by Alan Pryor –
by Alan Pryor – This was the first public announcement by City Staff of the scope of the long anticipated water rate increases needed to finance the proposed new water project yet they provided only a meager 2-paragraph report to the NRC in asking for their approval to Council.
- Normal and expected repair and replacement costs, which average about $1M/year and water main replacement, controls upgrades, and corrosion control;
- Operation and Maintenance costs; and Other capital outlays (i.e. East Area Tank), totaling about $13 M over the next 10 years
- $143M surface water project that is completed in 2016.
Staff is recommending an 18% increase. For residential customers with average water usage, this equates to an increase from $34.52 to $40.79 or $6.27 per month.”
This initiated a discussion among Commissioners and Staff as to how these requested price hikes were determined. Commissioner Doug Fetterly asked if the Staff had any additional information which supported the 18% increase. He indicated he would be reluctant to approve a rate increase unless he knew the basis on which it was calculated. Assistant Director of Utilities Sue Gedestad indicated that information could be provided to the Commissioners. She noted it was voluminous, though, and requested more specificity as to whether he was requesting information about the underlying rate structure or the costs associated with the proposed new water project. Commissioner Fetterly indicated he would simply like a one or two-page summary explaining how the 18% price increase was determined and that he was in favor of deferring a Commission decision until the February meeting when he and other Commissioners had time to review that information.
Planning Commission Liaison Kris Kordana, however, noted that if the NRC waited until their next planned meeting in February to provide input to the Council that it would be too late. He directed the Commissioners to the time scheduled requested by Staff to implement the general utility rate increase.
Dr. Kordana noted that the City Council would act on the rate increase request on February 16 regardless of whether or not the NRC had weighed in so he urged the NRC to deliberate to the extent necessary for them to give direction to the Council that evening.
Commissioner Charles Ehrlich voiced his opposition to rate increases saying he opposed the water project in general. He noted that he believed the city did not do nearly enough research to determine if the water project could be avoided entirely by implementing an aggressive water conservation program. He noted if UC Davis had removed themselves from the Joint Powers Authority which was comprised only of Woodland and Davis that the Davis financial burden would be even greater than previously anticipated.
This author then questioned, during public comments, why the city was raising rates now for a water project that has not even been approved and would not even be built for a number of years if ever approved. This author also asked if the revenues raised by this increase would be sequestered only for repayment of costs incurred in the water project or whether any of the increases could be used to support General Fund activities in the City.
At this point, Councilmember and NRC liaison Stephen Souza interjected and said that the city is now incurring significant upfront costs before actual construction of the water project begins. These costs were for the city share of contributions to the Joint Powers Authority for legal and Staff costs and other infrastructure work that needed to occur before construction of the project itself – including construction/maintenance of the planned intake structure on the Sacramento River. Council member Souza said all additional revenues derived from the increase would be deposited in the city’s “Enterprise Fund” which is used for public utility improvements. He later stated that if the water project did not come about these excess monies would be returned to the rate payers through lowering of future utility rates.
Commissioner Mark Lubell then asked what were the future planned rate increases necessary to finance the water project. Sue Gedestad stated they anticipated these increase for at least a few years. This was later clarified by Councilmember Souza who said 18% annual increases were planned for the next 5 years. Sue Gedestad added that 4-5% annual increases were planned thereafter.
After a moment of stunned silence, Commissioner Ehrlich quickly calculated that this amounted to a 229% increase from current water rates over 5 years taking the average residential water rate to over $80 per month. He noted that this did not even include sewage and garbage. It was also noted that this is higher than many home’s average monthly energy bills.
In the end Commissioners Fetterly and Ehrlich voted against sending the rate hike increase to Council with their approval. Commissioner Jennifer Holman abstained and Commissioners Herman Boeken and Adrienne Kandel voted to support the rate increases. Alternate Commissioner Mark Lubell also voiced support for the proposed increases.
Commissioner Kandel was careful to note that her support did not imply support of the water project rather that she believed that raising rates would encourage water conservation regardless of whether the water project was implemented or not.
Staff also recommended a 6% rate increase for sewage next year but because of the comparative smaller increase than that proposed for water rates, the basis of this increase and the potential for any further increases in coming years was not discussed by the NRC.
This could be the next financial bombshell to hit Davis residents!
Author’s Note – In the interest of getting this information to the public as soon as possible, other NRC agenda items that were discussed last night are not reported in this article. A subsequent article will discuss these other matters including election of new Commission officers, public requests to the NRC to increase the scope of their activities, Staff’s proposal to cut NRC meetings to every other month instead of every month, and the request by Council for Staff to consider variable garbage rates based on container size.
Be prepared for huge water/sewer rate increases. Your city bill is going to go up astronomically – far more than the estimated $6.27 per month. Sue Greenwald has repeatedly warned us about this. During the last rate increase, which netted nothing for the city according to the Public Works Dept., some citizens were hit with 400% increases. My worry is for those who will not be able to afford this increase. What then?
A citizen initiative appears to remain the ONLY viable option to stop this project in its tracks and move much more CONSERVATIVELY with further study, evaluation and implementation.
I have read about other water districts in California, most notably El Dorado Hills, that had increases in their constituents’ water rates to fund substantial increases in pensions for themselves and employees in the water district. Apparently, the increases in pension benefits for its employees were approved by the El dorado water district board several years earlier without regard to how the increases would be paid for under all economic circumstances.
So I was wondering about the pension benefits and salaries for NRC employees. Almost everyone I know has been impacted by furloughs and salary decreases, so each increase in costs for a family, such as this proposed large increase in water rates, has a large impact on the family budget. Are the employees at NRC sharing our financial pain? How are their salaries and pensions computed and what have been the annual increases for the last 7 years to their salary and benefit packages? This may be irrelevant, but it is a question I must have answered to determine how I will react to the current proposed rate increase.
Re: So I was wondering about the pension benefits and salaries for NRC employees
The NRC is a volunteer citizen commission whose members are appointed for 2 year terms by the City Council. They serve without any pay or compensation of any kind and receive no benefits whatsoever from the city or any other agency
Alan Pryor
“For residential customers with average water usage, this equates to an increase from $34.52 to $40.79 or $6.27 per month.”
Is that the average rate per month or per billing period, which is two months?
Assistant Director of Utilities Sue Gedestad indicated that information could be provided to the Commissioners. She noted it was voluminous, though, and requested more specificity as to whether he was requesting information about the underlying rate structure or the costs associated with the proposed new water project.
This is the kind of low performance public sector crap that fries me. Participating on any Board of Directors and having some manger or staff responded to my request for more decision-support information in that way, I would make my next mission in life to fire him/her for incompetence and/or insubordination. Come to the meeting stating that we will require 18% increases for the next five years, and 5-6% annual increases after that, and have no executive summary explanation!!! I do not know Ms. Sue Gedestad, but I would be itching to get rid of her and her boss for this sorry excuse for a presentation. I know she is probably feeling overworked and just responding to an unpaid volunteer commissioner, but he is an appointed overseer and functions similar to a Board member.
I wasn’t at this meeting and may be overreacting to what I am reading, but it does not sound like good goverment at work.
WHERE WILL THE MONEY GO? WHERE HAS THE MONEY GONE????
WHERE????
I voted to support the raise because:
1. I believe City staff that this was calculated as a break-even proposal where water use is neither subsidized by nor will subsidize the City General Fund.
2. The City has indeed begun a process of water acquisition, a policy that will not be changed by our recommendation on utility rates. If we put off paying costs until later we will have steeper increases and I’d guess higher financing costs. With gradual increase folks will see the price of water is rising and will invest in conservation in time to minimize their pocket book hit. And if costs are over-estimated and money is returned to ratepayers, their water conservation investments will have helped the environment and will keep their future bills down.
As a note, the City keeps trying for water conservation. I’ve seen efficient toilet rebates, notes on above-average water bills with phone numbers to call for tips, and requirements on water fixtures in remodels. By adding in some of the environmental costs of water extraction, the rate increase may cause considerably more conservation.
Also, I think the City was probably right to decide to acquire surface water because:
1. Federal water pollution requirements are tightening and our highly mineralized ground water is not clean enough to for us to continue discharging it into the environment. We will not be able to pump water, run it through our faucet, and send it down the sewage pipe unless we do a very expensive upgrade to our water treatment plant (for example reverse osmosis): more expensive than our surface water acquisition and treatment. Of course, treating ground water before distribution would be healthier but even pricier because we’d need over a dozen little pre-treatment plants. In other words, studies shown to the NRC say we cannot save money by avoiding the surface water imports, that without surface water imports we’ll have to raise our rates even more. (I think Sue Greenwald has challenged these studies, but I haven’t seen follow-up.)
2. Some of our groundwater wells here in East Davis have barely legal levels of chromium 6, carcinogenic to breathe in hot showers and maybe carcinogenic to drink. Our water is also very hard. Treated surface water have good quality, said the project EIR.
3. Our hard water encourages lots of people to use softeners, releasing salt into the environment, ultimately contaminating our water table and vegetation.
4. Many years we get land subsidence from groundwater pumping. I don’t know if it’s reversible.
ALSO:
Sue Gedestad doesn’t deserve the invective about her above. She works hard, these are extra hours, she has to split her limited time between many tasks. Has the criticizer never turned in a single memo where they summarized an issue insufficiently, even when faced with multiple competing and equally compelling tasks? Sue did answer oral questions and offer to get back to Doug Fetterley with further info but Kris Kordana pointed out it would be too late for NRC to act on it.
Sue Gedestad doesn’t deserve the invective about her above
Maybe so. She may be a hard-working and committed employee. If so, then I guess her boss deserves some invective for allower her to present unprepared, or for not allowing her enough time or support to do a proper job. I was thinking of what my own Board would do to me after a response like the one she gave.
These are huge increases and warrant a full analysis of justification and alternatives with a summary of costs and benefits for each (like you have done above). Spliting one’s time detween multiple tasks is no excuse for failing to meet the expectations of the job. Someone has to be responsible and accountable. If not Ms. Gedestad, then someone else should have presented.
I expect once the general public starts to understand the financial ramifications for what is being proposed or decided, there will be quite an uproar. That will be amplified if the proposers and/or deciders are not crystal clear about the details, and can communicate them in the form of the good old elevator speech.
Did you see on the channel 3 news last night about the discharge of human waste into the Sacramento river ? This river is supposed to be our next surface water supply , the city of Sacramento claims this happens 2 to 3 times per year , yet our discharge from our waste water treatment plant has a couple of minor things wrong with it .
Sounds like we have water discharge clarity under control in Davis !
Only 10 posts on water and over 80 on the Asmundson/Greenwald fight. I’m not sure I like what that implies.
Running the numbers, assuming five years of 18% rates and five years of 5% thereafter, our water rates nearly triple in 10 years. That said, I am very respectful of Adrienne’s comments on the need for the project, the only person who actually dealt with the issue at hand: Do we need this project; and, if we do, is the price too high to pay? I do not make a living in real estate development or have any developer link, but I am inclined to think it is worth the price when considering Adrienne’s points.
Finally, I agree with Boone that the thought of paying $300 to $400 every two months just for the water (based on my current $110 every two months for base, Tier 1 and Tier 2 usage) means the City has a lot of heavy lifting to do and they aren’t in shape to do it as of today. I also do not like the way the city dumps this decision on the NRC with less than a month from a deadline. That belies a strategy to force a vote in a certain way or, at best, it indicates bad planning.
One thing for sure, those kind of rates will definitely force a change in my attitude toward water use and conservation. But compared to the prospect of health care insurance rates doubling again over the next ten years, it’s not so bad. How many of us are reaching for the pitchforks and torches over the failure to reign in health care costs and insurance rates. Talk about being skinned alive by people with a not so hidden agenda!
Avatar, if I recall correctly, the surface water intake would be just upriver of Sacramento, avoiding pharmaceuticals and — new info for me — the untreated human waste you speak of. The river would still contain agricultural pesticides, supposedly very low levels, which the City should remove in its pre-treatment to the best of its ability. This contrasts with the ground water containing more harmful amounts of selenium, arsenic, and chromium 6, with deteriorating quality over time. The EIR and reports by City-hired “independent” reviewers like water quality professors and professionals had the surface water considerably more healthy than our groundwater.
Jeff Boone, thanks for your comments. Sue’s boss is we the people and we are in fact stretching City staff thin by asking for more services and analysis than we can pay for in these hard times with our budget cutbacks. Indeed we do not provide “enough time or support to do a proper job.” I have insufficient information to judge whether Staff could prioritize its limited time better on this topic, as I don’t know its full and diverse workload. The information I gave above is from previous presentations and reading materials given to NRC by City staff, but with Commissioner turnover not everyone has seen all of them.
“Finally, I agree with Boone that the thought of paying $300 to $400 every two months just for the water (based on my current $110 every two months for base, Tier 1 and Tier 2 usage) means the City has a lot of heavy lifting to do and they aren’t in shape to do it as of today. I also do not like the way the city dumps this decision on the NRC with less than a month from a deadline. That belies a strategy to force a vote in a certain way or, at best, it indicates bad planning.”
This issue has been around for literally years. Bob Weir from Public Works has consistently come to the Senior Citizens Commission on numberous occasions at our request, to keep us updated. I have sat through many, many presentations by City Staff at the City Council about the water issue. Bob Weir has been exemplary in putting this issue before the public, and taking the heat for doing so (I have often been a critic and asked plenty of difficult questions). I do see the need for the water/sewer project, but I also don’t know how citizens are going to pay for it. This is the disconnect I have been trying to get the City Council to address. I’m not even sure what the solution is. But the bottom line is if citizens cannot pay for the water/sewer project, so the result is many are driven out of Davis because of it:
1) Where will they go?
2) How will we pay for the project with fewer ratepayers?
Ultimately, I honestly believe this is more a federal than local issue. The feds are unwilling to back off clean water requirements at a time when the economy is in no shape to grapple with this issue. People are being laid off in droves – the county just laid off a number of employees. Schools will start laying off teachers. People out of work cannot pay bills. It’s grim out there, and we may not have hit bottom yet. And yet the City must build multi-million dollar water/sewer infrastructure just to meet some artificial standard that is very ill-timed?
I’ll say it a different way. I think if we look back in 10 or 20 years we’ll either be saying “In retrospect, the amount we’re paying for water isn’t that bad considering the poor schmucks around us who thought investing in surface water was too expensive back in 2010”, or “My $1,000 water bill would only be about $400 if those schmucks at the city had just gone ahead with the surface water supply solution instead of listening to all the whiners back in 2010”.
When you overdraft an aquifer, it does not come back. It does not heal itself. We are overdrafting. Unless you can count on climate change where the annual rainfall doubles and therefore both outstrips population demands on available groundwater and makes up the overdraft deficit, the situation is only going to deteriorate. Also, I should add that the biggest cost to groundwater is pumping cost, i.e., electricity. Who thinks energy costs will be cheaper in the future? Lifting water 100 feet up (or deeper) is expensive. Pumping it out of the river is much less expensive.
I should be more precise about the consequences of overdraft. When you overdraft an aquifer, you risk subsidence which is a process where the voids in the aquifer layer are compressed from the weight of the soil above the aquifer. Think of a sponge being squished and thus unable to hold water in the voids of the sponge. Where subsidence occurs, you lose aquifer storage capacity permanently. The greater the overdraft, the more likely you will have subsidence. We are overdrafting our aquifers on a regular basis and there is documented subsidence in Yolo County and many other areas in California. This is not good.