Eliminating Tiers Widens the Shift of Subsidization to the Low Users – The Vanguard strongly supported the council adoption of the CBFR system, but there were compromises that were needed to get this system approved on the second pass.
The biggest and most obvious compromise is having approximately 20 months under the Bartles Wells Fixed Rate, with Inclining Block Rate. While mitigated somewhat by moving from a system that relied on 50% fixed costs, down to 40%, you still end up costing the low-end users – the bottom 25% – between five and ten dollars per month in the first year, and somewhat more than that in the second year.
Second, by going to a CBFR with the uniform block rate, while the difference from the inclining block rate is exceedingly small, it still ends up costing 75% of ratepayers more money – we are literally talking a dollar or two, but it does cost slightly more money.
I bring this up, because, I have to wonder exactly what Bob Dunning was looking at when he wrote his analysis on Wednesday morning.
He argued, “It might have made more sense to eliminate tiers as well during the two-year transition period – council members seemed willing to go either way on this one – the Tier II break-off point was raised from 10 ccf per month to a much more family-friendly 18 ccf per month …”
What he fails to note is that eliminating tiers those years means that the bottom-end users end up paying a lot more than they do under CBFR. $12 more for those using just 5 ccf of water a month. But even for the highest user, the ratepayer pays more under BW uniform than under either BW inclining or CBFR.
So why would Bob Dunning espouse the view that it makes more sense to eliminate tiers when it costs everyone more money to do so?
“Had tiers been eliminated across the board for all five years, the water project itself might fare better at the ballot box in March,” he continues, but again, he is clearly not looking at the water rates when he writes this.
Here is the amazing part, as Mr. Dunning writes, “But what the council approved Tuesday night is a vast improvement on what was being considered just last week … it goes a long way toward putting all Davis water users on equal footing and gives them certainty about the size of their future bills and the steps they might take to control them … that option was not available in previous plans the council was considering …”
We can certainly agree that putting forward CBFR is a vast improvement over what the council was considering a week ago.
However, eliminating tiers does not do what Mr. Dunning thinks it does. Eliminating the tiers actually makes it less equal.
To illustrate this point, we actually go back to the chart that shows cost per ccf.
There are two alternatives for Bartle Wells and two for CBFR on this chart. Notice first of all, that in all systems, the lower user pays more per ccf than the highest users.
It is vastly more fair under CBFR than under BW. But in each case, the inclining block rate is more fair than the uniform block rate. It is not a huge difference, particularly in CBFR, but it is there.
Under CBFR, you are looking at a matter of cents per ccf difference in uniform and block. However, only at the 90th percentile is the user advantaged by uniform over inclining, and even then the difference is only four cents per ccf.
The idea that tiers create a system where some people pay more per gallon of water is actually nonsense. The fact that there are fixed costs in the system creates that fact, and tiers only act to mitigate that somewhat.
The differences are small enough, for CBFR, that I think the council could have justified going either way, but the more fair system would have been to include tiers and, once people saw the actual numbers, they would drop the argument that we have seen floated that tiers produce some sort of discrepancy.
The whole notion of tiers was summed up by Bob Dunning on December 11 when he wrote, “The problem with tiers in the WAC plan is that at a very low level of water usage you suddenly find yourself in the more expensive Tier II, where you are paying substantially more per gallon than you were in Tier I.”
Mr. Dunning argues the solution, “You simply charge each household, regardless of size, the exact same amount for each gallon of water used. We don’t care if there are 40 people in your household or four people in your household. We don’t care if you’re watering the lawn, filling your swimming pool or giving the kids a bath. It’s 10 cents a gallon (or whatever) for everyone. No exceptions, no questions asked.”
Sounds good, but given fixed costs, as we see in the chart above, there is no way to equalize the costs per gallon unless you go to a 100% variable system, which not only could they not get past the bond raters, but would not work well because there are costs to the system that exist even if you don’t use any water.
The way that council could have dealt with this problem would have been simply to raise the tier-break point to 18 ccf. That would allow people to address their indoor needs and push for conservation in terms of outdoor usage.
The key here is to set up a system that does not end up punishing the people hardly using any water, and BW in five years would have done exactly that.
Mr. Dunning takes some umbrage at the notion that “low water user” and “low income” should not be used interchangeably.
He has a point here, but takes it a step too far when he writes, “While there are exceptions to every rule, in general, most ‘low water users’ come from smaller households and most water users in higher categories come from larger households … there are, without a doubt, some low-income people in both categories of water use and some in between, based almost always on household size …”
He adds, “While there are indeed low-income individuals in Davis, unfortunately, most of those people are not homeowners, and thus not ‘ratepayers’ in the Proposition 218 definition of the term …”
The problem is that there are really two variables that determine water use. Size of the family is one determination, where a family of four would use about 10 ccf of indoor water and a family of eight perhaps 18 ccf.
But the bigger variable is not number of people, but outdoor usage. So our neighbors have a huge house across the street, but only two people living there. We have a small house for a family of five. Who uses more water? It’s not going to be particularly close, and it will be our neighbors.
If you look at the people using just 5 ccf a month, which is ten percent of water users, you are likely looking at seniors on fixed income, not wealthy people who can afford to have large gardens in their large yards.
The bottom line is that I would like to see the data there that illustrates the point that low income or fixed income individuals are not the users that coincide with the low water usage. But even if they are not, why would we create a system that would charge someone who barely uses any water so much more per gallon than people who use tons of it?
As a final point, Mr. Dunning writes, “That $113 million is a fixed cost and someone will have to pay the bill. If our water usage drops to half the projected consumption, the city will have no choice but to double our rates.”
He is not correct here. The system assumes about a 25% conservation rate within the formula, which is somewhat more aggressive than the plan that the Natural Resources Commission has worked on.
So, yes, our rates would go up if in fact our water usage drops below the projected consumption, but we have already planned on a 25% reduction in use to avoid that very problem.
In other words, most likely people’s efforts to conserve will be rewarded with lower bills.
—David M. Greenwald reporting
The project is too big, too soon, overlaps with paying for the sewer plant, and is too expensive. We can do a lot better. Look for our initiative that will set the standards for water and sewer plant process
The local economy is a mess, and why are they ramming this huge new expense down our throats while many downtown store fronts are vacant, city employees being cutback or pay reduced, and the schools are barely hanging on by a thread?
Also, I think the rates are not fair, appear way too high for just paying for the plant described (meaning, where is the pork going now?), and are probably unconstitutional.
Again, like she did on those Sept 6th rates, and then called our water rate referendum unconstitutional, our City Attorney is blessing this combo mess of a rate package?
“If you look at the people using just 5 ccf a month, which is ten percent of water users, you are likely looking at seniors on fixed income, not wealthy people who can afford to have large gardens in their large yards.”
There are some well off people in town with fixed incomes from UC pensions. I have a friend who complains the rates will hurt her financially but she has a UC pension, a big house with a sanitary sewer exempt septic system, drives a luxury car, millions in investments and gives more than she ever could spend on water to local charities. I guess she worries about being able to afford to fill her swimming pool.
When you look at the most outspoken opponents, with the exception of one Reverend, they are not a group that lives a spartan lifestyle. From that I conclude that their arguments about how the poor will be affected is more about them using any argument they can to kill a project they don’t want.
Just look at their Measure I rebuttal. It reads like a paranoid rant about housing values and school finance. Yet several of the people who signed on own multiple homes and have no children in the schools while others are anti-tax republicans living on state pensions. They are simply trying to scare people in a shameless exploitation of the poor for their no growth no tax philosophies. It is a shameless ends justifies the means argument and i hope the voters see through it.
toad, i think you are confliating issues here. the point david is trying to make is to examine a rate system that is most fair. you seem to be conflating that with arguments against the water systm in their entirety. two different issues.
Yeah, I was mulling over yesterday’s post but its still about water costs or their use in getting people to oppose any proposal. The problem with the fairness issue is that this gets too complex and demanding the perfect will be used to prevent the good.
The richest people I know are the tighest with their money. You don’t get $1,000,000 net worth by throwing away money on non-essentials.
This surface plant is not essential, right now, in today’s economy, and is not well planned or organized.
Vote for this plant, and you are voting to have to sleep with Woodland politicos for the next 30 years. Ugh!
Mr Harrington – I find your comments about Woodland “politicos” juvenile, uncalled for and undignified for a former elected official of this city. Make it clear why you object to partnering with Woodland based on the merits of the project.
If you are suggesting that the elected officials of Woodland are unethical or engage in corrupt behavior then say that and provide proof. Your continued denigration of elected officials, and, by extension the citizens of that city who voted them into office is repugnant. Please stop it unless you have clear accusations of wrongdoing to make against them. Your behavior is beyond the pale.
“The City, together with the University and the City of Woodland, should move forward as rapidly as possible to develop a supply of surface water from the Sacramento River” – UCD water experts George Tchobanoglous and Ed Schroeder
Robb: I stand by my comments. Look at what they have done to gut their Main Street stores. Check out their huge sprawl growth plans. Did you enjoy the 5 CC members coming down last December 6th and trashing Davis for wanting to take a time out? Do you want to constantly have to go beg some changes in the JPA structure from them if our CC wants to make changes?
Robb: you post comments over and over supporting the JPA water project. I know you want to “win,” but be careful whom you might have to sit on the bench with if you do win. I personally want nothing to do with Woodland and its self-induced water and sewer treatment plant woes, and I do not think it’s good for the residents of Davis if your friends win on March 5. That’s all.
And I dont need to trash you for your positions, and I have not attacked you personally, but the personal attacks on me don’t assist your side.
Hey Robb, you know you’ve struck home when you’re comment is received with such false indignation. Kuddos
Mike:[i] “Woodland and its self-induced water and sewer treatment plant woes…[/i]”
Another false assertion, repeated over and over without substance.
No on I rebuttal: “[i]We need to explore more cost-efficient solutions, such as a regional treatment plant..”[/i]
Mike Harrington: “[i]I personally want nothing to do with Woodland…”[/i]
So, your regional treatment plant is going to be with whom?
michael harrington: i am your key group if you hope to win. i voted for you twice, voted for sue several times, lamar, ken wagstaff, etc. however, if you insist on running an election by unsubstantiated potshot, like your woodland slight, then you end up losing someone like me. i could either way at this point, but those kinds of arguments are going to push me to the yes side. your choice.
MH
I do not believe that I have ever attacked you personally. I try to keep my comments based on behaviors and not personal characterization. However, I also find your repetitive attacks on Woodland’s elected officials very offensive.
My philosophy in general is one of promoting collaboration between individuals, groups and communities. I would favor a regional water solution over a piecemeal community by community approach.
Your comment about Woodland’s decisions with regard to their downtown demonstrate a difference of opinion over priorities from what I would prefer, but this is a difference in planning preferences and perhaps in my opinion errors in judgement on their part. It does not make our neighbors to the north corrupt or stupid which you seem to imply by turn depending on which characterization suits your mood.
I neither took pleasure in nor umbrage to the Woodland CC members coming to our CC meeting at which I was present. I did not feel that they were “trashing Davis” but rather asking for us to live up to an agreement that we had made. I saw absolutely nothing wrong with them making public comment. We have certainly never stopped folks who were not residents of Davis from speaking at public comment before that I am aware of and I feel they had every right to address the council as members of the public. The fact that you do not like their message does not mean that they did not have a right to express their point of view.
Michael – If my words hurt you I would humbly ask you to accept my apology. Please believe me when I say I did not intend to attack you personally nor to hurt you. I DID intend to vigorously protest your words. That was my intent but I apparently crossed the line and I am sincerely sorry.
Had you said something like: “I do not trust the politicians of Woodland because I feel their philosophy of growth is antithetical to what Davis wants. Further, I feel the way they have allowed their downtown to deteriorate speaks poorly of their leadership. For these reasons I strongly question the wisdom of partnering with them. Indeed, I feel it is risky to partner with them and I will strongly protest any attempt to do so.”
Had you said something like that I would not have written anything.
I have been a proponent of the water project (though not a very verbal one). I have come to that position based on hearing the arguments and concluding that for reasons of discharge compliance and future sustainable water supply that this is a good option for Davis. However, I am very eager to hear alternatives that will provide us with a sustainable water system and compliance on discharge. I genuinely AM open. Notice I said “alternatives”. I do not believe doing nothing is an option at this time. So, if you or anyone is able to provide an alternative that will provide these things I am ready and willing to listen. I mean that sincerely Michael.
I look forward to further dialogue and hope my apology will open the door in that direction.
“Woodland and its self-induced water and sewer treatment plant woes….”
I am not sure what this refers to, as the Woodland waste water treatment plant does an excellent job. We do have issues with some components that occur in our ground water, such as selenium, which will be addressed by the switch to surface water. Otherwise our discharge is of excellent quality, with most components well below the levels set in our permit.
“Woodland and its self-induced water and sewer treatment plant woes….”
Theirs and ours are equally self induced by the generation that let Solano County have all the water rights to Berryessa. The question remains will we make the same mistake twice? Apparently Woodland will not be doomed to repeat their failure of history.