Each year we have done something different to wrap up the previous year and move us into the new year. This year, instead of a full year in review, we decided to talk about a number of big issues from 2012 that have gone unresolved, headed in 2013.
We start with the issue that largely dominated the last month and a half of coverage, and that figures to dominate the first two months of 2013 as we move toward a March 5 election that is extremely compressed.
Last week, the Vanguard turned some heads when it called “The Switch in Time That Saved the Water Project.” The reference point, we thought, worked nicely, as a week prior the city council seemed so completely against the Loge-Williams rate structure that they refused even a modest substitute motion from Councilmember Brett Lee to allow the WAC at least to reconsider the CBFR (Consumption Based Fixed Rate) model.
It was with some great irony that the WAC, the body the Vanguard worried would rubber stamp the council on the water issue, actually went against the council’s instructions and voted 6-3 to continue support for Loge-Williams.
Why did the ultimate compromise, that allowed for a modified Bartle Wells in the first two years of the Prop 218 and then a shift to Loge-Williams for the last three, seem so critical?
The problem lies in the fact that 75% of the households use 18 ccf or less and, therefore, end up advantaged by CBFR. The most egregious inequity would have been at 5 ccf level – yes, it only impacts 10% of the rate users, but they would be tremendously disadvantaged by Bartle Wells, paying over $60 for almost no water – whereas they pay only 66% of that under CBFR.
The gap closes quickly – by 8 ccf (25% of households), the gap is still large but shrinks to $13. It closes to $5 at 12 ccf (50% of households) and at 18 ccf, the BW proposal has a slight advantage. But for 9000 households, about 23,000 voters, there is a clear advantage for CBFR.
We believe that the opposition to the surface water project easily would have been able to exploit this problem and that had the council left it in place, the voters would have voted it down heavily.
What we are not arguing is that the election is a certain victory for Measure I now. Nor is the Vanguard endorsing the project.
Mark Siegler, an economics Professor at Sacramento State University and a member of the WAC, is an opponent of the surface water project. When we met with the No on Measure I folks, he made the point that if he were really trying to game the system he could have voted to support Bartle Wells – indeed, the motion to support Bartle Wells failed by a 4-1-5 vote, where the yes side failed to gain the five votes necessary for passage.
Had Mark Siegler supported that motion, it would have passed and council would have received a recommendation to move forward on Bartle Wells. The problem that Mark Siegler had was that it would have imposed a system, if it were to pass, that would have imposed wholly unfair rates on the lowest end users.
He could not do that and, for much the same reason, while the Vanguard takes no stand on Measure I, the Vanguard believed it had to support CBFR as the most fair and equitable rate structure, regardless of whether or not one supports the water project.
With CBFR, the Vanguard believes this measure is a toss-up. CBFR fixes some of the fairness issues, but there are still big issues that remain. The first is that the city really did itself no favors running Measure I, which votes on the project concurrent with the Prop 218 process for water rates.
The problem, as we noted last week, is that the city originally set this process in motion on December 6, following a successful petition drive to put the rates on the ballot.
Language signed by the petitioners was: “We hereby protest the adoption of Ordinance Number 2381, adopted by the City Council on September 20, 2011 (attested on September 22, 2011) and request that Ordinance Number 2381 be reconsidered and repealed by the City Council or that it be submitted to a vote of the People of the City of Davis at the next regular election or at a special election called for that purpose pursuant to Cal. Elec. Code section 9241.”
Ordinance No. 2381 amended Chapter 39 of the Davis Municipal Code Related to Water Rate to increase the Base Rates and metered Rates. It was introduced on September 6, 2011 and adopted on September 20, 2011.
What is clear here is that the intent of the petitioners was to put the rates themselves to a vote, because they deemed the Prop 218 process, which only permits property owners and counts non-votes as supporting votes, to be flawed. By simply putting the matter of the project on the ballot, with a separate Prop 218 process for the water rates, the intent of the signers of that referendum is negated.
The fact is that, even if Measure I fails, the rates could be enforced. The city’s response is basically a trust-me argument.
“Staff will be working on laying out what those costs will be should Measure I fail, in addition to laying out other additional costs and fines related to discharge permit issues,” Councilmember Rochelle Swanson told the Vanguard. “I would anticipate we would be assessing rates in relation to the well system. I believe it is imperative that the City be transparent and clear that we now must raise rates to even maintain basic infrastructure.”
City Manager Steve Pinkerton points out, “We face significant expenses whether we do the water project or not.”
“You first have the notice and the notice has max rates,” Mr. Pinkerton told the Vanguard. “Once the council meets post-March 5 election, they’ll actually be setting new max rates. Those max rates will either be based on a project with the surface water project or without. The max rates will be significantly lower than the max rates that were in the Prop 218 notice.”
“Our recommendation for the ultimate max rates will be based on what happens with the ballot measure,” he continued.
“It’s like anything in the political process, you can send out a new Prop 218 notice every six weeks if you’d like and make a moving target,” he said. “But I think that’s why you spend all of this money doing due diligence. All you can do is minimize the chance that that would happen. There are no guarantees in life.”
Then there will be those who argue that the JPA structure itself is the problem and will undermine the city’s autonomy.
“This whole JPA structure, we lose a piece of our city’s governance and our democracy that the people in Davis are used to by going with a JPA process that was set up years ago by Don Saylor and Steve Souza,” Michael Harrington told the Vanguard during a recent interview. “It’s a double layer of extra bureaucracy. It’s expensive. It makes no sense and the people of Davis are not going to be controlling their own water supply. It’s going to be controlled partly by the Woodland City Council if you can believe that.”
Proponents of the ballot measure will counter that the JPA structure gives Davis the chance for ownership of its water capacity, that the city needs to draw on a safe and reliable supply of water and that this provides the best and cheapest opportunity to do so.
Moreover, Davis faces, down the line, similar compliance issues to the ones that Woodland is already paying fines on.
Still, any project that seeks anywhere from 2.1 times to 2.8 times the current rate over the next five years is no cinch.
Proponents will argue that prices will go up regardless of whether we do a project, but in the short term, those cost increases may be at 62% rather than 112% to 181% increases.
The compressed timeline of the election makes for some interesting factors. Essentially, for the remainder of this year until January 2, perhaps even January 7 when school re-starts, the public is going to be focused on the holidays and family.
Bob Dunning, the Davis Enterprise columnist, published 15 columns since November 13 on water – until the last one, each one was heavily spun to the negative. Finally, in his last column following the compromise, he praised the council for finding a more equitable solution.
He has already framed the issues, and the proponents of the project have barely gotten organized. They will have less than a month from January 7 until the vote by mail ballots reach people’s homes.
A lot of work remains – the public needs to be educated on the issue and convinced this is the best and, in the long run, cheapest solution to water problems. By nature, that is a tough sell that moves outside of the ability to run a campaign by 10-second sound bites.
So, despite our column arguing that the water project has been saved, the fact remains that it could go either way now, and that the only difference with CBFR as the rate structure is that the measure will not be meeting certain doom.
—David M. Greenwald reporting
However, small users need to pay for access to the “big” system. There are economies of scale: Eg, it is cheaper to meter-read, calculate and send one bill to the DAC than to do so for 25 households, which combined, use the same amount of water as the Club.
Or, consider trenching, buying and installing a 6 inch vs a 12 inch pipe to Woodland or West Sac. The latter carries four times the water, but does not cost four times as much to install!
If there are no fixed cost charges, the large users are subsidizing the small ones. There seems to be a notion that small users subsidize large, which are the schools, parks, playfields, etc. Rather, the small user benefits by paying a smaller cost per gallon due to economies of scale in the system. Therefore he or she should pay a reasonable fixed charge/meter charge, etc. for access to this cheaper water. It also follows that inclining rates are unfair to large users.
“What is clear here is that the intent of the petitioners was to put the rates themselves to a vote, because they deemed the Prop 218 process, which only permits property owners and counts non-votes as supporting votes, to be flawed. By simply putting the matter of the project on the ballot, with a separate Prop 218 process for the water rates, the intent of the signers of that referendum is negated.” –David Greenwald
This argument is entirely without rational foundation. All voters know that the surface water project comes with a very large price tag which will be financed through substantial rate increases. If voters don’t want to pay for or finance the project, vote the project down. All this process mumbo jumbo is a distraction from the key go/no go decision. That said, the rates are going to go up substantially regardless because the present rate structure doesn’t even sustain the existing water supply system.
David’s argument is akin to a married couple squabbling over the trim color on their next house when they haven’t even decided yet whether to move to a new house. The decision to move comes sequentially before the trim color decision. What makes the argument even more empty is the couple has been forced to move because their current house is being condemned (i.e. their current circumstance is not sustainable). One way or the other, they have to move. And this is what makes David’s arguments specious.
And to go on to complain that the council is going to raise water rates to pay for failing well replacement should the surface water project be voted down really leaves me scratching my head. David, are you suggesting the council not replace the failing wells or are you suggesting they replace the failing wells but not pay for the replacement?
-Michael Bisch
Michael:
First, “All voters know that the surface water project comes with a very large price tag which will be financed through substantial rate increases. If voters don’t want to pay for or finance the project, vote the project down.”
The way the system is set up, the voters can vote it down and still be stuck with the price tag.
Now, the second part is correctly stated – the rates go up regardless. But they go up 62% rather than 180%.
“David, are you suggesting the council not replace the failing wells or are you suggesting they replace the failing wells but not pay for the replacement?”
Not at all. I’m just suggesting that they run the surface water project and Prop 218 notices together and then come back for a separate Prop 218 with appropriate rate increase if the project fails.
“But they go up 62% rather than 180%” -D. Greenwald
That’s not correct. The rates only increase 62% if all other variables remain constant. The minute other variables change, the rates go up further. For instance, rates go up further when regulatory fines are incurred beginning in 2016.
You’re advocating for a process that would require a 2nd Prop 218 notice in the event of a Measure I failure? Why settle for doing it once when we can do it twice? That seems like an absurd waste of scarce resources and I don’t support it at all.
-Michael Bisch