is simply a project management issue, not a fiscal equity issue. — Thursday, February 14, 2013 12:34 AM[/quote]In this statement there is no fault to admit. Both of us didn’t say anything wrong.
[quote]4) The City may be accountable for its error, but that accountability will come via the ballot box. By law under the provisions of Prop 218 and the California Constitution that accountability can not enter into the billing process. — Thursday, February 14, 2013 12:34 AM[/quote] There is no fault to admit here. Both of us didn’t say anything wrong.
[quote]5) Agreed 100% The construction costs have to be covered by the rate payers 100% — Thursday, February 14, 2013 12:34 AM[/quote] In the original context of this statement, you insisted that we were in agreement. In the context of the discussion, this was not what I said. In subsequent analysis, I used this to compare the billing methods from your perspective. In this statement, there is no fault to admit.
[quote]6) Edgar, your victim vs. bully characterization is thought provoking. As I have pondered it, one aspect that has arisen is the scenario where Customer A’s Winter consumption drops from 30 to 10 and summer consumption stays level at 10. When that happens Customer A’s CBFR fee drops from 42.9% of the consumption-based fixed costs to 20% of the consumption-based fixed costs. In theory that 22.9% reduction is a reward for contributing free peak capacity to the system to help the system avoid future capital expenditures on incremental capacity. But in fact there has been no such contribution to the agency. The contribution happens in an off-peak period where excess capacity is already available in abundance. Does it make sense to be paid something for nothing? — Tuesday, February 12, 2013 8:05 PM[/quote] Here you were only asking a question. The context is lost, but it seems that you did not understand the arithmatics of Equal Discount.
[quote]7) That is very reasonable logic. That logic assumes a disconnect the decision to incur the cost from the payment method. I’m fundamentally uncomfortable with that assumption. I believe it creates a “tyranny of the majority” situation. Let me explain. Let’s say that you and I are walking through the Farmer’s Market together and we stop at one of the food vendors and we each decide to buy some food. I buy four items and you buy one. Each of us controls the decision about what to buy and how much it will cost. Later as we are walking I decide I do not want to eat all four of my items and I offer one of them to you. Should you pay for the item? Said another way, should you pay me for that “extra capacity” that is left over from our mutual food purchasing decision? — Tuesday, February 12, 2013 7:37 AM[/quote] There is no fault to admit.
[quote]8) P.S. You are causing me to expand my thinking, and that is a good thing. Thank you. — Tuesday, February 12, 2013 7:37 AM[/quote] In the context, I had just proved to you why CBFR was fundamentally unfair. When you say it causes you to “expand” your thinking, you are not admitting that CBFR is unfair.
[quote]9) Edgar, I’m reading an interesting article (attached) right now that has illuminated one of the reasons you and I are ‘talking past one another.” Specifically, I am starting with my cost of service perspective at an agency level, while I believe you are starting at an individual consumer level. That causes a fundamental disconnect. — Monday, February 11, 2013 10:11 AM[/quote] In this quote you were not admitting fault, you were relaying information.
[quote]10) As a result, a solution that works in a winter-heavy agency may not work in a non-winter-heavy agency, and vice-versa. Said another way, there is no “one size fits all solution.” — Monday, February 11, 2013 8:25 AM[/quote] You were merely asserting your position.
[quote]11) One of the fundamental truisms of rate setting is “you can’t please all the people all the time.” That means that there will always be tradeoffs when deciding on a rate structure. I agree with you that a loophole exists, but I would posit that your solution has at least two serious loopholes as well. — Monday, February 11, 2013 8:25 AM[/quote] You were asserting your position.
[quote]12) Keep engaging the thought process would be my choice. You are asking great questions. — Monday, February 11, 2013 8:25 AM[/quote] You were just expressing your feeling.
A fault you have about Equal Discount that makes our discussion ineffective, is that you have not demonstrated your basic understanding of Equal Discount. If you give me a use pattern, I can show you what the splits are according to CBFR. But so far you had not demonstrated that you could do the same for Equal Discount.
But while you could not demonstrate your understanding of Equal Discount, you are making false accusations against it.
One of your false claims about Equal Discount is that it would overcharge the users or to cause a bigger system be built. This claims are false.
Please demonstrate your understanding before you make any further meaningless attack on the method] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6140:new-rates-would-be-unfair-to-rancho-yolo&catid=50:elections&Itemid=83&cpage=30#comment-177270[/url])
Re: Matt
When I point our your faults in understanding of Equal Discount, and you reply with comments such as “Good Question!”, the context is highly distorted.
You have been failing to understand the principle, the math, and fundamentals of logical proofs. I have been trying to [b]teach you[/b]. But you make the situation sound like you were teaching me.
Willful distortion of the context is Rank 5.
In case the logic is not obvious, when I say you had not demonstrated any instance where you admitted fault, it is insufficient to cite instances where you agree with me. You have to cite instances where [b]you did something wrong[/b] then admit that you did it wrong.
There were many opportunities to do so, but you repeatedly used the same arguments over and over when they were already proven to be false. If I did not stay here to reply, the context would be grossly distorted.
That is the lack of integrity that I was talking about.
For instance, do you understand now that your list of quote is insufficient to show that you had the integrity to admit faults? After I had just pointed out the logical fallacy.
Edgar, I am not attacking Equal Discount at all. I have said all along that it simply does not follow a simple chain of transactions approach. I have also said that it could work well in a non-heavy irrigation market.
As I said in the other jerry Hallee thread, the numbers you have in your example table show that the fatal flaw of of in your system in a heavy-irrigation market, is that you will be building a plant with 3,075 ccf of monthly capacity when the peak load of the customers you have outlined is only 2,123 ccf. So you will be building 44% more water system capacity then the customers need.
By coincidence, that is a very similar percentage difference to the 18 mgd vs. 12 mgd difference between the WDCWA plant size when the WAC began its deliberations vs when it ended its deliberations. For the life of me I can not understand why you want to incur all that extra expense to build capacity that isn’t needed?
When the WAC reduced the plant capacity from 18 mgd to 12 mgd it saved the citizens of Davis over $26 million. You are proposing a scenario that is worthy of Emily Litella. How are you ever going to win the Measure I ballot if you turn to the citizens, wrinkle your nose and say , “Oh, that’s very different….”Never mind.”
I have said over and over and over again that you are trying to solve a theoretical problem, and that that is why we are talking past one another. I am starting with the practical realities of the legal landscape of California and the hydrologic reality of Davis. I am also starting with the simple accounting principle that is the underpinning of the worldwide credit card system . . . if you are the cause of a charge on the credit card, then you pay for that charge. That principle works both coming and going. When a credit card holder receives a bill the only transactions on it are for products that customer has received. In your example market the bills sent to the customers show a total of 3,075 “ccf dollars” there is no way to get around that. It is often said that Don Saylor proposed spending 3,075 “ccf dollars.” Where did that get us?
Edgar, to centralize our continuing discussions of this topic a Message Board thread has been created. Using that thread means the the discussion does not have to jump around from place to place. The link to that thread is [url]https://davisvanguard.org/index.php?option=com_kunena&func=view&catid=2&id=996&Itemid=192#996[/url] which can also be reached by going to the bottom of this screen and clicking on the [b]Bulletin Board[/b] link
Edgar Wai said . . .
[i]”For instance, do you understand now that your list of quote is insufficient to show that you had the integrity to admit faults? After I had just pointed out the logical fallacy.”[/i]
One of the challenges in this discussion is that each of us is starting from a different premise. I am starting from the premise that perfection is not achievable and that all alternatives have faults. You are starting from the premise that no faults exist unless they are expressly articulated. So to resolve that impasse let me state here and now that the vagaries of individual jurisdictions throughout California, the USA and the World mean that the CBFR model has faults that in some individual jurisdictions are resolvable and in others are unresolvable. You may feel differently, but for me the key in scenario analysis is to determine the relativity of the faults to one another and analyze the merits of the many different violations of perfection that must be chosen between.
So for the Davis specific jurisdiction I accept the fact that Enterprise Fund accounting rules and provisions of Proposition 218 are the existing laws of the land and set up as one of the central assumptions of my analyses working within the parameters of those laws and rules and regulations.
For mer it is kind of like driving down a highway that has guardrails on either side of the road. In those cases I do not try and steer my car so that it jumps over the guardrails so I can drive on the lush green grass instead of the concrete roadway.