Michael Harrington this weekend confirmed with the Vanguard that the group gathering signatures for an initiative petition is close to turning in its signatures.
To qualify for the January ballot, the initiative backers would need to submit their signatures within the next two weeks. In order to qualify they would need five percent of the numbers of votes cast for candidates for governor in the city of Davis in 2010 – a figure which is 1161.
The initiative seeks to invalidate water rates that were set during the joint Measure I – Prop 218 process in the spring of 2013.
“New rates approved by the City Council this year increase annually for the next five years,” the initiative backers, Pam Nieberg and Ernie Head write in their initiative statement of proposed action. “After the five year increase, the water bill paid by a typical, single-family residential customer (including new base rates and consumption fees) will have at least tripled.”
They argue, “The new, confusing Consumption Based Fixed Rate (CBFR) fee included in the new rates would base each rate payer’s monthly (January through December) water rates on the amount of water used during the 6-month peak consumption period (May through October) of the previous year.
“The resulting CBFR supply fee would significantly affect a typical water bill. One example is that Davis has an unusually high residential ‘household move rate’ per year, and the CBFR system would unfairly charge residents who recently moved into a home or apartment with last year’s occupants’ water consumption habits.”
They also attack the Prop 218 process, arguing, “Voters have not been given the opportunity at a regular, direct election to approve recent water rate increases, despite the voters’ clear statement in the successful Fall 2011 water rates referendum that the voters desired to repeal or vote upon such large increases.”
They add, “The people of the City of Davis desire to establish reasonable water rates that accurately represent the cost of providing water services to residents and business. By approving this initiative, voters will repeal the confusing, unfair and onerous CBFR rates that the City Council deliberately kept away from the voters by excluding these rates from the March 5, 2013 ballot with the surface water project.”
In the meantime, the city and opposition await the ruling by Judge Dan Maguire, who on December 16 heard about an hour and a half of oral argument between the attorneys for the plaintiffs Jonathan Morse and Michael Harrington, and, for the city, Davis City Attorney Harriet Steiner along with Kimberly Hood.
During the hearing there were several arguments that were put forward by the plaintiffs who argued that the Bartle Wells rates are fatally flawed because they charge different single family residence customers different fixed rates based on the size of the water meter, which they argue is a random assignment based on meter size and not based on usage.
As they argued in their brief, “It would appear that the size of the water meter installed on the single family residence properties was based on some random selection during initial water meter installation and not on a deliberate choice by the City or the rate payer based on the load intended to be placed on the system.”
The plaintiffs would argue that the meter size, in effect, forces low end users, most of which they claim are seniors, to subsidize the costs for water use by larger users. As Michael Harrington argued, “That’s just not fair, not proportional.”
But one of the key questions here is what exactly is the proportionality requirement under the law.
“Proposition 218 requires the Court to assess whether the charges are proportional,” Judge Maguire posed to the litigants according to the trial transcript the Vanguard acquired. “The question concerns the level of generality at which that analysis is done. And let me give you some choices, and you can tell me which one you think is appropriate.”
Judge Maguire would go on to posit three classes: comparing user by user, parcel by parcel or class by class.
Clearly, the plaintiffs were arguing at the user by user level, to which the court responded, “How do you square that argument with the language of the Constitution which says that the charge shall not exceed the proportional cost of the service attributable to the parcel? They didn’t say the user.”
But it was not clear that anyone would distinguish between a parcel and person, as Mr. Morse responded, “If you’re going parcel by parcel, you still have to be fair to everybody.” Judge Maguire clarified, “The distinction that I’m asking about is the distinction between a parcel and a person. A parcel is not a person.”
This gets into the next question. Mr. Morse clarified that that they were not arguing that everyone had to pay the same CCF, but at the same time, “at the very least it has to be a reasonable proportionality.”
The question, as Judge Maguire noted, was “how much discrepancy is constitutionally permissible?”
The city’s answer to the initial question is class against class. Harriet Steiner argued, “I think you end up getting to a rate structure that’s proportionate by classes and then within the classes proportionate to the users within that class.”
But one of the critical points that Judge Maguire made was: “I understand that argument. I understand the case support for it, and there is case support for it. What I’m struggling with though is how to square that concept with the language of Section 6 which says, “The charge shall not exceed the proportional cost of the service attributable to the parcel.” So that seems to suggest a more granular analysis than class by class.”
Ms. Steiner explained, “We do not build a water system based on gallon by gallon. We build a water system so that in August when you turn on your tap you get water.
“And so we build a water system based on two factors: capacity demands on the system and usage. And so between those two, there are both costs that go to capacity. If you have a house and you have a meter or you have a business and you have a meter, you have the capacity. And we build for that capacity.”
These are among the many issues that Judge Maguire has been weighing for some time.
An additional question continues to arise in all of this. As we have noted a number of times, the ballot language that the voters passed seems to make the passage of Measure I a binding Measure, “subject to the adoption of water rates…”
Michael Harrington has been arguing that this process is not over until the courts ratify the water rates. He argued back in July, “The Measure has a clause making an affirmative vote for the Measure also ‘subject to’ the adoption of rates conforming to Prop 218. Since the rates litigation has not been decided, the rates are not final. Measure I is not final.”
It is a view that was shared by CBFR (consumption-based fixed-rate) developer Matt Williams in a July post, “I’m not sure that the City has actually completed (satisfied) the conditions set out by the words you quoted from Measure I, ‘subject to the adoption of water rates in accordance with the California Constitution (Proposition 218).’”
He added, “I have no trouble arguing that there is a conditional adoption of the water rates, but until the water causes of action of the YRAPUS [Yolo Ratepayers for Affordable Public Utility Services] case are resolved by Judge (Maguire), then the legality of both the rates and their adoption is subject to conditions, and those conditions could indeed result in the rates never being fully adopted.”
Given the legal questions surrounding the rates put to Judge Maguire and the likely ballot initiative that could be on June’s ballot, is the city required at this point to stay any further efforts to go forward with the water project? Or will the project proponents need to seek an injunction if the rates initiative qualifies for the ballot or Judge Maguire invalidates the rates?
—David M. Greenwald reporting
“One example is that Davis has an unusually high residential ‘household move rate’ per year, and the CBFR system would unfairly charge residents who recently moved into a home or apartment with last year’s occupants’ water consumption habits.”
The water rates die on this alone. One cannot pay based on another person’s actions/behaviors; that is nonsensical from the gate.
Alan, there is a very simple solution to that problem. It is called “subscription and true-up” and it is used by many cell phone plans, the solar industry, the IRS and the Calafornia Tax Equalization Board on a broad basis.
It works like this. Any “new” customer has three alternatives for detemining the amount that they pay for their Supply Charge. 1) recognizing that by more than a 2-to-1 ratio more water is used outside the house, and changes in ownership or renters does not iaffect outside water use (because the plants still need the same amount of water to survive), most new residents will use the historical usage of water in order to set their “subscription” level for water. Their logic will be that history is the best teacher and the house has a history. 2) For those who believe that there is a different historical benchmark that will better reflect their usage, the City-wide average water usage for their class of service is another alternative “subscription” level. 3) For those who truly want to be independent of any historical benchmarks, they can set their “subscription” level at any point they want.
The “subscription” level will determine the amount an account pays for its Supply Charge through the end of October. Then when the May-October actual usage numbers are complete after the October month-end meter reading, a true-up calculation will be made that compares the actual usage to the “subscription” usage. If the actual amount exceeds the subcription amount then the November bill will include a one-time true-up amount due. if the actual amount is less than the subcription amount then the November bill will include a one-time true-up credit that nets down the November monthly bill. That is how it works in “subscription” cell phone plans. That is how it works in solar energy contracts. That is how the IRS handles taxes every April. That is how the State Board of Equalization handles taxes every April. It is as easy as pie.
Matt,
I believe I have some level of mathematical intelligence, and whenever you talk about water rates, my brain glazes over like molded jello. I could probably follow you if I invested the time, but frankly I’d rather watch Duck Dynasty (I don’t watch Duck Dynasty).
And that is the problem . . . for most people. Who don’t actually enjoy creating water rate plans.
History is not always a great indicator. I share my bill with my neighbor, and we alternate having housemates or not having housemates, having gardens or not having gardens, going through a wet spring or not going through a wet spring, and all these variables change our rates and which of us is paying more for water or last year’s sewer or whether it is indicative of next year.. Figuring out who owes what under even the current city plan is a F***ing nightmare.
Assuming anyway this three option plans works and is easy as pie, is this option plan actually IN the rate structure?
Alan, all legislation has wrap around policies and procedures (often referred to as regulations) that facilitate its implementation, but never appear in the language of the legislative document itself. This is no different.
Actually, this already happens with today’s rates, where tenants pay for the behaviors of the previous year’s tenants due to their Nov-Feb sewer habits. Some would argue that would make the CBFR legal; I would argue it makes the current rate structure also illegal. If not illegal then the law bites.
There appear to be several critical questions, namely what happens with the contract with Woodland if the rates are invalidated and if Measure I falls apart, what does the City do?
Alan: the sewer rates have the winter lookback feature, and are based on potable water consumption. Both are problematical under Prop 218. Everyone is focused on the water rates side of the trial, but the Court also heard our challenge to the sewer rates. If Plaintiffs prevail on the sewer, I think the writ of mandamus will require the City to immediately go back to the sewer rates that were in effect before the winter look back was established years ago. And then they are going to have to redo the cost of service study, and run a new Prop 218 notice period to get new rates.
Never a dull day in Davis!
Mike, yes I’m aware how they figure the sewer through the winter water usage, and the logic very loosely makes some sense. Some.
I’m glad you are challenging the sewer rates as well. I’ll have to show you the formula I used to use to figure out who pays what between my neighbor and I who are on the same bill. With the changes that have taken place, I am months behind as the formula is so complex changing it takes hours of staring at it to figure out how to tweak it, and there’s nothing I like more than to spend hours of my time on weekends staring at complex Excel formulas in order to pay my share of city services. Yeah.
How much is this costing us? Is anyone keeping track?
the real question that you’re not asking (because of your hatred for harrington) is how much more are low end users and poor people paying for their water because of dan wolk and his political comprise in december 2012?
I think I’m a low end user and relatively poor. I used 3 CCF last month and paid $25 for the month of water. No, I think this is about high end users and upper middle class people not wanting to pay more for their water, and would really like to see low end users pay more to subsidize their water use.
Again I ask, how much is Harrington’s lawsuit, representing 3 upper middle class water users, costing us? How much is an initiative signed by around 1,000 people in a City of over 65,000 going to cost us?
Oh yeah its Dan Wolk’s fault. Funny, I thought it took three votes to do anything?
Actually i think its Harrington, Price and Munn’s fault. You can also throw in Nieberg and Head. I do forgive Ernie though since he fought in WWll. Its a weird coalition of conservative, anti-tax and anti-growth types with Price added in with her weird anti-corporate agenda.
You forgot people who are very careful about the money they spend.*
* If I follow current societal norms, I can say that because I personally am a member of such a group of people who I self-identify as being wise when making their expenditures.
Self loathing stereotypes are still offensive no matter who uses them.
Three cheers for Dan McGuire in his recognition that parcels are not people. Now if we can just get other judges to realize that corporations aren’t people either.
Both corporations and people generate tax revenue and are taxed entities, and since we don’t allow taxation without representation, then corporations are allowed to influence politics. Parcels can generate tax revenue, but are not a taxed entity. Unions generate no tax revenue and are not a taxed entity… therefore they should not be allowed to influence politics. I think they need to cease to exist.
Corporations are allowed to influence politics because they bought the influence to achieve the Citizens United ruling, a decision that I consider absurd. A corporation is a legal fiction the sole purpose of which is to enable the efficient aggregation of capital for a designated business purpose. The parameters of that fiction are not vested in common law or equity, but rather in state and federal statutes. Those statutes can be changed, and if Congress weren’t bought and paid for by the corporations it’s supposed to regulate, it would amend those statutes to overcome the twisted logic that the Roberts court used to justify unlimited corporate spending for political purposes.
But we digress…
Ryan: Actually, since you asked … I think our little group has saved Davis ratepayers over $135,000,000 in unnecessary costs to date. This includes capital costs saved due to the referendum forcing the time out, and the public’s awareness that the fall 2011 rates were botched and the 18 mgd plant size was way too big (staff used old data to compute the 18 “need”).
I kept checking, but our bottle of holiday wine never came from the Offices of the City Council as a token of their appreciation.
But maybe the CC knows we have additional savings coming, so the CC is waiting to order the bottle from Valley Wine Company??
Ryan: one of the major problems with the current rate structure is it punishes the small and medium users, who subsidize the larger users. It also subsidizes commercial users on the backs of homeowners who need to irrigate their lots in the summer. I was down in CC Chambers when the business community came down in force and handed up spreadsheets that the public never saw that resulted in large savings to business at the cost of the homeowners who irrigate. At least 2 members of the CC were in on it, from the way it was handled and the rapid motion to approve.
Ryan: also, it’s not “Harrington’s lawsuit,” since I am not a party and just a mere attorney trying to assist these courageous ratepayers with their challenge to the City’s water and sewer rates. The guy in town with the most guts of anyone I have ever met is John Munn, who signed the suit as an individual. I’m proud of him, and it’s been an honor working with him. He would be a huge asset to the City if he ever decided to run for City Council. I am sure that a large committee would work night and day for him if he ever ran.
Yes, you are just a mere attorney with 3 clients who don’t want to pay more to irrigate their yards. Nothing courageous about that.
that doesn’t invalidate their legal claims.
Very convoluted argument, Mike.
Quit talking about low end users and poor. This is about upper middle class users who use a lot of water who want to keep their water bills low. Low end users are already paying very little and are not who you are representing. Compare $25-30 monthly for water to the $58 per month for garbage collection, $40 for sewer, $60 for gas & electric. Water is actually one of the cheapest things low income people pay for. If you want an expanded system capable of providing water during high peak times so that upper middle class people can irrigate their lawns during the summer, to not have tiers would result in lower income people paying to subsidize these upper middle class water users even more.
So this is all about your upper middle class water user clients (3) who have large lots and want cheap water to irrigate. John Munn even admitted this was the case for himself and that is who you are representing.
Ryan: Thanks for your comments, but if you look at the costs structure in the Bartle Wells Study, the very numerous low to middle users are paying the vast majority of the costs burden. Its especially true for the 2 yr B-W rate structure, but still burdensome in the CBFR structure.
If the City has to re-do the rates, they are going to have to factor in the fact that their assumption on water consumption savings is flawed, and the rate of decrease is going to blow past the 20% reduction that forms the basis for their model. The City and DJUSD are working quickly to stop using potable water from the supply system and instead rely on re-plumbed middle aquifer wells. There are several neighborhoods that are going to do the same.
Even if we lose the rates challenge and lose the initiative, I think the City is going to have to re-calculate the rates again after a year or two, and there will be a huge increase on the remaining accounts. We already know that by eliminating pay-go, and using financing, the City pushed back the biggest increases until after this 5 year rate package expires. I think our legal and political challenges are going to make the City come clean and show us the real rates that are needed to pay for the new surface water project ….
Funny … the two biggest advocates for this project were the Mayor and the City Manager, and both of them are probably leaving the City Government soon …. and the mess behind for the rest of us to pay for.
Michael,
Remember, this is not your case, you are merely the attorney representing clients. That’s what you said. So it is not “our legal and political challenges,” it is your client’s legal challenges and your political challenges that you are hoping to force the City to “come clean” – whatever that means.
The efforts of people to conserve water began in reaction to the warnings that water bills are going to double and triple. That was predicted. Now, the efforts are in reaction to an official drought. If people don’t willingly conserve, the government will need to force it with fines. Most people will find it difficult to reduce their water use beyond the 20% for any extended period of time and operating and maintaining a well is not free water either.
As I understand it, we did not move immediately to the CBFR structure right away to give higher users time to make changes in their water use in preparation for the change in how water rates are set.
It is difficult to see what your goal is other than you don’t want the project at all and want to continue using a water source that is slowly deteriorating in quality. You lost that argument, Mike. We already voted on that.
“You lost that argument, Mike. We already voted on that.”
yes and no. without a legal rate structure, measure i might not be in effect.
The measure read: “Shall Ordinance No. 2399 – be adopted, which grants permission to the City of Davis to proceed with the Davis Woodland Water Supply Project, to provide surface water as an additional supply of water, subject to the adoption of water rates in accordance with the California Constitution (Proposition 218)?”
The rates were adopted in accordance with Prop 218. I don’t see how overturning the rates overturns the election results. It just means the city has to come up with another rate structure and submit it to a Prop 218 vote. They don’t even have to submit it to a regular election, though they might choose to do so.
you’re thinking like a botanist not a lawyer.
first, it’s been nearly a year since the voters passed measure i, what is the statue of limitations for enacting the rates?
second, can the city legally take out bonds, sign contracts, while there are no enacted rates.
so it’s not nearly as simple as you imply.
you also run against another problem which is, say they pass radically different rates than the ones floated in the prop 218 during the measure i election, does that negate the intent of the concurrent process that the city justified in having separate rates and ballot questions?
Prop 218 and Measure I were two entirely separate things. People weren’t voting on the rates, as Bob Dunning will quickly tell you.
As to whether they ‘should’ be separate things, or whether Prop 218 accurately reflects the will of the people, that’s surely another debate.
I certainly agree with your basic premise that lawyers can make things more complicated, and that I may be looking at this too pragmatically rather than through a lens which seeks to obfuscate.
the city’s counter to the argument that the rates were not on the ballot was that the voters would know what the rates were when they voted. now given potential changes, bond rates going up etc., all or some the voters may end up getting rates that are higher than advertised at the time.
I don’t know, you tell me. What is the ‘statute of limitations’ on a vote. They have enacted rates, they have signed contracts, and they have (I think) taken out bonds. All done legally, I presume. So if the judge voids the rates, then maybe they have to put things on hold until they’ve gone through another Prop 218 process. Or maybe not. Do you know? But I don’t personally (speaking only as a horticulturist) see how it would void the election, since the election wasn’t about the rates.
I know the plaintiffs WANT to void the election. But that’s a different matter.
it’s not my area of practice, but that’s a key question someone needs to resolve
Woodland just got a huge loan at 1.5%. Is all this obstruction going to start eating away at what Mike claims to have saved us when delay ends up costing us more for interest on our bonds.
Toad: Why are you blaming the victims here? The CITY adopted these weird rates; the CITY used the “subject to adoption” language in Measure I; the CITY chose to proceed with the CBFR look-back of 6 months that is going to brown out the city; the CITY chose the winter water look-back of the sewer rates. The CC knew what it was doing, was warned about these issues, and yet did them anyway.
I fell out of my chair in CC chambers the night that the CC added the “subject to” language to Measure I. Why’d the City Attorney let them do it??
The CITY made that contract with the voters, and then cynically proceeded to violate it. I really cannot think of a better word to describe what the CC has done. THEY adopted the language, won the election, then violated the contract with the voters.
Toad: relax. At the end of the day, we will have fair, constitutional water and sewer rates. It might be from this go-around, or the next, or the next, but sooner or later, the CC will end up with a set of rates that passes Prop 218 muster. Don’t you want that? Don’t you want our fair city to follow the law? Of course you do! So relax. All things in due time.
I would prefer that you stop abusing your bar privilege to obstruct. You filed a petition demanding a vote. We had the vote. You lost. Then you file suit. Maybe you win, maybe not, we await judgement. What happens if you win. The city pays you a bunch of legal fees and starts the process over and comes up with some other plan that you will probably sue over. Does it ever end. I’ll believe it when I see it. Meanwhile the water quality sucks has too much boron and chromium VI. Does your family drink it or do you go to the well at the co-op?
Here’s my problem with your argument Mr. Toad: if Mr. Harrington prevails in his lawsuit, it means that the city put forth water rates that were unconstitutional. Not only would the city’s be unconstitutional, but many in the state would be. I understand you want to put the balme on Mr. Harrington here, but if he wins, the blame should be on the city, not Mr. Harrington.
The WAC recommended we go to a different, more equitable rate structure. (Now Mr. Harrington both concedes that but argues it doesn’t go far enough). The Council overruled their own advisers ordered the WAC to evaluate a Bartle Wells structure. When Brett Lee attempted to get Dan Wolk to allow the WAC to review the Loge-Williams rates, Dan was adamant no. In the end, Brett Lee and Joe Krovoza relented, and it went back to the WAC. The WAC decided that it couldn’t do that, and so against council wishes, they re-recommended Loge-Williams.
Dan and Rochelle then created this political compromise where we end up with two years of Bartle Wells and then Loge Williams. They did this knowing that Bartle Wells disproportionately charged people at the low ends, we are talking several times more per gallon than people at the higher ends of use.
It will be interesting to see what Judge Maguire rules in terms of the law, but if he overturns the rates, that’s on the council, not Michael Harrington.
And if he doesn’t?
Or if he does and says all the rates are unconstitutional in the state of California that is hardly the fault of the Davis city council.
One more thing: the CC voted 5/0 to move ahead with funding the plant and selling bonds before the adoption of rates that pass the court challenge and the Prop 218 water initiative challenge. Anyone here think that a particular CC member is “better” or “more fair” or “more progressive” or “more kind to the poor seniors” than another one? Not hardly. They all voted to violate the Measure I contract with the voters. I view them all the same, cut from the same cloth. I’d vote every one of them out next June if I could.