By Jerry Hallee
Two weeks ago, we received the city’s mailer that explains the proposed water rate increases. The mailer gives a sample single-family resident rate applied to a typical household.
Davis’ Rancho Yolo senior community is assessed at the multi-family residence rate, which rates are not mentioned in the city’s mailer.
We visited the city’s website to find the new rates that apply to us. And these rates also apply to the thousands of students and other apartment dwellers in Davis.
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. Proposed water rates under Proposition 218 are:
* For Rancho Yolo (MFR): $1.41 per ccf (current), $1.81 per ccf (2013) and $2.24 per ccf (2014);
* For single-family households: $1.50 (current), $1.23 (2013) and $1.53 (2014).
Why will Rancho Yolo residents have to pay for all our water at a rate higher than single-family residences pay at their highest tier?
This is unfair because our average Rancho Yolo household water usage (13.6 ccf per month in the summer and 9.5 ccf per month average year-round) is considerably less than the stated Davis single-family household’s (17 ccf per month in summer and 11 ccf per month average year-round), as presented in the city’s Prop. 218 notice mailer. We live in small homes with minimal landscaping, usually one or two people per home.
These unfair water rate increases will have real consequences for many of the Rancho Yolo senior homeowners who live on small, fixed incomes.
We have contacted all five City Council members, the city manager, the Water Advisory Committee chair and city staff assigned to manage the water project and water rates, none of whom could explain why there is such a huge disparity in water rates.
Rather, the responses have been equivalent to “We had no idea that the MFR rates you’ll be charged are so much higher than the SFR rates” or “the Davis billing system won’t allow a separate rate category for mobile homes.”
We can’t speak for the other Davis residents who fall under the multi-family rate, but it seems clear to us that Rancho Yolo residents should be under a rate category very close to the single-family rate.
How can the City Council justify going forward with these rates, given their inability to clearly explain their basis to residents?
The city should establish water rates that are understandable, and fair.
Jerry Hallee, a Davis resident is the President of the Rancho Yolo Community Association.
Does each home have it’s own meter and separate meters for irrigating common areas? If so, I don’t see why each home could be counted as single family and common area meters billed separately. Each home would also have to pay the fees for the fixed costs that single family homeowners have to pay, which may wipe out any perceived savings by reducing the variable rate. Additionally, that would make each home open to having to pay school taxes at the higher rate. (But as seniors, many could file an exemption.). If there are only common meters, the the multi-family rate would apply. It would be up to the homeowners association to resolve this with the City. Without more information, it is impossible to give any suggestions or advice.
News Item from today’s Entreprise (wink):
“City staff admitted today that the new water rates approved by the CC are unfair to every single Davis resident except for a citizen named James Buford in far north Davis. When the Entreprise sought out Mr Buford for comment they found he lived in a small unit with his own well and gray water treatment system. Buford seemed puzzled by all the fuss.
Staff seemed confused at that revelation but acknowledged that universal unfairness was built into the rates to provide much needed cathartic venting by every single city resident. An unnamed staff member noted: “We did not want this to get out publicly because our expert psychological consultant told us the catharsis would work better if citizens did not realize that rate unfairness was designed into the CBFR structure (to encourage venting).
Staff now fears that citizen catharsis will turn to depression as the truth that rates are going up for everyone sinks in and people realize that life is simply not fair.
2014 summer average differential $0.83 x 13.6 = $11.29 per month.
Over two years this would be a 1% cost of living increase on a $565 per month. I have no doubt that any increase is a hardship for those on small fixed incomes such as those living on social security only and i don’t know why these rates are going up more than others. What i do know is that fixed income pensions often are adjusted for inflation.
Robb
You write for the Onion? Thanks for the laugh?
Does each mobile home have its own meter and pay its own fixed costs plus the variable rate?
Or are there common meters with units sharing a connection (meter) thus avoiding the separate fixed costs for each mobile home?
Are the common areas of the community metered separately from individual homes?
Jerry Hallee should answer these questions, now that he’s brought his problem to the community for help in resolving it.
Once again, I think the DV should request/require/expect that guest authors agree to answer posters’ questions during the day of the article. This is another example of the need….I ask the editorial board to discuss. Thanks!
My recollection from an earlier discussion is that units in Rancho Yolo are not metered individually. So it is logical that they would be billed at multiple-family rates, though it is not necessarily fair. Perhaps Rancho Yolo units should get individual meters. I doubt a special rate category for mobile homes would pass the Prop 218 challenge by Michael Harrington. So his lawsuit, if he ever actually serves it and actually prevails, would force higher rates on Rancho Yolo residents. Repeat: Mike Harrington would force higher rates on Rancho Yolo residents. And that is regardless of whether Measure I passes, unless he and John Munn and Nancy Price withdraw their lawsuit.
If I’m wrong about individual units being metered there, I hope someone will correct me. If you don’t want to identify yourself here, just email me at donshor@gmail.com and I’ll post the answer.
The sites are not individually metered and if they were, the rates would be MUCH higher.
Don wrote:
> My recollection from an earlier discussion is that
> units in Rancho Yolo are not metered individually.
Over the years I’ve worked with a lot of Mobile Home Parks (that most people in the industry now call “Manufactured Home Communities” now) and I have never seen (or even heard of) a MHP/MHC built before 1990 that is individually metered for water.
P.S. I’m pretty sure that pre 1990 that apartments and MHCs in Davis were not even metered by the city. Does anyone know when Davis homes, apartments and MHCs got water meters (was it one year or over a multi-year period)?
So, I expect Jerry Hallee to write a letter to the editor of the Enterprise explaining his confusion once he understands how the multi-family complex will be billed. If he wants to have the same variable rate as single family homeowners, then they will have to meter each individual home and have each mobile homeowner pay the fixed costs as well as the variable rate.
I’m confused…
If each unit lacks a separate meter, how can the owner/renter of each unit even be billed for usage? If a single meter services multiple units, then it makes sense to use MFR. And, the rates would be no different than for apartment renters. But then, why haven’t apartment renters started to scream about unfair rates?
If it is a single meter, then why MFR?
By the numbers:
(As requested) ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6135:commentary-addressing-misconceptions-about-cbfr&catid=50:elections&Itemid=83&cpage=90#comment-177004[/url])
[img]http://skylet.net/docs/2013-02-22-0847-EqualDiscountCBFRExcessComparison10Years.png[/img]
[Updated comparison table] ([url]http://skylet.net/docs/2013-02-21-0231-EqualDiscountCalculator.htm[/url])
The text of the screenshot above:
[b]CBFR Loophole: [/b]Small users paying for the excess capacity allocated for big users. While each group saved 14% in water consumption, small users did not save any money. Instead, each small uer overpays by $1041 (9%), while each big user underpays by $301K (62%). In CBFR, small users are subsidizing the big users when they achieved the same percentage of conservation. This loophole comes from the summing of summer month usages. CBFR does not function the same in reality as intended by its designers.
Number of Accounts that Overpay: 13963 (85%)
Number of Accounts that Underpay: 2470 (15%)
Edgar wrote: “CBFR does not function the same in reality as intended by its designers.”
This is exactly what I have been posting for months. The City Hall “political spanking machine” changed the structure from the one intended by the designers.
“The City Hall “political spanking machine” changed the structure from the one intended by the designers. “
don’t think this is accurate.
the changes that I have seen are as follows:
1. go to all debt financing, that doesn’t impact the rate structure
2. go to BW in years 1 and 2 – that doesn’t impact the rate structure
3. change the tier cut – nope
none of those change the rate structure. so what is harrington repeatedly referring to? we know we won’t get a straight answer from him
What the hell is Mike H. talking about? What is a Davis City Hall “political spanking machine?” It is just nonsensical gibberish.
Frankly, since Jerry is not responding, it is unclear how the residents are paying for their water. The Community Association could be paying the bill from association dues collected from each resident. Note he refers to the “average Rancho Yolo household water usage,” which implies that he takes the water bill and divides it by the number of households served.
Until Jerry responds, we just don’t know.
Per a private email:
You were correct about Ranch Yolo’s plumbing. Their entire system is private, with connections to City water on E Eighth, and Pole Line. Just like an apartment complex.
David, May I suggest that you change the title of this article as “New rates would be unfair to Rancho Yolo” is incorrect.
Frankly wrote:
> I’m confused… If each unit lacks a
> separate meter, how can the owner/renter
> of each unit even be billed for usage?
Most Mobile Home Parks and in increasing number of Apartments will bill each unit for water either on a per person, per unit or per unit size (1br/2br single wide/double wide) formula. I recently heard from a UCD undergrad that was looking for housing that a lot more apartments are passing through not just water costs but all the city services (water, sewer, trash and pick up of the piles of leaves in the street)…
SOD:
“I recently heard from a UCD undergrad that was looking for housing that a lot more apartments are passing through not just water costs but all the city services (water, sewer, trash and pick up of the piles of leaves in the street)…”
Not if you listen to David and DT Businessman.
[quote]”I recently heard from a UCD undergrad that was looking for housing that a lot more apartments are passing through not just water costs but all the city services (water, sewer, trash and pick up of the piles of leaves in the street).”[/quote]How else would a landlord operate but add all such expenses, return on equity, profit, etc. and “pass through” to tenants in a form called “rent”? Then tenants directly pay for things like phones that are billed directly.
I don’t understand the concern that tenants (including Rancho Yolo’s) somehow are screwed by utility rates that are paid by landlords getting passed through if and when the market will bear it.
Of course, I don’t understand how the “no” folks have turned the whole conversation around to rate fairness confusion when we’re voting on whether we should improve our water system.
Justaying wrote: “Of course, I don’t understand how the “no” folks have turned the whole conversation around to rate fairness confusion when we’re voting on whether we should improve our water system.”
The CC tried stripped the rates off the ballot, and we have been trying to effectively put them back on. We shall see on March 5th if we were able to move fast enough to educate the public …
[quote]”This is unfair because our average Rancho Yolo household water usage (13.6 ccf per month in the summer and 9.5 ccf per month average year-round) is considerably less than the stated Davis single-family household’s (17 ccf per month in summer and 11 ccf per month average year-round),” [/quote]Assuming these usage figures are accurate, what could the RY “single seniors” be doing with water that has their average usage so close to single-family usage in both summer and year-round?
Something doesn’t seem logical here.
Measure I is about the Woodland-Davis Water project, despite what Mike wants to turn it into.
JustSaying – It sounds like they have one water bill that they figure out the average cost per “household.” However, they also probably have common areas that they irrigate that increases the overall bill. If each household were metered, then they could get a true accounting for each households water use, but they average it. They are just like an apartment complex. If they wanted to be treated more like a condominium complex, the homeowners would have to install meters for each unit and then also contribute association fees to pay for water in the common areas. This would mean that each unit would have to pay the fixed rates for their connection, plus the variable consumption charge. I believe that the households in Rancho Yolo fair better by remaining as a multi-family complex and avoid the individual fixed rates that SFH have to pay.
Jerry Hallee is out of town, so his responses to comments may be delayed.
Rent increases at Rancho Yolo are based strictly on increases in expenses such as school taxes, utility and insurance. The market would allow very large rent increases, but the family which owns the park operates the park almost like a charity, keeping rents very low and affordable for seniors living on minimal retirement incomes, some less than $900 per month.
Every unit in Rancho Yolo has a small yard, and there is an abundance of green space. There are many birds and lots of bees enjoying the variety of plants and trees and flowers. This is probably an asset for the whole Davis area.
MHP’s are interesting… they have common facilities, as Ryan points out, but sometimes there are unique needs for water… I know that in the 80’s, there was at least one resident who had a home dialysis machine… they would use more water than an individual in the same sized unit… what is “fair”? What is “equity? What is “justice”?
Too many variables to be “perfect” on rates… we do the best we can, but need, ultimately, to make decisions.
I’ve made mine. I have voted for I, and I can accept either the BW or L/W approaches on the rates, so will not be filing a ‘protest’ on the rates… at the end of the day, (unless we have a rate structure that gives Dunning and Harrington free water at my expense!), I have studied the issues long enough [and discarding the BS ones] that I’d just like to ‘move on’.
hpierce: if you get your wish and this plant is built, you will never be able to “move on”
Joe Friday just completed his investigation and found that . . .
In order to qualify for the Single Family Residential (SFR) rate, Rancho Yolo would need to either,
1) 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. Changing to Single Family Residential pricing for each Rancho Yolo unit would cost Rancho Yolo residents over $50,000 more per year. In exchange for that $50,000, the savings they would get on the ccf side of the bill, would max out at less than $15,000. The 12 month impact under this first SFR scenario would be that Rancho Yolo would pay over $35,000 per year more than under their current MFR scenario.
2) aggregate all their monthly usage under the SFR tiered schedule. That would mean that their first 18 ccf would be billed at $1.23/ccf for their first 18 ccf per month, then $1.37/ccf for their next 11 ccf and then $2.33 for all ccf over 29. Using Jerry’s number of 9.5 ccf per unit average per month, you get an average aggregate ccf of 2,500 (rounded). Using multi-family billing @ $1.81 per ccf the average Use Charge for Rancho Yolo is projected to be $4,525 per month. If they used the SFR three tier structure that average monthly Use Charge would rise to $5,795. The 12 month impact under this second SFR scenario would be that Rancho Yolo would pay over $15,000 per year more than under their current MFR scenario.
Moral of Jerry’s story . . . beware what you ask for.
Another point about MHP’s… generally “tenants” own their units, and lease the land those units are on… therefore, as I understand it, they qualify for certain tax breaks because they are “owners”, and may be eligible for others as “renters”.
Mr H… again, [u][b]you lie[/b][/u]… don’t even presume to tell me how I shall/will feel. Get over yourself… please…
Mr H, you have engaged me… I have tried to be factual in this matter… you, the opposite… I don’t recall suggesting/cajoling/lying to sway opinion… I have stated mine… how dare you say I am wrong/ill-informed/whatever when I say how I have come to my personal decision and have acted.
Your approach, in my personal opinion (which I am entitled by constitutional law to have, and express) is downright cancerous.
Jerry – I think you stepped in it!
Now some of us are wondering why you get these discounted MFR rates, when you each have your own lawn/garden area.
[quote]David, May I suggest that you change the title of this article as “New rates would be unfair to Rancho Yolo” is incorrect.[/quote]
This is his piece and his argument. The title reflects his view not whether or not his view is accurate.
There will be response and that will attempt to clarify the situation.
Oh, OK. I wish he didn’t post this article here and in the Davis Enterprise and then leave town. I can understand his confusion. It obviously wasn’t explained to him well enough for him to be able to take the explanation back to his neighbors. Maybe the explanations here will help him see that the set up the neighborhood has is the least expensive of all possible models.
hpierce: I am not your psychotherapist. My comments about never moving on were meant to refer to fiscal matters only. I did not say it specifically, but the intention and meaning were clear.
You continually go off … I’m sorry you are such an angry person when it comes to the water project, and you put it up on display. I don’t know if hpierce is your real name or not.
I use my name, and I appear at public hearings and testify. I put my name and law firm on the pending complaint. I’m proud of my work on the water issue, and I am sorry you disagree with what and how I accomplish the things I have done, on behalf of all ratepayers in town, including you.
Your water bill is still the same due to the referendum, and even if Measure I passes, you still are savings thousands per year from my work product.
I suggest you … listen to yourself … more often.
[i]Your water bill is still the same due to the referendum,
[/i]
Which is why the water fund is now millions of dollars behind.
$1.4 million behind.
a drop in the bucket compared to the lost decade.
Sheesh, Mike. Starting a comment with “I am not your psychotherapist” is not a good way to go…and you just go on from there. I suggest YOU listen to yourself.
Try to stay on topic, Mike. We are not talking about what a good boy you are. We are talking about proposed rates for Rancho Yolo.
Ryan Kelly said . . .
[i]”Oh, OK. I wish he didn’t post this article here and in the Davis Enterprise and then leave town. I can understand his confusion. It obviously wasn’t explained to him well enough for him to be able to take the explanation back to his neighbors. Maybe the explanations here will help him see that the set up the neighborhood has is the least expensive of all possible models.”[/i]
Ryan, it is my understanding (but I could be wrong in that understanding) that Jerry did get a very clear explanation last week from city staff, but that he did not like the end result of that explanation. I know my wife tells me that I am guilty of not being able to hear what I don’t want to hear. 8>)
Growth issue said . . .
[i][s]$1.4 million behind.[/s][/i]
$3 million behind . . . each year for 2 years
$50 to $100 million ahead.
We didn’t go through with the larger uneeded 18 mgd project.
Rates have one process. Project has another. We are 15 years behind.
Any word from Mr. Hallee?
[quote] I am not your psychotherapist. [/quote]As they say in the limbo song, “how low can you go”… not sure you have any limits Mr H… I know you didn’t as a CC member… you were guilty of attempted corruption, as I have heard, and I can provide my source, to confront you directly, if you will confront that person, and have the entire conversation available to the public… not just on this blog, but the Enterprise, the Bee, and the State Bar.
I think someone asked for a comparison between Proportional billing and CBFR.
[img]http://skylet.net/docs/2013-02-22-2239-YoloRanch.png[/img]
[b]CBFR Loophole:[/b] Since CBFR sums over the summer consumptions, it partially suffers the loophole that proportional billing has, where steady users are overcharged. For steady users, when Proportional billing overcharges Yolo Ranch residents by $3300, CBFR will only overcharge them by $2150. Proportional billing is less fair than CBFR for Yolo Ranch residents.
[The Table (html)] ([url]http://skylet.net/docs/2013-02-21-0231-EqualDiscountCalculator.htm[/url])
need to qualify my last post.. “in my opinion, based on information given me, Mr H [u][b]MIGHT[/b][/u]be found guilty”… bad typing on my part… apologies to all, particularly Mr H
[b]Effect of CBFR with Population Increase[/b]
[img]http://skylet.net/docs/2013-02-23-0106-PopulationIncreaseOvercharge.png[/img]
[b]CBFR Loophole:[/b] Early members are overcharged despite the rates are recalculated each year.
[b]CBFR Loophole:[/b] New members after the end of debt service pay no capital cost.
Edgar, please explain how early members are overcharged. It is not clear from your spreadsheet image how that is the case.
Regarding your second loophole, you are disregarding the “useful life” aspects of the capital items covered by the debt service. Do you think that that useful life is longer than or shorter than 30 years?
Re: Matt
[b]On how early members are overcharged[/b]
This loophole does not depend on proportionality, so the explanation can be done with simpler numbers:
o Let the debt service be 3 years long with $100 each year.
Year 1:
o Winter: A:20 B:20
o Summer: A:20 B:40 (Excess=40)
o CBFR: A:$33 B:$67
Year 2:
o Winter: A:20 B:20 C:10
o Summer: A:20 B:40 C:20 (Excess=20)
o CBFR: A:$25 B:$50 C:$25
Year 3:
o Winter: A:20 B:20 C:10 D:10
o Summer: A:20 B:40 C:20 D:20 (Excess=0)
o CBFR: A:$20 B:$40 C:$20 D:$20
Year 4:
o Winter: A:20 B:10 C:10 D:10 E:10
o Summer: A:20 B:20 C:20 D:20 E:20 (Excess=0)
o CBFR: A:$0 B:$0 C:$0 D:$0 E:$0
Sum of payments from CBFR:
o Shares: A:$78 B:$157 C:$45 D:20 (Sum=$300, Capital is 100% paid)
Sum of payments from Equal Discount:
o Max Use: A:20 B:40 C:20 D:20 E:20 (sum=120)
o Shares: A:$50 B:$100 C:$50 D:$50 E:$50 (Sum=$300, Capital is 100% paid)
The Overpayment in CBFR:
o Overcharge: A:$28 B:$57 C:-$5 D:-$30 E:-$50
o &#xOv;ercharge: A:56% B:57% C:-10% D:-60% E:-100%
[b]Remark:[/b] Note that C and D joined the system when the debt service is still being paid. Earlier, you claimed that CBFR would “reward” B for his conservation, while Equal Discount would not. According to this, Equal Discount results in B paying less than CBFR when new accounts are considered.
[b]Result:[/b] Each year, a new member would pay less for the capital cost.
[b]Regarding Useful Life aspect[/b]
The current comparison is done based on 0 decrease in useful life of the system. I think according to earlier discussions, the system proposed is supposed to sustain Davis until 2050. It was not clear whether by 2050 the system will need to be augmented or rebuilt. But in either case, the useful life is longer than 30 years.
When the system deteriorates, the Capital cost will increase.
Since you bring up the number [b]30[/b] years, could you confirm whether the terms of the debt services are 10 or 30 years? This question is related to Brett Lee’s estimation earlier about the cost, and the numbers you gave me. Please see this post ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6135:commentary-addressing-misconceptions-about-cbfr&catid=50:elections&Itemid=83&cpage=120#comment-177149[/url]).
Edgar Wai said . . .
[i]”On how early members are overcharged
This loophole does not depend on proportionality, so the explanation can be done with simpler numbers:
o Let the debt service be 3 years long with $100 each year.
Result: Each year, a new member would pay less for the capital cost.”[/i]
Edgar, that is only true if you assume 1) that debt service is an unreasonably short period like 3 years when actual debt service is 30 years, 2) that you only look at early members rather than looking at customers over the whole life cycle of their tenure as water system customers, 3) if you ignore the useful life of the capital construction, and 4) the impact of 16,400 accounts on the mathematics when such a turnover happens.
If you consider those four factors, your identified loophole doesn’t actually disappear in its entirety, but it diminishes down to virtual invisibility,
When somebody says to you, “No harm, no foul” what is your reaction?
Edgar Wai said . . .
[i]”Regarding Useful Life aspect
The current comparison is done based on 0 decrease in useful life of the system. I think according to earlier discussions, the system proposed is supposed to sustain Davis until 2050. It was not clear whether by 2050 the system will need to be augmented or rebuilt. But in either case, the useful life is longer than 30 years.
When the system deteriorates, the Capital cost will increase.
Since you bring up the number 30 years, could you confirm whether the terms of the debt services are 10 or 30 years? This question is related to Brett Lee’s estimation earlier about the cost, and the numbers you gave me.”[/i]
Some system components have a useful life of longer than 30 years (buried pipelines and the treatment plant building for instance), other plant components have a useful life of just about exactly 30 years (pumps for instance), other plant components have a useful life of less than 30 years. Regardless of what the items are they are goint to have to be replaced when they reach the end of their useful life. That is precisely what the $44 million identified by Kennedy-Jenks and Brown and Caldwell is doing, repairing and replacing system components that were added to the system many years ago and now have reached the end of their useful life. To assume a “0 decrease in useful life of the system” is unrealistic.
Regular bonds will have a term of 30 years. State Revolving Fund (SRF) loans will have a term of 20 years. No debt will have a term of 10 years.
[Re] ([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-177225[/url]) Matt,
I did the simplification [b]for your convenience[/b] because the factors you listed were irrelevant to show the effect. It shows up regardless how many account there are, regardless how many years the debt service is.
For the same numerical demonstration with 16400 accounts please see the actual spreadsheet. This screenshot shows the increase of accounts by 1% every two years, starting from 16433 accounts.
[img]http://skylet.net/docs/2013-02-23-2133-CBFROverchargesEarlyMembers.png[/img]
[The Table] ([url]http://skylet.net/docs/2013-02-21-0231-EqualDiscountCalculator.htm[/url])
You are correct that as the payment term of the capital investment increases, the overcharge for the earliest member would approach 0, but the undercharge linearly increases to the end of the debt service term. So, unless the system linearly goes out of service by the end of its debt service term, CBFR would be unfair. However, if the useful life and debt service durations are aligned, you would have to ask, “How exactly is it possible for a new user to join when the system is dead?” Therefore, the situation you proposed is logically impossible.
If the system is deteriorating there will be additional capital costs, and some of them may not require a debt service. In those situations, Equal Discount would require no additional calculation to distribute those costs to the users. But the loophole remains for CBFR, where you have admitted that if the payment time is short, CBFR will cause overcharge to whoever using the system that year.
In Equal Discount, whoever paid for those intermediate capital increaese will be reimbursed by new users.
Edgar, please explain what you mean by “the system is dead”
Further, I have asked you before and ask you again, have you included in your analysis the one time connection fees for new accounts?
Edgar looking at the numbers you have in your table the fatal flaw in your system is that you will be building a plant with 3,075 ccf of monthly capacity. The peak load of the system you have outlined is only 2,123 ccf, so you will be building 44% more capacity then the system needs. 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. Why do you want to incur all that extra expense to build capacity that isn’t needed?
Re: Matt
Could you confirm your meaning when “useful life” of a system decreases? Is your notion of useful life quantifiable? In my notion of useful life, it is a quantity from 0% to 100%. 100% means fully operational. 0% means the system is inoperable.
The analysis is to compare the effects of CBFR and Equal Discount in covering the capital cost of the water plant itself. The other charges of included in the proposal are irrelevant because they will be applied to both CBFR and Equal Discount. The irrelevant charges include:
o Distribution Charge
o Use Charge
o One-time connection fees for new accounts
These charges are irrelevant to the comparison because they will be [b]intentionally[/b] set to be the same in order to compare the difference between CBFR and Equal Discount in covering the Supply Charge.
Re: Oversize
You currently do not understand the principle of Equal Discount. It is impossible for you to make the argument that the system is oversized.
Because you have been repeatedly asserting this false conclusion, please use the spreadsheet provided to point out where you get the conclusion that Equal Discount would need to oversizing of the plant.
Or, could you [b]demonstrate[/b] your basic understanding of Equal Discount by answering this question:
Total Capital Cost of Plant: $100
Use Pattern:
o Winter A:30 B:40
o Summer: A:20 B:50
According to CBFR, the split is: A:$29 B:$71
What is the split according to Equal Discount?
What is the excess capacity that you claim?
Edgar, the example you provide is not a heavy irrigation example. It is a non-heavy irrigation example. End of story. Please rephrase the question with an irrigation heavy example and I will use your numbers to explain how you end up with an oversized plant.
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.
EQUAL DISCOUNT WORKS BEAUTIFULLY IN A NON-IRRIGATION HEAVY MARKET. IT IS THE FORM OF CONSUMPTION-BASED FIXED REVENUE GENERATION THAT I WOULD USE IN SUCH A MARKET. I have said that to you many, many, many times. You haven’t heard me before. Maybe if I SHOUT you will hear me this time around.
Edgar Wai said . . .
[i]”o One-time connection fees for new accounts
These charges are irrelevant to the comparison because they will be intentionally set to be the same in order to compare the difference between CBFR and Equal Discount in covering the Supply Charge.”[/i]
The principle of Equal Discount is, if I understand it correctly is to have the Supply Charge ensure that a new user “catches up” on capital payments, so that that new customer is not “underpaying” and the existing customers are not “overpaying.” If you are recovering the “catch up” in the Supply Charge, how do you justify a Connection Fee as well? Won’t that result in a double charging of new customers for capital costs?
Edgar Wai said . . .
[i]”Could you confirm your meaning when “useful life” of a system decreases? Is your notion of useful life quantifiable? In my notion of useful life, it is a quantity from 0% to 100%. 100% means fully operational. 0% means the system is inoperable.
The analysis is to compare the effects of CBFR and Equal Discount in covering the capital cost of the water plant itself. The other charges of included in the proposal are irrelevant because they will be applied to both CBFR and Equal Discount. “[/i]
Edgar, in the reality of the DWSWP the concept of “Useful life of the system” is meaningless. Neither Woodland nor Davis are ever going to allow the system to degrade to the point where the system has reached the end of its useful life. So the concept of useful life will only apply to system components. For example the pumps in the intake in the river will not last forever. They will need to be replaced at some time in the future. I have been told that the expected useful life of an intake pump is in the range of 20-30 years. There are similar examples of plant components scattered throughout the plant that will reach the end of their useful life in timeframes that are similar to the “useful life” of the debt service. As a result, as a practical matter, debt service on a project like this one will be never ending because there will be new borrowing in the future that replaces the old borrowing that lapses. Your theoretical analysis of equal discount assumes and end point. What evidence do you have that such an end point will ever happen?
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