Water Project: How Much is Ownership and Joint Governance Worth?

water-rate-iconOn Thursday night, the Water Advisory Committee (WAC) narrowed down the project options from six to three.  The pattern was very clear and unequivocal. The WAC eliminated the three most expensive project options and kept on the table the three least expensive project.

Wrote Matt Williams in yesterday’s Vanguard: “The three projects still under consideration have current cost estimates of $130 million, $153 million and $157 million respectively.  Each of those projects has a different risk profile, and some movement in the costs downward is expected as those risk factors are clarified, but it is safe to say that the citizens of Davis will not be spending as much as an additional $60 million as a result of the hard work of Staff and the WAC last night.”

Of those costs, about $32 to $36 million of that is in operation and maintenance costs.

The least expensive option on the table is the only remaining West Sacramento alternative.  It is the scaled back, 12 mgd, West Sacramento Alternative for Davis Only with no Woodland.

The other two options also have 12 mgd components for Davis, with 18 mgd options for Woodland.  One is a scaled down project and the other is a phased project.

I was not there, so I do not know if the possibility of Woodland joining a regional option in West Sacramento is totally and forever off the table at this point.

However, what becomes clear is that the WAC has an interesting choice to be made.  Davis, if it opted to buy into West Sacramento’s existing project, would be purchasing water and capacity from West Sacramento.  It would not have ownership in the project.  It would not have any type of joint governance.

Matt Williams believes, “All these costs will more than likely come down even more as the WAC and Staff continue to do their due diligence.”

All of this sets up a very interesting question.  The West Sacramento option is alluring if it indeed saves the city a large amount of money.    But in many ways, that is the only redeeming quality of the West Sacramento project.

The city would have to have some reasonable assurances.  We were told a month or so ago that the city of Tracy had an interesting arrangement where they had a 40-year purchase agreement, another 40-year automatic renewal, and a 20-year buyout clause.  That meant they had essentially a 100-year pact that ensured water.

If the city of Davis could do that with West Sacramento, then it would be viable.  But as Chair Elaine Roberts Musser notes, we do not know what West Sacramento would agree to because “[n]o contract is as yet forthcoming between Davis and West Sacramento. Mayor Joe Krovoza and Council member Brett Lee plan to reach out to the City Council of West Sacramento, although no meetings have been formally scheduled.”

Bottom line, West Sacramento is a bit of a risk at this point.

Is $22 million enough to make the risk worthwhile? It could be.  But there are downsides to going that route.  First, we lose the joint governance agreement.  I know this has been both an allure to some and a flashpoint to others.

Those who like joint governance, point to the need for collaboration and community work.  The relationship between Davis and Woodland would be damaged if we forced them to build their own project – at much greater expense at this point in time.

Woodland has made some mistakes along the way.  They failed to build in short-term contingencies that would have kept them viable past 2016 for the short term.  But the bigger mistakes were made by Davis.

Davis failed to do a proper rate study.  Davis originally over-projected necessary capacity.  Davis bought into an overly-constructed and engineered joint project.  Davis failed to take adequate measures to assure effective outreach and community support.

Davis put forward confusing and overly-expansive rate hikes last September and, as a result of those mistakes, the voters, or a sufficient number of them, rebelled.

The result of the WAC process is considerable savings, with the expectation of further savings down the road.

So, one critical question not just for the WAC, but for the city council, is how much is enough to upset the applecart here and at this stage?  Do you bolt from your relationship with Woodland over $22 million?

I’m not offering an answer to the question; I want to wait to see more finalized numbers.  But I think this is a point that needs considerable community debate and discussion.

I would like to see a discussion on the merits of joint-governance versus the merits of a purchase agreement.

I will be particularly interested to see what the referendum leadership team comes up with.  They were set to have a formal policy announcement.  In some ways, the pace of events is moving too fast for that at this point in time.

But the bottom line is whether the current size of the project, with the cost, is good, and whether the $22 million difference is worth the negative consequences that would occur if Davis jumped from Woodland to West Sacramento.

—David M. Greenwald reporting

Author

  • David Greenwald

    Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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Budget/Fiscal

27 comments

  1. Would Woodland agree to the scaled back Davis portion of the JPA option? Do we know? And it seems there are other issues like DBO vs not. Would it need to be DBO if we stay with JPA? I thought that decision was still to come? So seems not just about the dollars. Good article David. Helps understand Matt’s which was also excellent.

  2. [quote]Would Woodland agree to the scaled back Davis portion of the JPA option? Do we know? And it seems there are other issues like DBO vs not. Would it need to be DBO if we stay with JPA? I thought that decision was still to come? So seems not just about the dollars. Good article David. Helps understand Matt’s which was also excellent.[/quote]

    In so far as I am aware, Woodland will agree to a scaled back Davis portion of the JPA option. The DBO issue is still to be discussed and decided. It isn’t just about the dollars. As the Vanguard points out, one issue is ownership versus being a customer. Other serious issues are water rights, EIR considerations, ozonation, etc.

  3. [quote]I was not there, so I do not know if the possibility of Woodland joining a regional option in West Sacramento is totally and forever off the table at this point.[/quote]

    For Woodland, it would be a more expensive option, so as far as Woodland is concerned, this option is off the table so long as it does not pencil out financially for them.

    [quote]Davis originally over-projected necessary capacity. Davis bought into an overly-constructed and engineered joint project.[/quote]

    That is entirely a matter of opinion, and there are differing views on this point.

    [quote]Davis put forward confusing and overly-expansive rate hikes last September and, as a result of those mistakes, the voters, or a sufficient number of them, rebelled.[/quote]

    Just remember, because the rate hikes were put off, means the ramp-up will have to be that much steeper when the time comes.

    [quote]So, one critical question not just for the WAC, but for the city council, is how much is enough to upset the applecart here and at this stage? Do you bolt from your relationship with Woodland over $22 million?
    [/quote]

    One important question that needs to be answered is how does the $22 million difference translate into monthly rate costs? In other words, does it represent an additional $25 per month, or an additional $100 per month?

    [quote]I would like to see a discussion on the merits of joint-governance versus the merits of a purchase agreement.[/quote]

    Stay tuned to the WAC meetings on Aug 9, 14, 16…

  4. “For Woodland, it would be a more expensive option, so as far as Woodland is concerned, this option is off the table so long as it does not pencil out financially for them.”

    Several people avetold me that’s not necessarily true, particularly compared to doing it alone

  5. …… “All of this sets up a very interesting question. The West Sacramento option is alluring if it indeed saves the city a large amount of money. But in many ways, that is the only redeeming quality of the West Sacramento project.”……

    Being further away from the point discharge of the Glenn-Colusa Irrigation District at Knights Landing is another. In this case, “dilution is the (partial) solution to pollution.”

  6. [quote]erm: “For Woodland, it would be a more expensive option, so as far as Woodland is concerned, this option is off the table so long as it does not pencil out financially for them.”

    dmg: Several people avetold me that’s not necessarily true, particularly compared to doing it alone[/quote]

    [quote]Don Shor: Great! Who?

    dmg: For starters Pinkerton and Kravoza[/quote]

    Please explain exactly what Pinkerton and Krovoza said, bc the WAC was told by Pinkerton that Woodland was not interested in a regional West Sac option bc it did not currently pencil out financially for them…

  7. [quote]dmg: Davis originally over-projected necessary capacity. Davis bought into an overly-constructed and engineered joint project.

    erm: That is entirely a matter of opinion, and there are differing views on this point.

    dmg: Go thing this is an opinion piece[/quote]

    Yes it is an opinion piece, and I am pointing out that there are many citizens who do not agree w your viewpoint. Some believe the Woodland project as proposed w all the bells and whistles was the best project for Davis…

  8. ERM: who believed the Saylor JPA project was the best project, other than insiders, many of whom stood to gain financially from it ? That project was about new urban development and water for it? The project that was the object of the 2011 Referendum would have Davis paying for over four times the amount of water that we will need in the lifetime of my four year old son, unless you assume the huge population growth that Saylor wants.

  9. What is evident from the studies is Davis and many valley towns have reached the maximum carrying capacity of the land, water and air that nourish us. The new EIRs that will have to be done for the Davis water project will show this. The EIR that was done for the Saylor JPA project whitewashed the impacts of the taking of water from the river and the negative effects that would have flowed from bringing all the new people and large scale development that Saylior wants.

  10. [quote]What is evident from the studies is Davis and many valley towns have reached the maximum carrying capacity of the land, water and air that nourish us. [/quote]Cite the studies… provide “links” so we can see for ourselves… or in the alternative, be quiet.

    You said [quote] who believed the Saylor JPA project was the best project, other than insiders, many of whom stood to gain financially from it ?[/quote]

    For you to have credibility, in my opinion (and this is an ‘opinion piece’) you have no standing to ask someone to cite ‘chapter and verse’, until you are willing to do the same… will have to look up the definition of “hypocrite”.

  11. Hpierce: Just follow the WAC and other concerned citizens contrubutions over the next couple of years. Weren’t you one of the loudest voices trashing the Water Rate Referendum last fall? I think you were; maybe I’ll Google and re-post some of your more shrill one?

  12. Michael Harrington: [i]”ERM: who believed the Saylor JPA project was the best project, other than insiders, many of whom stood to gain financially from it ?” [/i]

    [i]”The EIR that was done for the Saylor JPA project whitewashed the impacts…”[/i]

    Michael, you sounds like someone who is still upset that he lost an election to Don. Why don’t you try arguing on the merits rather than making repeated personal attacks?

    “Weren’t you one of the loudest voices trashing the Water Rate Referendum last fall? I think you were; maybe I’ll Google and re-post some of your more shrill one? “

    While you are at it, maybe you can re-post all of the false statements, personal attacks and attempts at character assassination that you used during the campaign. We enjoyed them so much the first time, I’m sure they will be good for a humorous read again.

  13. [quote]ERM: who believed the Saylor JPA project was the best project, other than insiders, many of whom stood to gain financially from it ? [/quote]

    Many think the original project as proposed was the best choice bc it had all the bells and whistles, whereas the projects under contemplation are much more bare bones without many of the niceties, some of which you yourself proposed – such as the reuse of graywater, rainwater cachement, etc. There are always trade offs…

  14. [i]”What is evident from the studies is Davis and many valley towns have reached the maximum carrying capacity of the land, water and air that nourish us.”[/i]

    I think it is very important that Davis residents understand that this is the starting point, philosophically, for some — probably several — of the members of the small group that has opposed bringing surface water to Davis.

  15. [quote]Just follow the WAC and other concerned citizens contrubutions [b]over the [u]next[/u] couple of years[/b].[/quote]Is that what you meant to say, Mr H? If they are existing STUDIES, performed by credible people, and if you was that the WAC has possession of them, I will. I have not seen one quoted to date.

  16. Harrington: “[i]West: so when did it become a personal attack to comment on an elected politician’s oft-stated policies ?[/i]”

    [i][b]Saylor[/b] JPA project was the best project, other than [b]insiders[/b], many of whom stood to [b]gain financially[/b] from it[/i] [emphasis mine]

    It was of course completely innocent on your part to put Don’s name in the same sentence with “Insiders” and “gain financially.” Last I checked there are five people on the City Council with at least three required to move a project forward, so why do you choose to name only one every time you attack the project? Couldn’t possibly be because you want to attack one personally?

    The fact is that every City Council in the past 10 years (including when you were a member) had the opportunity to take positive steps towards dealing with our water issues. Unfortunately, you and your cohorts chose to punt instead of doing anything proactive. You may choose to blame Don, but at least some of the Councils he was a member of acted to address the problem rather than leaving it for someone else.

    You? The best analogy I can come up with includes an ostrich and a pile of sand.

  17. Mike Harrington attacked me. I am not a politician and have nothing to gain financially from any project. I merely disagreed with him and called him on his bullying behavior.

    It has always been about stopping any and all growth in Davis and, more recently, Yolo County for Mike.

  18. [quote]It has always been about stopping any and all growth in Davis and, more recently, Yolo County for Mike. [/quote]Apparently not… he says he has a 4 year old. Apparently he is not against growth. At least for his family.

  19. [quote]”For Woodland, it would be a more expensive option, so as far as Woodland is concerned, this option is off the table so long as it does not pencil out financially for them.”–[b]Elaine Musser[/b][/quote]That’s nonsense, Elaine. It would be less expensive for all parties. It makes no sense from a monetary or an environmental point of view to build an entirely new surface water system for two rural towns.

    A regional system is less expensive, and it is better for the environment. Initially, Davis was planning to do a project with West Sacramento. Council was incorrectly told that Woodland pulled out.

    Obviously, there are a lot of special interests in play here. Someone has to stand up for the citizens of Davis and Woodland.

  20. [i]and it is better for the environment. [/i]
    How so?

    [i]Council was incorrectly told that [b]Woodland[/b] pulled out.
    [/i]
    Did you mean to say West Sacramento had pulled out?

    [i]Someone has to stand up for the citizens of Davis and Woodland.[/i]
    Are you purporting to speak on behalf of Woodland residents?

  21. [quote]erm: “For Woodland, it would be a more expensive option, so as far as Woodland is concerned, this option is off the table so long as it does not pencil out financially for them.”–Elaine Musser

    Sue Greenwald: That’s nonsense, Elaine. It would be less expensive for all parties. It makes no sense from a monetary or an environmental point of view to build an entirely new surface water system for two rural towns.

    A regional system is less expensive, and it is better for the environment. Initially, Davis was planning to do a project with West Sacramento. Council was incorrectly told that Woodland pulled out.

    Obviously, there are a lot of special interests in play here. Someone has to stand up for the citizens of Davis and Woodland.[/quote]

    According to a comparison of surface water supply alternatives, Woodland would have to pay for its share (total project $ up to delivery):
    1) Woodland project as proposed – $152,780,000
    2) West Sac/Davis/Woodland regional project – $180,600,000

    See documents/videotape for July 12 WAC meeting…

  22. I would also ask the following questions:
    1) How precisely is a regional system (Woodland/West Sac/Davis project) better for the environment?
    2) A regional system is NOT less expensive for Woodland, so please site your source of information that states otherwise.
    3) What “special interests” are in play here?
    4) How particularly are the WACs in each community not standing up for the citizens of Davis and Woodland?

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