One of the critical unresolved issues in the Woodland-Davis surface water project, indeed one that still could have derailed the deal, had to do with an agreement to equitably share the costs, now that the city of Davis has reduced its share from 50 percent of the project down to 40 percent of the project.
In a joint statement to the Davis Vanguard, Mayor Pro Tem Dan Wolk and Councilmember Rochelle Swanson announced the agreement late Wednesday on cost sharing.
“We are pleased to announce that after a number of positive discussions, we have come to terms on an equitable and fair apportionment of costs between the cities of Davis and Woodland regarding the joint water project,” Mayor Pro Tem Wolk and Councilmember Rochelle Swanson said in a statement.
At the last council meeting, Councilmember Brett Lee crafted language that would allow the project to move forward as a binding vote. However, he expressed concern that the council would be moving forward with ballot language before reaching an agreement on cost-sharing.
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.
In his comments, he expressed discomfort in moving forward with ballot language, “We don’t have the rate information from the WAC. The WAC is advisory so we could move ahead with ballot language and await what the WAC recommends on Thursday but I think the bigger issue is that we don’t have clarity on what the cost-sharing agreement is with our partner Woodland on this project.”
“Agreeing to put something on the ballot at this stage before we even know what the cost is, what the general outlines of the deal are, I think’s problematic,” he continued. “I’m a supporter of having an additional supply of water, so it’s not that I’m opposed to it. But I don’t know how we move forward today by putting something on the ballot when we don’t even know what the cost-sharing is.”
That concern was alleviated by the council committing to revisit the issue of the ballot measure should Woodland not agree to the cost-sharing terms as laid out by the WAC at previous meetings.
However, Mayor Pro Tem Wolk and Councilmember Swanson both believed that they would reach an agreement. Woodland had indicated to the city of Davis they would be willing to discuss cost-sharing options when Davis committed to the Woodland-Davis water project.
The language of the WAC’s recommendation was contingent upon the cost-sharing arrangement. The WAC laid out three provisions. First, that both cities will share in the cost of the pipelines to convey the treated water to the city limits of each city. Second, that the cost share percentages of the entire project change to reflect the current anticipated reliance on the treatment facility. And the third, a recommendation that the council use arbitration or mediation to resolve the equity issues if the councils of the two cities and the JPA could not do so.
“Although it’s still contingent on the approval of both councils, under the agreement the cities would equally share all non-consumption-based costs and all consumption-based costs would be shared 60/40 between Woodland and Davis, respectively,” they announced on Wednesday. “Woodland has also agreed to pay for part of the Woodland-Davis treated water pipeline, to the tune of about $3 million (50% of the pipeline within Woodland’s urban limit line).”
“This resolution represents an estimated savings of $10 million to Davis ratepayers above the current cost allocation,” they continued.
The announcement of the cost-sharing agreement, presuming that the approval by both city councils is a formality, removes one of the last two hurdles for the project to move ahead.
“We feel that this is a good and amicable resolution, and we appreciate Woodland’s willingness to re-examine the cost allocation,” Councilmember Swanson and Mayor Pro Tem Wolk said. “As we have said before, this project is critical to the future of our community – of both our communities. This agreement represents a significant step in achieving that goal. We look forward to discussing this with our colleagues at next Tuesday’s Davis City Council meeting.”
The last major decision for the council is the approval of the rate structure. At the last WAC meeting, the WAC by an 8-2 vote that belied the contentiousness of the discussion, agreed to the Loge-Williams consumer-based water structure.
—David M. Greenwald reporting
So Davis is still heavily subsidizing Woodlands cost to build the plant?
No wonder the Woodland negotiators agreed so fast.
How so Mike?
Thanks to Dan and Rochelle for their efforts.
Am coming to the conclusion that Mr H will be opposed to the project unless Woodland agrees to pay 100$, AND guarantee FREE water to Davis, AND pay each Davis ratepayer $100/mo. for the privilege of being able to associate with Davis… but even if those conditions are met, he may still have reservations and may demand a referendum.
Davis is not getting fifty percent of the water, so why are we paying fifty percent of the fixed costs? If I did that on a normal real estate deal I would be viewed as foolish.
How’s this any different ?
The rates that the Davis voter will have to absorb is the most important consideration. Prop 18 will not resolve this and a referendum by ALL the voters who will have to find the money to pay for this project will still be necessary. The counter arguments will also play a significant role , e.g. why now?, how will developers, who are the main beneficiaries of doing the JPA project be contributing to putting this project in place which is critical to the residential development of their peripheral Davis properties which would not be possible without this project scheduled for completion just about the time that there should be a significant upturn in housing demand. The projected and reportedly mandatory sewer upgrade rate increases will also have to be considered when looking at the impact of the water project rate increases.
David: do you know why we are subsidizing Woodland fixed costs? Is that legal? Anyone ?
Mike, we have yet to see the final numbers, so lets wait and see what they are before passing judgment.
davisite, dealing with your final sentence fires, the sewer rates that were put into place in 2008 are already at a level designed to cover the costs of the impending sewer plant changes to include EPA and State mandatory tertiary levels of treatment. To the best of my knowledge based on the City’s financial reports, over 30 million of the expected 80-95 million cost of the upgrade is already accrued in the City’s Sewer Enterprise Fund bank account.
That should be “… final sentence first”
Davisite said . . .
[i]”… putting this project in place which is critical to the residential development of their peripheral Davis properties which would not be possible without this project scheduled for completion just about the time that there should be a significant upturn in housing demand. “[/i]
Have you no faith in Measure J/R?
“The rates that the Davis voter will have to absorb is the most important consideration”
Although I agree that rates are an important consideration, I do not feel that they are the most important.
In any purchase or project, the most Important consideration is, “Do I need it ? Only then does one move on to the questions of ” can I afford it” or in the case of a true need, “how am I going to pay for it” ?
In this case I believe that the need for securing a surface water source has been well established. There are some who either do not believe this is true, or who remain so devoted to their primary interest of blocking peripheral growth that they do not care that it is true.
One problem I see with the discussion is that the group favoring stopping the project entirely does not appear to feel that they have a winning hand with the “stop growth at all costs argumen”t and are therefore casting themselves as the champions of the poor and middle income or as guardians against some wholly fictitious evil cabal to the north. At best, these peripheral arguments are a distraction from the main issue, securing an adequate, sustainable water supply. At worst, in the long run the effect may be to actually hurt these groups. Does anyone foresee a time in the future when the cost of water will drop ? If you do not foresee this, then the issue becomes “are we going to start paying for a sustainable water supply now, or are we going to be content to pass this once again to the future citizens of Davis, some of whom will be our own children ” ?
“Have you no faith in Measure J/R?”
The only way that the Davis voter will be able to loosen the grip of the fiscal vice that they will find their gonads in to pay for this project in addition to the additional utility rate increases will be to dramatically increase Davis’ tax base(read peripheral residential development).
davisite, “the fiscal vice”???? The average residential bill was $35.00 per month even. Does an incremental $70.00 rise to the level of vice-like?
Further, well over 50% of the accounts in Davis are below the average of $35.00 (some down below $20), so the incremental impact on them is going to be as low as $30.00 per month . . . even less vice-like.
Finally, one of the key reasons that the Loge-Williams structure was created was to eliminate the proportionality penalty being imposed on low consumption users, so those accounts with the $30.00 incremental cost in a traditional structure will see that drop below $20, maybe even below $10 per month, making the numbers of voters who are able to look at a Measure J/R decision through very clear glasses (with no fiscal blurring) very high . . . very high indeed.
davisite2: [i]The only way that the Davis voter will be able to loosen the grip of the fiscal vice that they will find their gonads in to pay for this project in addition to the additional utility rate increases will be to dramatically increase Davis’ tax base(read peripheral residential development).[/i]
Or how about go in together with Woodland?
Mike: as I understand it, there are certain costs that are non-construction costs that are not dependent on capacity share.
The staff report explains: “Many non-construction costs should be shared equally in that they serve both cities and they are essential for the project to move forward. These costs have no relationship to capacity. Examples are; legal, easements, administrative, most engineering, etc.”
So the answer is, no, Davis is not subsidizing Woodland under this arrangement.
Thank you Rochelle and Dan for renegotiating the cost sharing of the Davis Woodland water supply project. The WDCWA Joint Powers Authority Agreement will now have to be amended to reflect the change. Section 6 of the agreement anticipated a chance might happen between all the parties, including UCD. Here is the link to the Agreement: http://www.wdcwa.com/images/uploadsdoc/Final_signed_JPA.pdf