The council was out of time if they wanted the measure on the March 2013 ballot. Staff argued, at least persuasively enough, despite the fact that there was no cost-sharing agreement with Woodland and no rate recommendations from the Water Advisory Committee, that another delay in the election would not only likely spell the end of the partnership with Woodland, but delay the project by another year.
The result of that uncertainty pushed the council forward. It was clear from the start that the council would go to binding language. Brett Lee asked for language that would simply authorize the council to move forward with the project with few specifics in the actual ballot language. However, the city would be tied to the agreed-upon rates that would concurrently be approved through the Prop 218 process.
The language would be crafted by City Attorney Harriet Steiner during a break and finessed by the council from the dais.
The ultimate language that would be moved by Lucas Frerichs and seconded by Mayor Pro Tem Dan Wolk read: “Shall Ordinance … be adopted which grants permission to the City of Davis to proceed with the Davis Woodland Water Supply Project, to provide surface water to Davis water customers subject to the adoption of water rates in accordance with the California Constitution (Prop 218).”
Critical to that motion was a separate motion by Brett Lee that would allow the council to retract this motion at their next meeting on November 27 should Woodland not agree to an appropriate cost-sharing agreement.
This agreement alleviated some concern by Councilmember Lee, who argued at one point, “I’m not comfortable with this.”
He argued, “I think we’re asking for some trouble within the community, since we’re kind of acting on hope.” He also suggested that it would be awkward for council to pull the item from the Board of Supervisors agenda because it would not comfortable with the ultimate cost-sharing agreement.
However, Councilmember Rochelle Swanson, acknowledging Councilmember Lee’s concerns, suggested that she would be willing to do just that if the council were uncomfortable with the agreement.
The problem from the council’s perspective was that they were simply out of time. They needed to get the ballot language and ordinance to the Board of Supervisors by Wednesday.
Steve Pinkerton argued that a two-month delay in the project would set the project back by another year.
Dennis Diemer, the General Manager of the JPA, explained, “The current schedule is predicated with completing the project by the fall of 2016.”
He explained that Woodland had regulatory requirements coming up that necessitated having the project done by that point in time.
In order to have the project done by that point, he said the design-build team had to be awarded the contract by September 2013 in order to complete the project by fall of 2016. The city of Woodland and the city of Davis would have to authorize, by August 2013, the commencement of design and construction. The requests for proposals have to be issued to the three DBO teams this December, Mr. Diemer continued, moving backwards.
“We have already adjusted the design-build-operate schedule two times in a significant way. Originally we were going to issue the RFP this past January, but we recognized that Davis needed to form their water advisory committee to commission their water rate study, and that would take time,” Mr. Diemer explained. “So we pushed the RFP to December – that was the first change that we made.”
At that time they anticipated that Davis would be voting in November – that has since been pushed back to March 2013. This required the JPA further compressing and adjusting the design-build-operate schedule to accommodate the March vote.
“We are at a point where we can no longer compress, edit or adjust the design-build-operate schedule and still meet that 2016 completion deadline,” he said. He argued that issuing the RFP in December and finishing that process by September 2013 are crucial to meeting that completion date.
In his presentation to the council, Utilities General Manager Herb Niederberger argued, “Any delay in the election may result in a project delay. It could result in the loss of a construction season which will impact meeting regulatory requirements and deadlines resulting in higher project costs. In addition, there is the potential impact to the public financing of the project.”
The staff has estimated the cost if Woodland were to proceed initially without Davis and Davis wanted to later re-join the process. He said the WAC saw estimates of project cost increases of between $15 million to $50 million to rejoin the project. That range would depend on whether Woodland proceeded with the intent to allow Davis to re-join the project.
Mr. Niederberger said, “If the City participates in the DWWSP, rate increases studied by the WAC indicate that rates for the average consumer will increase from approximately $34 to $94/month by 2018 (176% increase).”
He added, “Even if the City does not participate in the surface water project, the WAC was informed that rates could still increase from approximately from $34 to $55/month by 2018 (62% increase).”
“The water utility is currently running at a deficit due to the deferral of rate increases scheduled for 2011,” he continued. “In addition, with the loss of a viable surface water supply, the City will still be obligated to invest in additional groundwater production facilities and infrastructure as well as demand side management tools to meet consumer demands.”
Brett Lee expressed his discomfort with the process.
“On October 23 we decided we wanted to move forward with our partnership of Woodland,” Councilmember Lee said. “Now here it is… November 13 and it seems like it would be a fairly straightforward thing to agree upon the cost-sharing. I’m a little puzzled and dismayed that here we are on the 13th, and we have a JPA coming up in two days… and I was thinking we could get the cost-sharing agreed up and finalized it at the JPA and move forward.”
Both Dan Wolk and Rochelle Swanson noted that they had only had one meeting with Woodland over the cost-sharing, but both expressed confidence that it would get done.
The cost-sharing is now the linchpin to the deal. If adequate process is not made, the council could pull back in two weeks.
—David M. Greenwald reporting
“He explained that Woodland had regulatory requirements coming up that necessitated having the project done by that point in time.”
Woodland has/will clearly have made significant progress to comply with regulatory requirements. It makes NO political sense for the State to “punish” Woodland with heavy fines. For Mr. Diemer, delaying the approval of the project offers more time for the Woodland electorate to become increasingly politically engaged and informed about his project. This is his concern and motivation.