Bob Dunning is full of irony himself this morning when he leads his column, without a great sense of irony it seems, with the words: “Now they’re getting personal.”
This is a columnist who has made a career of getting personal, of lampooning and skewering political figureheads in this community – sometimes with humor, but just as often with humor masking true venom.
The truth is that this has always been personal for Bob Dunning. He has led the opposition against the water project and CBFR because he sees himself, in his rather unusual situation, as being heavily disadvantaged by the project in a very personal way.
The truth is that, while the water rates are going to go up for everyone, no matter what, CBFR actually provides a much more fair and equitable rate structure than a traditional rate structure like the one we have now, so that the lower-end users would subsidize the higher-end users to a far lesser degree.
The Measure I opponents are certainly feeling more confident than they were a few weeks ago. But even if they are successful at thwarting the water project, I do not see this as a sea-changing election.
Michael Harrington sees it differently from me. He wrote last night to a large group of people and reporters, “I think this election has more significance for Davis as any since the Kopper/Black election while they were in law school.”
In another email, a member of the No on I team said, “There is a new generation of progressives arising here, and there is going to be some real shuffling.”
I do not see it that way. For one thing, it is hard to see the progressivism here. After all, you have John Munn, the local leader of Yolo County Taxpayers Association, as one of the leaders of the No on I effort. It is his name who has been part of the lawsuit against the city.
You have Michael Harrington citing the work of Tim Biddle, who is a chief counsel for the California Taxpayer’s Association. This is not a progressive effort, if you ask me.
Bill Kopper and Bob Black were young activists in the early 1970s and helped transform Davis from the agricultural and conservative community that it had been to the progressive and cutting edge community it would become.
There has been a transformation in Davis politics in the last four years. The council has gotten considerably younger, with Joe Krovoza, who just turned 50 on February 3, being the eldest statesperson.
The June 2012 election saw Brett Lee elected at the age of 46, while Dan Wolk and Lucas Frerichs are each in their 30s. While these are not the granola-clad activists of 40 years ago, they do mark a change and they are true liberals.
Davis is no longer the progressive community it was in the 1970s, but it is actually more diverse and just as liberal. 85% of the voters in Davis voted to re-elect Barack Obama.
But what we see in the water election is something that really cuts across lines. John Munn joining with the more liberal Michael Harrington or Sue Greenwald seems to be the odd couple, and having Bob Dunning be the most vocal voice of the opposition is even odder.
It is hard to argue that Bob Dunning is leading a progressive renewal when he has, as often as not, skewered progressives in this town, none perhaps more so than the late Julie Partansky.
And, in fact, he is not a progressive. His opposition is not based on some deep-seated philosophy, but rather on personal finances.
This project hurts him financially, or so he believes. He has been offered a factual analysis of the actual water use, but he has consistently refused to accept it, over and over again. He prefers to believe himself rather than check the facts.
Mr. Dunning argues against a system where people pay differential amounts per gallon, while at the same time failing to note that, in fact, the current system does the same thing, except far worse. Even under CBFR, the lower-end users pay more per gallon than the upper-end users. However, that gap is greatly closed.
Davis Enterprise columnist Bob Dunning enjoys a very unique distinction. He has columns in each of the newspaper’s five print editions a week.
That gives him a tremendous amount of influence in our city’s processes. As one of his defenders noted to me once, and I think correctly, on most issues Bob Dunning is largely indifferent. He may jump into an issue to note some things, but at the end of the day, he doesn’t really care.
But there are a few issues where he cares a whole lot. Water is clearly one of them. Just this month, Bob Dunning has 11 columns devoted in full or in part to the issue of water. All of them are negative.
It has gotten to the point where people are starting to look into whether election laws are actually being violated by dint of fact that a columnist is actively campaigning against the water project. Rush Limbaugh seems to prove that extreme bias is allowed by the First Amendment, so Bob probably is Davis’ 2012-2013 version of Rush.
In their column, “Delivering water, or carrying it?” Frank Loge and Matt Williams, who on their own time helped the city develop an innovative and much more fair system than the alternatives, strike back against the repeated barrage by Mr. Dunning.
In their conclusion they write: “We worked hard to put forward the fairest, most proportional rate structure we could, and we think we’ve done right by Davis. It pains us to see our work smeared in sleazy political gamesmanship.”
They add: “It’s beneath The Enterprise’s dignity and mission to allow itself to be used this way.”
Indeed, while the Davis Enterprise newspaper purports to be fair and balanced, and in fact even endorsed Measure I, all of that fairness is drowned out by the never-ending drumbeat of five columns a week – which now matches completely the five print editions of the Davis Enterprise.
Of course the truth is that Editor and Assistant Publisher Debbie Davis has a near impossible task, but it is a task that is of her paper’s own creation. On the one hand, this is clearly a problem for the credibility of their newspaper with a campaigning columnist. On the other hand, Bob Dunning has in many ways become the paper’s only cash cow, and in attempting to rein him in they risk more than they are willing to risk.
Suggestions have come in from the No on Measure I campaign that the paper is secretly a No on Measure I supporter. That suggestion stems not only from the barrage of Bob Dunning columns, but also from articles reminding people that the city cannot be trusted.
In essence, the Yes on Measure I endorsement was an effort to balance the scales. But the newspaper’s heart might not have really been in that endorsement – note the heavily-qualified nature of that endorsement when compared to that of the Sacramento Bee. They even repeated the charge that the city does not pay for its own water.
—David M. Greenwald reporting
[quote]I don’t see a No on Measure I victor as a victory for progressive Davis.[/quote]
I would take this further. Since no viable alternative has been put forward as an option, I don’t see a “No on Measure I vote” as a victory for anyone in Davis who actually cares about the future of this community beyond their limited time within it.
Its simply a bad project so people don’t want it
Our Initiative for Larger Public Utilities Projects will dictate the planning and voter approval process from here on out
Never again will the public allow the city to run amok with these projects and our rate money
[quote]dictate the planning and voter approval process from here on out [/quote]
I am very reassured by your dedication to the democratic process.
Medwoman glad we agree
If you like Measure J/R you will love the Utilities Initiative
The Yolo Ratepayers for Affordable Public Utility Services will serve as the public educational tool and the watchdog
The City and its army of paid consultants cannot be trusted any longer
Michael
[quote]will serve as the public educational tool and the watchdog
[/quote]
[quote]will dictate the planning and voter approval process from here on out [/quote]
As far as trust goes Michael, I think your proposal to “dictate” is likely much more reliable based on your tactics to date, than is your proposal to “serve”.
I correspond frequently with Bob via email and have gotten to know his private side a bit and he’s just a regular salt-of-the-earth type guy. Maybe he gets a bit carried away sometimes with his columns under the pressure of having to fill up all those column inches. Gotta give him props, though, for some incredible humor from time to time.
For those who read Bob’s column . . .
The Supply Charge is not a variable charge.
The Supply Charge produces fixed revenue to cover fixed costs.
The Supply Charge is a volumetric charge.
The Variable Use Charge is not a fixed charge
The Variable Use Charge produces variable revenue to cover variable costs
The Variable Use Charge is a volumetric charge
The Distribution Charge is not a variable charge
The Distribution Charge produces fixed revenue to cover fixed costs.
The Distribution Charge is not a volumetric charge.
I cannot help but wonder why, if Bob Dunning, after all this time, really has questions about the rationale for any portion of the CBFR, he would chose to address said question to the 5 members of the City Council instead of to Matt Williams who co authored the proposal and has made numerous explanations of the rationale behind the rates.
Could it perhaps be that he is not seeking answers or clarity, but is merely using his column once again to stir up unfounded feelings of “unfairness” which ultimately only boil down to ” I don’t want to pay more”.
medwoman, maybe Freddie Oakley has a sense of humor. After all she is the one who chose the letter designation for this Measure.
Thanks for the humor Matt.
I could do with it this morning to curb my mounting frustration and uncharacteristically harsh posts.
As usually I cannot read the column on Enterprise.
Re: Medwoman
[quote]I cannot help but wonder why, if Bob Dunning, after all this time, really has questions about the rationale for any portion of the CBFR, he would chose to address said question to the 5 members of the City Council instead of to Matt Williams who co authored the proposal and has made numerous explanations of the rationale behind the rates. [/quote]
I do not know what Bob did. I had been discussing with Matt directly, and my impression is that Matt is either rigid in his thinking, or being dogmatic about CBFR. Matt only expresses what he thinks, and does not listen to what others say. When Matt misunderstands others, he does not acknowledge or correct himself. There is a communication obstacle with Matt. He uses strawman arguments against others.
[The meaning of Proportional Rates] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6112:let-our-legacy-be-clean-water&catid=50:elections&Itemid=83&cpage=30#comment-176326[/url])
[url=http://skylet.net/docs/2013-02-14-2203-FairnessComparison.htm][The correct argument on why Proportion Rates would suck (and why CBFR is better than Proportional Rates, but still has problems)]
Edgar, I have engaged every thought you have put forward. I have responded to each and every one of your ideas. I have posed questions back to you that you have not responded to as yet. Life is full of tradeoffs and the theoretical “loopholes” (your word) you have identified lose their theoretical gravitas when they are applied to the real life situation we have in Davis. With that said, some of your proposed solutions would work perfectly in a light irrigation city like Chicago.
So here are the responses of mine that you have not responded to. The unanswered questions are highlighted in [b]bold[/b].
— You say, [i]”your notion of fairness is either non-existent or incorrect.”[/i] No my notion of fairness is to have the cost incurrance decision be the parent and the payment methodology be the child. You are making the payment methodology the parent, who then complains to the cost incurrance methodology that it is building too large a plant and incurring too many costs when the design uses a capacity modeling approach that is in harmony with the payment methodology. [b]Is harmony between the cost incurrance decision and the cost defrayment decision unimportant to you? [/b]
— You say, [i]”As you have described, your conclusion was based on observing the marginal cost, and assigning the cost to the entity that caused the marginal increase. This method of assigning responsibility does not guarantee a fair distribution of the cost.”[/i] No, it guarantees that you don’t incur unnecessary cost by designing a system that has more capacity than the customers need. If we follow your methodology we will design and build a plant that has 7 units of capacity when we only need 5, and as a result the community will incur 7 units of construction cost when all we really need to spend is 5 units of construction costs. [b]Why do you want to spend those unnecessary 2 units of the community’s limited fiscal resources?[/b]
— Edgar, this is all about reality. It is all about California. It is all about Proposition 218 and California Constitution Articles X and XIII . Otherwise it is simply an idealistic theoretical discussion that has no practical application to the situation we are in. The laws are the laws. No amount of discussion will change them. They are the fences within which we must operate. [b]What is the point of having laws if you can not use them?[/b] If you want to have a discussion about whether the laws make sense or not, that is a wholly different kind of discussion. The timeline we currently have for our Prop 218 Notice and Measure I do not afford us the luxury to talk about theory. I now understand why we have been talking past one another. You are embracing a much broader and more theoretical picture than I am.
— You say, [i]”In our discussion, the concept of excess capacity is only relevant to the billing policy where the City will pay for the excess.”[/i] [b]Why do you have the City paying for anything other than their contribution to overall system load from City owned facilities? [/b]The City is protected under the provisions of Proposition 218 just the same way that any individual customer is. Further, as noted above, during periods of excess capacity the only costs that are being incurred are the variable costs of use, and those variable costs of use are being 100% covered by the Variable Use Charge revenue.
— Looking at the excess capacity numbers you calculated, I have two questions, 1) [b]What is the market value of that excess capacity from period to period?[/b] 2) [b]Why do you call that excess capacity “waste”?[/b] I think of waste as inventory that is produced but never used. In a water plant during off peak conditions, no treated water is produced and no variable costs for producing that water are incurred. You may be defining waste in a different way than I am.
So those are a few of the questions that are unanswered. If you have some that I have not answered please post them here and I will do my level best to answer them for you.
Progressive?? — What’s progressive about building a huge monstrosity of a water plant, having it controlled by a private for-profit corporation,
increasing water costs on working people, expanding our water system instead of reasonably conserving water usage by the city and in the city,
setting the city up for big new housing developments, including urban sprawl, lowering existing housing values due to the high utilities costs, and lowering housing values by the threat of over-building in order to support the water plant? And what effect will more development have on our lovely downtown?
[Re] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83#comment-176510[/url])
Context: I said that Matt did not understand the discussion points. Matt said that I did not answer Matt’s questions. Matt specifies 5 questions he wanted Matt to answer.
My Intention: Answer Matt’s questions. I don’t have an intention to repose the questions that Matt did not answer, or to pose questions raised by his reply because I feel that it is a waste of my time to repose them unless Matt confirms that I have answered his questions.
[b]Q1:[/b]
[quote]– You say, [i]”your notion of fairness is either non-existent or incorrect.”[/i] No my notion of fairness is to have the cost incurrance decision be the parent and the payment methodology be the child. You are making the payment methodology the parent, who then complains to the cost incurrance methodology that it is building too large a plant and incurring too many costs when the design uses a capacity modeling approach that is in harmony with the payment methodology. [b]Is harmony between the cost incurrance decision and the cost defrayment decision unimportant to you?[/b][/quote]
This is a strawman argument, or a misunderstanding of my argument. In my comparison of the fairness of the various rate structures here ([url]http://skylet.net/docs/2013-02-14-2203-FairnessComparison.htm[/url]), the same maximum capacity is used by all methods. In my analysis, the amount of excess capacity is shown and paid for by the respective billing method. All of the numbers on that table are made under the assumption that the consultants and the city are not accountable for excessive cost. Within that assumption, I showed why CBFR is unfair.
[b]Q2:[/b]
[quote]– You say, [i]”As you have described, your conclusion was based on observing the marginal cost, and assigning the cost to the entity that caused the marginal increase. This method of assigning responsibility does not guarantee a fair distribution of the cost.”[/i] No, it guarantees that you don’t incur unnecessary cost by designing a system that has more capacity than the customers need. If we follow your methodology we will design and build a plant that has 7 units of capacity when we only need 5, and as a result the community will incur 7 units of construction cost when all we really need to spend is 5 units of construction costs. [b]Why do you want to spend those unnecessary 2 units of the community’s limited fiscal resources?[/b][/quote]
This is a strawman argument and incorrect understanding of Equal Discount. I had already explained it here ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6112:let-our-legacy-be-clean-water&catid=50:elections&Itemid=83&cpage=30#comment-176329[/url]). My method does not result is excess capacity being designed. Also refer to this table ([url]http://skylet.net/docs/2013-02-14-2203-FairnessComparison.htm[/url]), all of the scenarios are done using the same capacity (or 100) and cost (of $1000). The only difference between each scenario is the water usage pattern. Matt’s conclusion that the bill rate would somehow retro-actively affect the size of the plant is incorrect.
[b]Q3:[/b]
[quote]– Edgar, this is all about reality. It is all about California. It is all about Proposition 218 and California Constitution Articles X and XIII . Otherwise it is simply an idealistic theoretical discussion that has no practical application to the situation we are in. The laws are the laws. No amount of discussion will change them. They are the fences within which we must operate. [b]What is the point of having laws if you can not use them?[/b] If you want to have a discussion about whether the laws make sense or not, that is a wholly different kind of discussion. The timeline we currently have for our Prop 218 Notice and Measure I do not afford us the luxury to talk about theory. I now understand why we have been talking past one another. You are embracing a much broader and more theoretical picture than I am.[/quote]
This is a strawman argument because on my analysis here this table ([url]http://skylet.net/docs/2013-02-14-2203-FairnessComparison.htm[/url]), there is nothing about Equal Discount billing that is more “legal” or “illegal” than CBFR. To make this argument, Matt would need to clarify whether he intends to accuse Equal Discount method as illegal, and give a reason why such an accusation would not also apply to CBFR.
(cont.)
[b]Q4:[/b]
[quote]– You say, [i]”In our discussion, the concept of excess capacity is only relevant to the billing policy where the City will pay for the excess.”[/i] [b]Why do you have the City paying for anything other than their contribution to overall system load from City owned facilities? [/b]The City is protected under the provisions of Proposition 218 just the same way that any individual customer is. Further, as noted above, during periods of excess capacity the only costs that are being incurred are the variable costs of use, and those variable costs of use are being 100% covered by the Variable Use Charge revenue.[/quote]
The context of this question was only in our email exchange (between Matt and I). I was in the process of explaining accountability, to address the question: “If the City does not care about its people and allow the Consultants to build a plant that is too large (with too much excess capacity), who should be accountable?”
To me, this is an important accountability question. The solutions to this type of issue include:
1) Educate the public about water processing plants, so that every person may calculate the correct sizing for the city, the correct billing method that will be fair to all. In short, Educate the public so that everyone can be a valid consultant, so that everyone will know if the information they are presented is correct.
2) Define accountability so that if the public delegates to an agent to make a decision, the agent is accountable for the losses. This resolves the i”principal-agent” problem (wiki ([url]http://en.wikipedia.org/wiki/Principal–agent_problem[/url])) where an agent, who is empowered to make decision and spent money for the principal (in this case, the public people), from overcharging the principal to pay the agent himself.
In my discussion with Matt, he did not propose a solution to this accountability problem. His reply was that the people will pay for any excess. This is not a solution to the accountablity problem. This is the effect. But let’s call this option (3).
In my analysis in email, I first showed what would happen if the City (instead of the individual council member, or the consultants) assigns itself to be accountable for any excess. Then, I added the assumption that when a City is made to be accountable, since the City is not a person, and its money comes from the people, I investigated what would happen if the revenue to the City is equally contributed by each ratepayer. The result is similar to the result of using Equal Discount billing when the ratepayers pay for the excess.
With this insight, I continued my analysis with the assumption of option (3), where the public will simply swallow all excessive charges that may be hidden in the sizing or the inflatted fixed cost of the system. [b](Please note very carefully that this statement is not an accusation of the current Surface Water Project. I am simply explaining the assumptions made for the analysis.)[/b] The table shown here ([url]http://skylet.net/docs/2013-02-14-2203-FairnessComparison.htm[/url]) is based on option (3), where the public will pay for any excess.
(Cont.)
[b]Q5:[/b]
[quote]
— Looking at the excess capacity numbers you calculated, I have two questions, 1) [b]What is the market value of that excess capacity from period to period?[/b] 2) [b]Why do you call that excess capacity “waste”?[/b] I think of waste as inventory that is produced but never used. In a water plant during off peak conditions, no treated water is produced and no variable costs for producing that water are incurred. You may be defining waste in a different way than I am.[/quote]
These questions were in our email exchange. I was explaining the issue of accountability (same context as in Q4 above) and raised the question, “Who should pay for the excess capacity?” In the analysis, I referred to excess capacity as a form of waste. In subsequent emails, I stopped using the term “waste” because Matt and I don’t share the same meaning for that word. In the email, I explained the context of excess capacity:
[quote][b]On the meaning of Excess Capacity[/b]
We say that an object is excessive when it is more powerful than required. When a water plant can produce 100 units per month, but we only need 80. The water plant is excessive. For the following water use pattern:
o Winter: 40
o Summer: 50
A plant is not excessive when it can produce no more than 40 units in winter, and no more than 50 units in summer. When the plant produces at that exact level, we say that the plant is 100% utilized. Typically, a water plant is not 100% utilized because the same plant is used for winter and summer, so if the plant has a production capacity of 50 in the summer, its production capacity is still 50 in the winter. If that is the case, the utilization of the plant is 80% in the Winter. The unutilized production power is excess capacity.
There is no dogmatic reason to dictate that once a water plant is built, it should be utilized 100%. That could ecologically irresponsible.
There is also no dogmatic reason to build a plant to have exactly 100% utilization regardless of cost. Sometimes it is worth having excessive capacity to make the system cheaper.[/quote]
There could be a miscommunication between Matt and I. It might take a third person to sort out this miscommunication. When I read Matt’s question on “Market Value”, I do not understand the context of his question in our context of the water system.
I understand the Market Value in the following context:
[i]A car salesman sold you a car for $1000. The next day, you found that there is actually no situation where you would ever need that car. You hope that you could return it and get $1000 back as if you brought if from Walmart, but the salesman refuses to give you a refund, he says, “why do you want to get rid of it? It is worth $1000 dollars!” After hearing that, you go look for someone else who would buy it for $1000, you found none. You look for someone who would buy it for $100, you found none. You look for someone to buy it for $10; none. Finally, you found someone who would want it if [b]you pay him[/b] $100. At that point, you found that the market value of your car is -$100.[/i]
(cont.)
How does market value fit into the context of our water system?
[i]A salesman sold A and B access to a vacation home for $100 each. Each of them is allowed to use half of the home so that when it is summer when A and B would for sure be using the vacation home at the same time, there would be no conflict. A and B both think that it is a good deal. They are happy to see each other in the summer.
Now it is Janurary, and A got decided to write a book and want to go to somewhere quiet. A thought, “Ah! why don’t I go to the vacation home? No one will be there and I had already paid for it!” With that, A traveled to the vacation home. To his surprise, the vacation home was almost full with B and his friends.
A says, “You are using my half!”
B says, “Nope. We both paid for the peak use, which is in the summer. This is not summer, so it is first come first serve.”
A says, “But it is not fair!”
B says, “Well, what is the Market Value of the vacation home in the Janurary? Since it is not the summer where the peak is, the home is just going to be unoccupied. So it is free for everyone. The market value in January is $0, I don’t have to pay you a penny!”
A says, “But what should I do? I am here now and I need a place to stay.”
B says, “You can go buy a tent yourself and set it up in the yard.”
A says, “Why should I pay for the tent? You used my half of the home.”
B says, “No, no, no, no, your half belongs to no body in January. Before you come, everything is fine. You come and the home becomes overcrowded, so you are responsible for the tent to house yourself.”
A says, “But I am not going to carry the tent back with me.”
B says, “Of course you may leave it here.”
A says, “But when I am gone next month, will you be using the tent?”
B says, “Well, when you are gone, the tent will be come excess and has no market value. So it will be free to use by anyone.”
Now, A never studied economics, and couldn’t tell if what B said is correct. But something doesn’t feel right.
After the stay, A tells his coworker C about what happened.
C said, “Ethically, B owes you money. You can compute the fair split of the payments using Equal Discount method.”
A asks, “What about legally?”
C said, “I don’t know. The law is at best an attempt to implement ethics. Most likely, the law lags behind ethics. A person can do many things legally that are not ethical. So the law may not be able to help you. The only thing I can do to help you, is for you to understand Equal Discount, so that the [b]next time[/b] you sign a legal contract, you will know what terms [b]must[/b] be there to protect yourself, and how to split the costs so that the contract will be [b]fair for everyone[/b].”[/i]
So my answer is, I do not understand the context of market value, and how that would help us figure out if the people are paying fairly. Because I cannot fit that concept into the analysis of fairness, I proceeded with this the analysis without using the concept. I do not know if Matt would assert that in the scenario above, it is righteous for B to pay A nothing when A suddenly finds that there is no room for him in January.
Instead of my posing questions, I think we should confirm whether I answered your questions. If you don’t confirm, we run the risk of perpetually owing the other person answers.
[quote]It has gotten to the point where people are starting to look into whether election laws are actually being violated by dint of fact that a columnist is actively campaigning against the water project. Rush Limbaugh seems to prove that extreme bias is allowed by the First Amendment, so Bob probably is Davis’ 2012-2013 version of Rush.[/quote]
Wow!
I’ve rarely seen a clearer example of how people citing election laws are really interested in limiting free speech.
And relayed by someone who calls himself a journalist too!
The hypocrisy is simply breathtaking.
(Cont…) ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83#comment-176526[/url])
[i]A asks, “So, ethically, how much does B owe me?”
C says, “How much did you pay for the tent?”
A says, “$10.”
C says, “How many people were there in the house?”
A says, “10 people.”
C says, “How many people can your tend hold?”
A says, “1 person.”
C says, “According to what you’ve told me, the total cost to house 11 people is $210. B’s maximum use is everything, and your maximum use is half of the house. So individually, the sum of value you two get from the cooperation is B’s $210 plus your $100, which is $310. Since, together, you and B paid $210, the discount factor is 0.67. In Equal Discount, you and B will both get this same discount factor. Therefore, you are responsible for $68, B is responsible for $142. Since you have already paid $110, B owes you $42, and the decision on who would be in the tent should have been a random order rotation. Since you were in the tent when there were 11 people, B owes you 10 times being in the tent if the capacity maxes out.”
Matt Williams asked . . .
“Is harmony between the cost incurrance decision and the cost defrayment decision unimportant to you?”
Edgar Wai replied . . .
[i]This is a strawman argument, or a misunderstanding of my argument. In my comparison of the fairness of the various rate structures here, the same maximum capacity is used by all methods. In my analysis, the amount of excess capacity is shown and paid for by the respective billing method. All of the numbers on that table are made under the assumption that the consultants and the city are not accountable for excessive cost. Within that assumption, I showed why CBFR is unfair. [/i]
Edgar, it is neither a strawman nor a misunderstanding. It is a simple question that warrants a yes or no answer. To draw an analogy, if you have a company VISA card and the monthly statement comes in and says you incurred $100 in costs for the company, but when you receive your departmental budget from finance and the “payment” your business unit is charged is $120, do you think that is fair?
Bottom-line, from a cost incurred perspective there is no excess capacity. The system is built to meet peak demand and when operated it delivers enough water to match that peak demand. From a capital cost incurred perspective that is the end of the story. In all the off-peak periods, the only costs incurred are the variable costs of operation, electrical power for the pumps and water treatment chemicals.
Matt Williams asked . . .
Why do you want to spend those unnecessary 2 units of the community’s limited fiscal resources?
Edgar Wai responded . . .
[i]This is a strawman argument and incorrect understanding of Equal Discount. I had already explained it here. My method does not result is excess capacity being designed. Also refer to this table, all of the scenarios are done using the same capacity (or 100) and cost (of $1000). The only difference between each scenario is the water usage pattern. Matt’s conclusion that the bill rate would somehow retro-actively affect the size of the plant is incorrect. [/i]
Here too this is neither a strawman nor a incorrect understanding. What you are doing is conflating capital investment decisions with ongoing operational decisions.
Following the principle of alignment costs and payments are aligned. In your scenario you are mandating 7 units of payments, therefore there need to be 7 units of cost incurred. However, the peak demand numbers tell us that we only need a plant that has 5 units of cost built. Therefore building a plant with 7 units of cost means you have a plant that is overbuilt by 2 units of cost.
The only way that your model works is if you abandon the principle of cost and payment alignment, which gets us back to the VISA example in my previous post.
J.R.
[i]”Wow!
I’ve rarely seen a clearer example of how people citing election laws are really interested in limiting free speech.
And relayed by someone who calls himself a journalist too!
The hypocrisy is simply breathtaking.”[/i]
J.R., I think you are misreading David’s comment. Do you see anyone limiting Rush Limbaugh’s free speech? What I heard David saying is that the folks who are thinking that way are barking up the wrong tree.
Thinking about something does not make it so. Truth be known I myself wondered whether the No On I folks would have to list Bob as a contributor in kind on their next disclosure statement. Michael Harrington and I had a good laugh about that when we were talking in the No On I tent at the Farmers Market on Saturday.
Edgar Wai said . . .
[i]”This is a strawman argument because on my analysis here this table, there is nothing about Equal Discount billing that is more “legal” or “illegal” than CBFR. To make this argument, Matt would need to clarify whether he intends to accuse Equal Discount method as illegal, and give a reason why such an accusation would not also apply to CBFR. “[/i]
Edgar, I’m really good with spreadsheets, but I’m having a hard time wrapping my mind around your Equal Discount billing spreadsheet. Can you describe for us how your model works. With that description it may be easier to follow.
Matt Williams said . . .
[i]”There could be a miscommunication between Matt and I. It might take a third person to sort out this miscommunication. When I read Matt’s question on “Market Value”, I do not understand the context of his question in our context of the water system. “[/i]
Under the GAAP rules that apply to Enterprise Funds, which is what our water agency is, the agency can not receive more revenue than it has costs. The variable costs associated with a unit of water in the periods of excess capacity are the electrical power costs to pump that unit of water through the water system plus the chemical costs for the chemicals that are used to treat the water. Therefore the “market value” of excess capacity is equal to, but no more than those variable costs.
Therefore the “market value” of the water used and unused during the winter excess capacity periods is equal to, but no greater than the variable costs of producing the water that is sold during those periods.
Edgar Wai said . . .
[i]”So my answer is, I do not understand the context of market value, and how that would help us figure out if the people are paying fairly. Because I cannot fit that concept into the analysis of fairness, I proceeded with this the analysis without using the concept. I do not know if Matt would assert that in the scenario above, it is righteous for B to pay A nothing when A suddenly finds that there is no room for him in January.”[/i]
Given the example that you used, which is a free market example, I understand why you are taking the position that you are. However, water is not governed by the free market, but rather by the GAAP rules that apply to Enterprise Funds. Your example needs to be recast within the context and constraints of the GAAP rules for Enterprise Fund accounting.
Edgar Wai said . . .
[i]”Instead of my posing questions, I think we should confirm whether I answered your questions. If you don’t confirm, we run the risk of perpetually owing the other person answers.”[/i]
I hereby confirm that you have answered the questions I posed both in my e-mails to you and here in the Vanguard. I look forward to hearing the questions of yours that you believe I haven’t answered.
[i]”Mr. Dunning argues against a system where people pay differential amounts per gallon, while at the same time failing to note that, in fact, the current system does the same thing, except far worse. Even under CBFR, the lower-end users pay more per gallon than the upper-end users. However, that gap is greatly closed”.[/i]
I’m not as concerned about inequities between Davis water consumers, under a water import scenario, as I am about the inequity between Davis water consumers and our “partners” in Woodland who would pay 30% less per gallon than Davisites. I am also concerned about the inequity of U.C. Davis using the water in the deep aquifer under the City of Davis while having access to Solano Irrigation water, and completely withdrawing from the JPA. Basicly, U.C. gets to use the water that would obviate the need for the water import while contributing nothing to the process.
Everybody wins except Davis ratepayers.
Excellent point roger. Let’s drill down into it a bit with some questions.
1) There are 10 miles of treated water pipelines that take potable water from the outlet at the water treatment plant and deliver it to the respective cities. The mileage of the Davis portion of the pipes is 8 miles to the point where the pipeline joins Davis’ current local delivery system, and the Woodland portion is 2 miles to the point where the pipeline joins Woodland’s current local delivery system. The total treated water pipeline costs for the 10 miles are $31 million. How do you think that $31 million should be split between the cities?
2) Combined, there is an additional $31 million of adjustments to A) the existing local Davis delivery piping network needed to ensure that the surface water is effectively blended with well water to ensure that all customers get the same quality water, and B) the existing local Woodland delivery piping network needed to ensure that the surface water is effectively blended with well water to ensure that all customers get the same quality water How do you think those $31 million of local costs should be split between the cities?
3) The remaining $183 million of costs are the cost of producing potable water. How do you think those $183 million of local costs should be split between the cities?
Context: Matt posed five questions for me to answer. I answered them, and asked Matt to confirm if they were answered. Matt replied to all and confirmed that I had answered the questions. He wants me to ask a question. But at the same time, Matt still misunderstands Equal Discount.
My Intention: All of the problems are related to misunderstanding of Equal Discount. So I will just explain it.
[b]On how Equal Discount works[/b]
[img]http://skylet.net/docs/2013-02-17-1719-Screenshot.png[/img]
[(png)] ([url]http://skylet.net/docs/2013-02-17-1719-Screenshot.png[/url])
On this screenshot are two water usage patterns. Both usage patterns correspond to the same water plant design, with 100 unit of peak capacity, and costs $1000 for the construction. Both patterns use the variable Use Cost of $1/water. (The proposed CBFR also has distribution cost. For simplicity that is not included in this scenario.)
For both patterns, 100 units of capacity are used. For both patterns, less water is used.
In pattern 1, all three algorithms have the same result.
In pattern 2, Proportional billing and Equal Discount billing would produce the same result, but CBFR would produce a different result, where User A would pay $82 less, while User B and C would pay $27 and $55 more than the other two billing methods.
In the following, I explain how I think CBFR would compute the rates for User A in Pattern 2, followed by how Equal Discount would compute the rates for the same user.
CBFR:
To split the Fixed Cost ($1000, boxed in red) of the water plant, CBFR focuses on the proportion in the summer, which is a reasonable assumption.
Since the peak use is 100, A’s proportion during peak use is 10%. In CBFR, then A is responsible for 10% of the Fixed Cost. This gives A should pay $100 for the fixed cost.
The next part of the bill is the use cost. A used 30 units of water total. So his share of Use Cost is $30.
In Total, A pays $130.
Equal Discount:
To split the Fixed Cost, Equal Discount looks at the total value delivered to each user, and compare it to the actual cost. That comparison gives a discount factor that is applied to all.
If A were to build a water plant for his own use, he would have to build a plant with maximum capacity of 20. B would need one with max capacity of 30, and C would need one with max capacity of 60. If they never shared their excess capacity in winter, together they will need a plant with capacity of 110. But in reality, they are cooperating and only need a plant of 100. If everyone gets the same discount of the downsizing from 110 to 100, the split of the fixed cost is:
A: 20/110, B:30/110, C:60/110.
So A would pay $1000 x 20/110 = $182 for the Fixed Cost. For the Use Cost, it is still $30.
In Total, A pays $212.
By doing this for B and C, we get the comparison. CBFR results are boxed in blue. Equal Discount results are boxed in green.
The yellow box with $1165 three times, shows that for all three methods, the revenue needed by the water agency (boxed in orange) is collected. None of the methods would collect extra money. The only difference between them is the split.
[b]Q: Do you agree that my interpretation of CBFR for this scenario is correct?[/b]
According to my hypothetical dialogs above, A might think that CBFR is fair, on the ground that he only used 10 in the summer and makes good use of excess capacity in winter. B and C would argue that Equal Discount is fair, because A got a discount of 50% for cooperating, but B and C did not.
In the context of [b]Davis[/b], the majority of the users are B and C, who use more water in the summer. Equal Discount let the majority pay less [i]if[/i] there is anyone who uses more water in the winter.
If everyone uses more water in the summer, then the result of CBFR and Equal Discount would be identical. Because of this, [b]Equal Discount fixes a loophole CBFR has[/b]. Equal Discount is fair regardless what pattern the people use. There is no room to cheat.
Since Equal Discount and CBFR are identical with everyone uses more water in the summer. The legality issues all have to focus on the difference [b]when[/b] someone uses more water in the winter.
[b]Q: What specifics about Equal Discount that makes it less legal than CBFR when someone uses more water in the winter?[/b]
Sorry, I edited out the “hypothetical dialog”. It was this:
(In the context of who should get the saving of $100 when the design of the plant is downsized from $1100 to $1000…)
A says, “I should get that $100 because I make good use of winter water. Without me, no one will save anything.”
B says, “If you are going to pay just $100, why do we want you at all? C and I will still be paying $300 and $600. There is no saving for us for having you.”
(Then this text follows:-)
According to my hypothetical dialogs above, A might think that CBFR is fair, on the ground that he only used 10 in the summer and makes good use of excess capacity in winter. B and C would argue that Equal Discount is fair, because A got a discount of 50% for cooperating, but B and C did not.
Edgar, here is an adjustment to what you wrote. CBFR doen’t focus on any one season. It focuses on the best proxy for how and why the capital costs for supply infrastructure are incurred. That proxy will vary from water agency to water agency.
CBFR:
To split the Fixed Cost ($1000, boxed in red) of the water plant, CBFR focuses on the engineering design process which drove the decision to incur costs. The costs are allocated to individual users based on their individual peak load contributions to the aggregate peak load for which the engineers designed the system. All construction costs are allocated to customers before any variable costs of operation are considered.
The variable costs of operation are then allocated to each and every gallon of use in each monthly period. Every customer pays the exact same dollar amount per gallon used.
Edgar, one of the principles of cost accounting is that you allocate each category of costs fully before you move on to the next category of costs.
The decision to incur costs harmonizes with the decision to defray costs. Is harmony between the cost incurrance decision and the cost defrayment decision unimportant to you?
Re: Matt:
How do you justify that CBFR is best or even fair? You only described what you did. You didn’t justify anything. All you said was, “This is my train of thought and this is what I get.”
I wrote the following earlier but did not post. I thought we would be over with strawman arguments.
[b]Definition of a Strawman Argument[/b]
A speaker (A) makes a Strawman Argument against another speaker (B) when A accuses B of doing something that B does not believe. A Strawman Argument can be a result of an unintentional misunderstanding, or an intentional tactic to make the other speak appear illogical. In either case, a Strawman Argument poses a fake conflict and is a threat to communication.
In the context of conflict resolution, the resolution methods in order of escalating intuisiveness are:
1. Ignore and wait for the other speaker to realize that they made a strawman argument.
2. Inform the other speaker that they made a strawman argument
3. Proceed with the action
At this moment, I had already done (2) once. This explanation is my doing (2) again. For me, there is no further action needed other than replying to Matt, and protecting those who are accused for not speaking with Matt.
I have spoken to Matt. Matt does not understand arguments. Matt cannot be communicated with. The diligence is already done. This is the proof that I had done this but he could not understand. This does not mean that others should not try.
[b]Re: Q1[/b] [Re] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83#comment-176530[/url])
[quote]Matt Williams asked . . .
“Is harmony between the cost incurrance decision and the cost defrayment decision unimportant to you?”
Edgar Wai replied . . .
[i]This is a strawman argument, or a misunderstanding of my argument. In my comparison of the fairness of the various rate structures here, the same maximum capacity is used by all methods. In my analysis, the amount of excess capacity is shown and paid for by the respective billing method. All of the numbers on that table are made under the assumption that the consultants and the city are not accountable for excessive cost. Within that assumption, I showed why CBFR is unfair. [/i]
Edgar, it is neither a strawman nor a misunderstanding. It is a simple question that warrants a yes or no answer. To draw an analogy, if you have a company VISA card and the monthly statement comes in and says you incurred $100 in costs for the company, but when you receive your departmental budget from finance and the “payment” your business unit is charged is $120, do you think that is fair?[/quote]
For the question: [i]”Is harmony between the cost incurrance decision and the cost defrayment decision unimportant to you?”[/i], it cannot be answered by a simple Yes of No, because their meaning of can be misinterpreted.
In this case, Yes and No could have these meanings:
[1]: “Yes it is important. People should pay for the incremental cost to the system. For example, if the current system cost is $10, and someone wants to do something that will cost an addition of $10 to the system, that person should pay for the additional $10.”
[2]: “Yes it is important. People should pay for the incremental cost to the system. For example, if the current system cost is $10, and someone wants to do something that will cost an addition of $10 to the system, we need to compute the benefit of that addition to the current people, and calculate how much each of them should pay for the incremental increase in cost.”
[3]: “No, it is not important. Everytime a new cost is added to the system, we simply analyze the whole system and see who is responsible for what and calculate the split. It is incorrect to assume that the immediate actor leading to the increase in cost is solely responsible for the cost. Casuality runs [b]deeper[/b] than that single moment.”
[4]: “No, it is not important. We should just sum it up and divided it equally for everyone. Everyone should pay the same amount for that incremental increase, regardless who is causing the increase.”
If I had answered a simple Yes or No, the meaning would be up to the interpretation of the reader. The question cannot be answered without the elaboration behind the label, and also connecting the words to the actual algorithm. According to Equal Discount, the answer could be [3] or [4]. But many other algorithms could also claim to follow [3] or [4], because the meaning of the answer is not specific unless the [b]Algorithm[/b] is specified.
The analogy with VISA card is a strawman argument because according to the table ([url]http://skylet.net/docs/2013-02-14-2203-FairnessComparison.htm[/url]) I have been showing, there is no excess payment being made.
Re:
[b]Questions regarding hourly peak[/b]
I heard from one of the night meetings that when Smart Meters are installed, the users can get hourly information of their water use.
I also heard that while our water rights do not allow seasonal storage of water, “operational storage” is allowed.
When we size our need to be 12mgd (mega gallon per day), does it also mean 0.5 mega gallon per hour? What is the size of the operational storage that can be deleted without having the water drop below required pressure?
I am trying to see what would happen to the split of capital cost when the Smart Meters are installed and hourly usage data becomes available. Depending on how much storage capacity there is, we can dismiss whether hourly usage is a stressor to the system.
If the system can store 1 full day of use, then hourly usage doesn’t matter, but peak daily usage matters.
If the system can store 1 full week of use, then daily usage doesn’t matter, but weekly usage matters.
Equal Discount algorithm can be scaled to handle hourly peak if it matters, and the data is available.
In the current proposal, is there a plan to adapt to using daily or hourly data to compute the split of the fixed cost?
If the size of the plant is determined by peak hourly use, I think we will find that the split of the cost will become quite evenly distributed. It is hard to ask people to store water for the whole summer to cut the cost of water bill. But asking them to store water for a day, or even just for a few hours seems very doable.
Either that or have the city assign a lawn watering schedule, so that the use of water are not “competitive” but “cooperative”. When people are coordinated together they can save a lot of resources.
So, now I’m amused… for all of the folks who think that every gallon of water, and/or every gallon of gas should be paid at the same unit cost, I hope and trust that you protest at [u][i][b]EVERY[/b][/i][/u] PUC hearings, since both your home electricity and natural gas rates are “tiered”. Duh. If you don’t protest those at every opportunity, why not?
Edgar Wai said . . .
[i]For the question: “Is harmony between the cost incurrance decision and the cost defrayment decision unimportant to you?”, it cannot be answered by a simple Yes of No, because their meaning of can be misinterpreted.
In this case, Yes and No could have these meanings:
[1]: “Yes it is important. People should pay for the incremental cost to the system. For example, if the current system cost is $10, and someone wants to do something that will cost an addition of $10 to the system, that person should pay for the additional $10.”
[2]: “Yes it is important. People should pay for the incremental cost to the system. For example, if the current system cost is $10, and someone wants to do something that will cost an addition of $10 to the system, we need to compute the benefit of that addition to the current people, and calculate how much each of them should pay for the incremental increase in cost.”
[3]: “No, it is not important. Everytime a new cost is added to the system, we simply analyze the whole system and see who is responsible for what and calculate the split. It is incorrect to assume that the immediate actor leading to the increase in cost is solely responsible for the cost. Casuality runs deeper than that single moment.”
[4]: “No, it is not important. We should just sum it up and divided it equally for everyone. Everyone should pay the same amount for that incremental increase, regardless who is causing the increase.”
If I had answered a simple Yes or No, the meaning would be up to the interpretation of the reader. The question cannot be answered without the elaboration behind the label, and also connecting the words to the actual algorithm. According to Equal Discount, the answer could be [3] or [4]. But many other algorithms could also claim to follow [3] or [4], because the meaning of the answer is not specific unless the Algorithm is specified.
The analogy with VISA card is a strawman argument because according to the table I have been showing, there is no excess payment being made.[/i]
Edgar, for you this is a strawman argument. For me it is the existential core of the process. Lets look at your 4 scenarios.
(1) is correct as written. The cost is a direct cause of the action of the “someone who wants to do something”
(2) is incorrect. What you are doing is forcing people to pay for the actions of the “someone who wants to do something” without their having a voice in the decision to incur the cost. Unless they increase their use in the period where the benefit is obtained then they get no incremental benefit over and above the benefit they are currently obtaining. If they actually choose to increase their use in the period where the benefit is obtained then they by their own choice change their status to the level of “someone who wants to do something” and then share in the cost incurred.
(3) is incorrect. Again, what you are doing is forcing people to pay for the actions of the “someone who wants to do something” without their having a voice in the decision to incur the cost. That is a Boston Tea Party scenario . . . i.e. “taxation without representation”
(4) is incorrect. Again, what you are doing is forcing people to pay for the actions of the “someone who wants to do something” without their having a voice in the decision to incur the cost.
Your tables do not harmonize the cost incurrance realities with the cost defrayment realities.
[quote]Bill Kopper and Bob Black were young activists in the early 1970s and helped [b]transform Davis[/b] from the agricultural and conservative community that it had been to the progressive and cutting edge community it would become.[/quote]Nah… that designation would go to Kent Gill, Maynard Skinner, and others… the two you mention may have kept the flame alive, but they did not light it… ask Lofland.
BTW another Mr H deceit: Bob Black was elected in the early 70’s… he had his wife protest the “war” by sitting on the RR tracks… Kopper was late 70’s… they may have had a two year overlap on the CC… perhaps none… Mr H, citing the Kopper/Black ‘ticket’ obfuscates yet again…
Edgar Wai said . . .
[i]”Depending on how much storage capacity there is, we can dismiss whether hourly usage is a stressor to the system.”[/i]
You are again thinking in operational terms rather than capital investment terms. The key question from a capital investment perspective is, “What are the capital costs associated with the storage capacity?”
Context: Matt and I were discussing about evaluating fairness of billing rates. I said that Matt only explained how he calculated the rates, but did not justify them. Matt’s reply asserted again his belief that incremental cost assignment is fair without justification.
My Intention: I feel that Matt does not understand various forms of logical arguments, and does not understand how to justify a conclusion. In the following I try to explain the meaning of “justify”. Matt also did not admit his fault in falsely interpreting that Equal Discount would not result in excess in collection. But by now I no longer demand him to admit his fault because his refusal to ethically admit his own fault is now obvious. My intention is to document the list of questions that Matt did not answer, and faults that he did not admit. This will save me time from explaining what has been happening. Just on top of my head, accusations that Matt had not dismissed include:
1. That Equal Discount would collect too much
2. That he raised the issue of legality against Equal Discount, but did not dismiss it after I asked him to point out how Equal Discount is different from CBFR in terms of legality.
Matt can provide data and answer questions he knows. But he does not admit faults. The less the ethics and integrity is displayed, the more important for accountability to be established in the policies before it should pass.
[b]On Fairness[/b] [Re] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176551[/url])
The correct definition of fairness is universal and impartial. A person does not get to pick and choose a definition of fairness as they see fit. To show that a billing rate system is unfair, it only takes one scenario where the framework does not apply. The correct definition of fairness is objective, and is applicable to all situations.
Incremental Cost Assignment of costs is unfair. To prove that it is unfair, it is sufficient to show one scenario where the believer uses Incremental Cost Assignment, while in another scenario, the believer would rather NOT use Incremental Cost Assignment. When that happens, it is exposed that the believer picked and choose the method, that the believer.
According to previous discussion, we already know how Icremental Cost Assignment would handle the following scenario: [Ref] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6112:let-our-legacy-be-clean-water&catid=50:elections&Itemid=83&cpage=30#comment-176329[/url])
To split the cost of the plant for the following use pattern:
o A: Winter 10, Summer 40
o B: Winter 30, Summer 10
In Incremental Cost Assignment (CBFR), the split is A:80%, B:20%. The usages in the winter are ignored because they don’t correspond to the peak use. The concept of Incremental Cost Assignment is the following:
Suppose the usage pattern is this:
o A: Winter 0, Summer 40
o B: Winter 0, Summer 10
In all three methods analyzed (CBFR, Equal Discount, Proportional), all of them will result in the split of A:80%, B:20%. When B starts to use water in the Winter, a CBFR believer would argue that [i]since that use does not add to the capital cost, B’s payment should stay the same.[/i]
B says, “Cool, in that case, I might as well do this:” [i]B increases his use to the maximum capacity in winter[/i]
o A: Winter 0, Summer 40
o B: Winter 50, Summer 10
According to Incremental Cost Assignment, B’s increase in water use never caused any additional capital increase. Incremental Cost Assignment [b]Dictates[/b] that the split of the capital cost is still A:80%, B:20%.
If A wants to use 1 unit of water in the Winter, new construction is required. As [b]Dictated[/b] by Incremental Cost Assignment, A would have to pay for all of it. Suppose the size of the plant is doubled because that is the smallest size of water plant that can be physically built:
o A: Winter 1, Summer 40
o B: Winter 50, Summer 10
The peak capacity is 51 in the winter. The excess capacity in winter is 49 (since the plant size doubled). The Split of the total construction cost is:
o First Plant: A:80%, B:20%
o Second Plant: A:100% B:0%
A believer of ICA would [b]have to[/b] say, “So far so good!”
(Cont…)
And now B does his thing and uses up all excess capacity:
o A: Winter 1, Summer 40
o B: Winter 99, Summer 60
Since B’s action did not cause any additional increase in capital, according to ICA, B would pay nothing extra.
C is an auditor. He looks at the use pattern and read CBFR. He asks, “According to CBFR, A should pay 40%, and B should pay 60%.”
B protests, “Not according to Incremental Cost Assignment! I only increased my use when the capacity is already there. My action never caused any increase in capital.”
C says, “I thought we are billing by CBFR, which is based on Summer Peak proportion.”
B says, “CBFR is based on Incremental Cost Assignment. CBFR deviated from Incremental Cost Assignment, it violated its own principle. Whoever doing CBFR did it wrong. What I tell you is correct. To correctly do Incremental Cost Assignment, you need to keep track of the [b]History[/b] of the incremental increases. When you audit the history, you see that [i]I[/i] was not responsible.”
C says, “If CBFR does not follow the principle of Incremental Cost Assignment, what does it follow?”
B says, “I don’t know. You need to ask the designer of CBFR.”
[b]What principle does CBFR follow?[/b]
Do you assert that B’s conclusion is correct: that the final split should be A:90%, B:10%? If you pick this, you are admiting that CBFR is incorrect.
Do you assert that CBFR’s conclusion is correct: that the final split should be A:40%, B:60%? If you pick this, you are admiting that your following statements are incorrect:
B’s arguments [b]AGAINST[/b] CBFR:
[quote]Is harmony between the cost incurrance decision and the cost defrayment decision unimportant to you?
For me it is the existential core of the process. [/quote]
[quote]The cost is a direct cause of the action of the “someone who wants to do something.[/quote]
[quote]What you are doing is forcing people to pay for the actions of the “someone who wants to do something” without their having a voice in the decision to incur the cost. Unless they increase their use in the period where the benefit is obtained then they get no incremental benefit over and above the benefit they are currently obtaining. If they actually choose to increase their use in the period where the benefit is obtained then they by their own choice change their status to the level of “someone who wants to do something” and then share in the cost incurred.[/quote]
[quote]Your tables do not harmonize the cost incurrance realities with the cost defrayment realities.[/quote]
The trial of fairness does not require a competing contestant. Falsehood is exposed by their self-contradiction.
Incremental Cost Assignment is unfair because it creates a situation where a person who can wait can exploit the person who can’t. Incremental Cost Assignment allows an oppressor to [b]monopolize[/b] the use of a resource and offset all of the risks and costs of capital investment to whoever happens to need it to survive.
Under Incremental Cost Assignment, an evil water company, after building a water plant, could use up all of the capacity [b]itself[/b] and force the public to build [b]another[/b] water plant because the plant has [b]maxed out[/b]. Incremental Cost Assignment carries huge fairness and accountability issues.
[i]If you are thirsty and you need that cup of water or you die, you will have to pay for the entire plant. Once that is done, I will make sure that I use up all of its capacity so that when you are thirstly again, you will need another plant.[/i]
This is the magnitude of the risk from Incremental Cost Assignment.
Proportionality does not have this risk.
Equal Discount does not have this risk.
Of the three methods, only Incremental Cost Assignment/CBFR has this risk.
I am not asking people to scrap the project.
I am asking people to patch the loophole so that no one needs to worry about freaky situations.
If no change is made, it begs that question [b]WHY NOT?[/b]
* * *
I don’t think Matt is a bad person. I think Matt has been replying too much. Matt needs a break so that he can switch from the mode of regurgitating information to the mode of thinking logically. I think these are two different modes of thinking. As long as Matt is stuck in the regurgitation mode, he can’t think.
Edgar Wai said . . .
[i]”Incremental Cost Assignment is unfair because it creates a situation where a person who can wait can exploit the person who can’t. Incremental Cost Assignment allows an oppressor to monopolize the use of a resource and offset all of the risks and costs of capital investment to whoever happens to need it to survive.”[/i]
Very good point Edgar, but CBFR eliminates that risk through the use of its annual Supply Charge adjustments. If the person who can wait does so for a year and then starts using the incremental value of the system, then the Supply Charge recognizes the incremental use and assigns a proportional addition to the customer’s Supply Charge. The same principle applies when a new customer is added to the system. The new customer’s share of the mortgage for the incurred cost is proportional to the load that that new customer adds to the controlling use period (summer peak in the Davis situation).
Edgar Wai said . . .
[i]”If you are thirsty and you need that cup of water or you die, you will have to pay for the entire plant. Once that is done, I will make sure that I use up all of its capacity so that when you are thirstly again, you will need another plant.
This is the magnitude of the risk from Incremental Cost Assignment”.[/i]
That is expressly forbidden under the GAAP rules that apply to Enterprise Fund accounting. Therefore there is zero risk of that scenario happening.
“But what we see in the water election is something that really cuts across lines. John Munn joining with the more liberal Michael Harrington or Sue Greenwald seems to be the odd couple, and having Bob Dunning be the most vocal voice of the opposition is even odder.”
I don’t see irony in this at all. In fact the irony is that you think there is irony. I have been writing for years about how the anti-growth advocates are conservatives akin to Rockefeller Republicans of the 60’s so it is no surprise to me that they have finally come together in the big tent of No on I. Someone reminded me that when Bush wanted to invade Iraq Harrington and another council member had a pro-invasion rally or at least one where Anti-war advocates were asked not to attend.
“?I don’t think Matt is a bad person. As long as Matt is stuck in the regurgitation mode, he can’t think.”
Valuable observations,Edgar. Linear computer “thinking” of voluminous spread-sheet data essentially eliminates from consideration . I too have sincere respect for Matt but feel that he(and his ego?) have become too closely dependent on his conclusions to which he has devoted so much of his time and energy. I was surprised when he responded to my continued support to pursue the West Sac option, calling it a ” master-slave relationship”,clearly a hyperbolic rant. I know,in the early stages of the WAC, that he looked quite favorably at the City of Tracy’s water-purchasing operation which the West Sac option would resemble.
‘Valuable observations,Edgar. Linear computer “thinking” of voluminous spread-sheet data essentially eliminates from consideration….”
The rest of this sentence is …..tangential observation and tangential critical thinking.
Edgar: [i]”I don’t think Matt is a bad person. I think Matt has been replying too much. Matt needs a break so that he can switch from the mode of regurgitating information to the mode of thinking logically. I think these are two different modes of thinking. As long as Matt is stuck in the regurgitation mode, he can’t think. “[/i]
Wow, Edgar, that’s quite a dismissal. He is rather valiantly trying to reply to your very long, very detailed comments and questions.
I want to acquaint you with one of the common abbreviations used on internet forums: TLDR. It stands for Too Long, Didn’t Read. For most people it applies to any post that is longer than a few paragraphs. On a number of threads he is the only one trying to answer your questions, probably because the others here feel they merit a TLDR. I urge you to consider brevity, less elaborate question structures, and be a little more grateful that you have someone willing to engage at your level of detail.
Edgar
I just have one other thought about your comment with regard to Matts commentary. It is usually more constructive to keep one’s comments directed towards the actual points being made rather than to speculate about why you think that someone may not be addressing an issue to your satisfaction. These kinds of comments are frequently taken personally, even if not so intended and do nothing to move the conversation forward.
Re: Matt
[b]On CBFR Adjustments[/b] [Re] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176560[/url])
Could you confirm your meaning of Supply Charge Adjustment by numbers:
Scenario: The total loan is $200. The debt service is $100 each year.
Usage Patterns: (Please note the change in style. I transposed the tables.)
[b]Year 1:[/b]
o Winter: A:10 B:30
o Summer: A:40 B:10 (Excess:0)
CBFR: A:80% B:20%
[b]Year 2:[/b] (A reduces summer use by half)
o Winter: A:10 B:30
o Summer: A:20 B:10 (Excess:20)
CBFR: A:-? B:-?
[b]Year 3:[/b] (B leaves the city)
o Winter: A:10
o Summer: A:20 (Excess:30)
CBFR: A:-? B:-?
[b]Year 4:[/b] (C joins the city)
o Winter: A:10 C:10
o Summer: A:20 C:20 (Excess:10)
CBFR: A:-? B:-? C:-?
This is the result of Equal Discount in an ideal world:
Year 1: A:57% B:43% (A pays $57, B pays $43)
Year 2: A:57% B:43% (A pays $57, B pays $43)
Year 3: A:57% B:43% (A pays $0, B pays $0)
Year 4: A:44% B:33% C:22% (A [b]gets[/b] $12.7, B [b]gets[/b] $9.5, C pays $22.2)
davisite2 said . . .
“Valuable observations,Edgar. Linear computer “thinking” of voluminous spread-sheet data essentially eliminates from consideration . I too have sincere respect for Matt but feel that he(and his ego?) have become too closely dependent on his conclusions to which he has devoted so much of his time and energy. I was surprised when he responded to my continued support to pursue the West Sac option, calling it a ” master-slave relationship”, clearly a hyperbolic rant. I know,in the early stages of the WAC, that he looked quite favorably at the City of Tracy’s water-purchasing operation which the West Sac option would resemble.”
Not hyperbolic d2, simply a quote from a West Sacramento official at a SACOG meeting. “The only way that Davis is going to get any of our water is if we are the masters and they are the slaves.” That official had no idea that there was anyone from Davis in the room.
That comment illuminated the difference between the contractual water purchase agreements that Tracy has and what Davis would have from West Sac.
First, Tracy’s contracts are for raw water not treated water.
Second, Tracy’ has more than one such supplier which gives them insurance in case one of the sources becomes unreliable and gives them ongoing negotiating leverage that keeps the business relationships “honest.”
Third, Tracy’s contracts are for 40 years and at the 20 year point Tracy and their supplier negotiated a 20 year extension to put the contracts back out to 40 years.
Fourth, West Sacramento offered a contract to 2032, which effectively made it a 15 year term with no renewa; option
Fifth, the terms West Sac offered for the $12.66 million connection fee included Davis paying for a 12 mgd upgrade to the West Sac water treatment plant if Davis wanted the service to go beyond 2032.
The “master/slave” comment by the West Sac official at SACOG was on Thursday, September 6th, 2012. The Tracy presentation to the WAC was on May 24th, 2102. My attitude toward a Tracy-like contract survives to this day. That clearly was not what West Sac was offering.
For the record you never once came to a single WAC meeting. So, perhaps you should have a talk with the person who gazes out at you from a mirror the next time you decide to call out someone about something for which you are woefully under informed.
medwoman said . . .
[i]”Edgar, I just have one other thought about your comment with regard to Matts commentary. It is usually more constructive to keep one’s comments directed towards the actual points being made rather than to speculate about why you think that someone may not be addressing an issue to your satisfaction. These kinds of comments are frequently taken personally, even if not so intended and do nothing to move the conversation forward.”[/i]
medwoman, I have no problem whatsoever with Edgar expressing his frustration with our dialogue. He and I are caught in a “framing” conundrum. We are both looking at the same situation from very different perspectives. He wants a perfect theoretical solution that will bend the vagaries of real life to it. I start at the exact opposite end of the pendulum swing with the applied practical realities of the situation. The fact that we have been talking past one another is not a surprise. I respect Edgar for his idealism. I respect him for his commitment to that idealism.
I’m a little less tolerant of davisite2 though, right now, but I will get over it. I realize he like Edgar is idealistic to his core, but his is a pessimistic idealism, a pervasively suspicious idealism, a damn the torpedoes populist idealism. When I meet davisville2 at the Farmers Market we always have interesting and spirited discussions, but he reminds me of the woman who I met once during the Measure X campaign who I asked the following question to, “Ma’am, when I drive down Montgomery Boulevard on my way into town there is a sign that says, City of Davis, Population 65,000. I’m curious, given the fact that Davis’ current population is 65,000, what do you think the ideal target population should be for Davis in 10 years?”
Without skipping a beat she replied, “50,000!” She wanted 15,000 of Davis’ current residents to move away. I think there is a good chance that davisite2 believes that the ideal target population for Davis is 50,000 too.
Edgar, your question below is a text book example of what I said to medwoman above. Your scenarios have no relationship to reality. First there are 16,433 accounts that are sharing the mortgage fee for the construction costs, so these two accounts that you have laid out will simply be background noise in the real-life Davis situation. Second, like Bob Dunning you are coming up with hypothetical customers whose water use pattern is virtually impossible to find in real life in Davis. Can you please describe the demographics of your customer B that would explain why s/he would use 30 ccf per month in winter and 10 ccf per month in summer. I’m really interested to hear about that person’s lifestyle and lifestyle choices. He seems like he could be walking down the yellow brick road with Dorothy.
With the above said, I have filled in the values of what the current Supply Charge thinking is. That thinking could change.
Edgar Wai said . . .
[i]Re: Matt
On CBFR Adjustments [Re]
Could you confirm your meaning of Supply Charge Adjustment by numbers:
Scenario: The total loan is $200. The debt service is $100 each year.
Usage Patterns: (Please note the change in style. I transposed the tables.)
Year 1:
o Winter: A:10 B:30
o Summer: A:40 B:10 (Excess:0)
[b]CBFR: A:80% B:20% [/b]
Year 2: (A reduces summer use by half)
o Winter: A:10 B:30
o Summer: A:20 B:10 (Excess:20)
[b]CBFR: A:66.6% B:33.4% [/b]
Year 3: (B leaves the city)
o Winter: A:10
o Summer: A:20 (Excess:30)
[b]CBFR: A:100% B:0% [/b]
Year 4: (C joins the city)
o Winter: A:10 C:10
o Summer: A:20 C:20 (Excess:10)
[b]CBFR: A:50% B:50% [/b]
Re: Matt [url=https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176690][Re]p/url]
The purpose of those examples is to clarify your meaning of “Supply Charge Adjustment”. Those three words, as spoken in English, have no meaning. The meaning can only be seen in the equation or its results. Numbers are used here as a tool of [b]communication[/b].
The numbers you show me confirms that my understanding of CBFR has been correct, that “Supply Charge Adjustment” is not something new that I didn’t know. And that CBFR is not what I called “Incremental Cost Assignment” previously. However, the answers you showed are incorrect even for CBFR because you missed the detail of the scenario where the debt payment is only needed for [b]two years[/b]. By the end of Year 2, A and B would have paid for the capital investment completely.
Could you correct your answer:
Year 1: A:80% B:20%
Year 2: A:67% B:33%
Edgar, your choice of a debt rerm of two years is another example of how detached from reality you are. Bonds are almost always issued for 30 years. State Revolving Funds loans typically have a term of 20 years. Why you chose a 2 year debt term is beyond me.
With that said, were you trying to simulate the last two years of a mortgage? If that was your intent then the annual mortgage payment amount would go down to zero and there would be no fixed costs to split in your scenario. That would mean:
Year 1: A:80% B:20%
Year 2: A:67% B:33%
Year 3: no costs to allocate
Year 4: no costs to allocate
Matt, I was trying to assess the fairness and stability of CBFR. To do that I need to know if someone could wait out the payment period and benefit from the capital without paying for it.
This is Item 18 on this list:
[ Water Rates Info List ] ([url]http://skylet.net/docs/2013-02-18-2347-WaterRatesInfoList.htm[/url])
(I apologize that I can’t arrange the IDs numerically.)
Edgar, as I said in the answer I provided just a moment ago in the other thread, Enterprise Fund accounting rules and the provisions of Proposition 218 , which govern all water districts clearly state that you can not have a charge without an underlying cost. Once the cost goes away, as it would in your scenario above, then the charge has to go away too.
The laws are the laws. I get the feeling that you are trying to design a billing system that disregards any constraints that the legal system and/or the regulatory system impose on it. Is that correct?
Edgar Wai said . . .
[i]”I need to know if someone could wait out the payment period and benefit from the capital without paying for it.”[/i]
The simple answer to that question is that yes they could do so, but that in the period when they are “waiting” they would have no water service. Do you really see a homeowner living in a house with no water service just to avoid a payment that is likely to be less than $1,000 per year?
[Re] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176703[/url])
On the relation between ethics and laws:
Behind each correct law is an ethical principle. Ethics decides whether a law is correct. While it is lawful to abid by the law. It is ethical not to lose sight of true fairness. How do you decide if a law is correct? Is it possible for a law to be incorrect? If so, whose responsibility it is to identify them and remove them from legislature?
When you say the following:
[quote]Enterprise Fund accounting rules and the provisions of Proposition 218 , which govern all water districts clearly state that you can not have a charge without an underlying cost. Once the cost goes away, as it would in your scenario above, then the charge has to go away too.[/quote]
Which interpretation do you meant:
a) Matt wishes that Enterprise Fund accounting rules and provisions of Proposition 218 were designed differently. If they were, people in Davis will be getting a [b]more fair[/b] rate. Matt hopes to give that to the people of Davis, but he can’t do that because he is limited by the laws. The first step of doing so, is to education the people so that they understand those rules are not the most fair, and not in the best interest of the people.
b) Matt believes that the Enterprise Fund accounting rules and provisions of Proposition 218 were correct and there is nothing more fair that those rules. Anyone who suggests that there is a more fair rule can be readily disproved without citing those rules (that would be a circular argument).
c) Matt believes that the Enterprise Fund accounting rules and provisions of Proposition 218 were correct. But he is not ready to disprove anyone who believe otherwise. He wants them to keep thinking about it because if they succeed, everyone will get a more fair version of the rules.
d) …?
[Re] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176704[/url])
What I see is a user with a water tank that stores winter water for summmer use. In the following use pattern, user A and user B will pay $0 for the capital cost of the treatment plant, but get the benefit of the treatment plant:
o Winter: A:5 B:5 C:10
o Summer: A:o B:o C:50 (Excess=0)
CBFR: A:0% B:0% C:100%
In Equal Discount and Proportional billing, a user that benefits from the capital will pay for the capital.
EDIS: A:8.3% B:8.3% C:83.3%
PPTN: A:7.1% B:7.1% C:85.7%
[Re] ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176703[/url]) On Ownership
[quote]Once the cost goes away, as it would in your scenario above, then the charge has to go away too. [/quote]
In a fair system, the person who pays for their responsibility of the capital cost is an owner of the capital.
In Equal Discount, when a person pays for the capital cost, he owns part of the capital. Even when the “mortgage” is paid off, his share of the ownership remains. This is why when a new user joins [i]after[/i] the capital is paid off, the new user will still be making a payment for the capital cost. That payment is for his share of the ownership of the system. When that happens, the money of that payment ends up reimbursing the existing users, who had already paid for the capital.
That payment is not a charge. It is the price of ownership.
I think this is similar to or exactly how a co-op works.
Edgar said . . .
[i]”Behind each correct law is an ethical principle. Ethics decides whether a law is correct. While it is lawful to abid by the law. It is ethical not to lose sight of true fairness. How do you decide if a law is correct? Is it possible for a law to be incorrect? If so, whose responsibility it is to identify them and remove them from legislature? “[/i]
Edgar, In an earlier post within this thread I said, “medwoman, I have no problem whatsoever with Edgar expressing his frustration with our dialogue. He and I are caught in a “framing” conundrum. We are both looking at the same situation from very different perspectives. He wants a perfect theoretical solution that will bend the vagaries of real life to it. I start at the exact opposite end of the pendulum swing with the applied practical realities of the situation. The fact that we have been talking past one another is not a surprise. I respect Edgar for his idealism. I respect him for his commitment to that idealism.”
Your comment above displays that “framing” conundrum perfectly . . . absolutely perfectly. For you laws are trifling inconveniences on the path to true spiritual enlightenment. I’m 65 years old. 45 years ago I manned the barricades in the same kind of pursuit that you are following. Back in 1969 I was all about ethics trumping laws. I’m too old and too jaded and too arthritic and some would say too feeble-minded (davisite2?) to do that now. I have a hard enough time keeping up with the realities of life.
With that said, I have thoroughly enjoyed your idealism, and I look forward to hearing about its application in other venues beyond water. Keep the cards and letters coming. 8>)
Edgar Wai said . . .
[i]”Behind each correct law is an ethical principle. Ethics decides whether a law is correct. While it is lawful to abid by the law. It is ethical not to lose sight of true fairness. How do you decide if a law is correct? Is it possible for a law to be incorrect? If so, whose responsibility it is to identify them and remove them from legislature?”[/i]
Two other thoughts on what you have said.
First thought: Yes, laws an be incorrect, and yes we (as a society) should identify such incorrect laws and work to have them modified or eliminated. However, until those laws are formally changed they are the law of the land, and we have no choice other than to obey them.
Second thought: Let’s look at one particular legal reality that exists here in the United States . . . [i]Roe vs. Wade[/i]. Some people believe that Roe vs Wade is totally and completely unethical. Just as many people believe that [i]Roe vs Wade[/i] is totally and completely ethical. How do you resolve that difference in ethical perception? Is the disconnect that exists within our society about the ethics of [i]Roe vs. Wade[/i] a “framing” conundrum”?
Edgar Wai said . . .
[i]”Which interpretation do you meant:
a) Matt wishes that Enterprise Fund accounting rules and provisions of Proposition 218 were designed differently. If they were, people in Davis will be getting a more fair rate. Matt hopes to give that to the people of Davis, but he can’t do that because he is limited by the laws. The first step of doing so, is to education the people so that they understand those rules are not the most fair, and not in the best interest of the people.
b) Matt believes that the Enterprise Fund accounting rules and provisions of Proposition 218 were correct and there is nothing more fair that those rules. Anyone who suggests that there is a more fair rule can be readily disproved without citing those rules (that would be a circular argument).
c) Matt believes that the Enterprise Fund accounting rules and provisions of Proposition 218 were correct. But he is not ready to disprove anyone who believe otherwise. He wants them to keep thinking about it because if they succeed, everyone will get a more fair version of the rules. “[/i]
None of the above. You need to add d) as follows:
d) Matt accepts the fact that Enterprise Fund accounting rules and provisions of Proposition 218 are the existing laws of the land and chooses to work within the parameters of those laws and rules and regulations.
It is kind of like driving down a highway that has guardrails on either side of the road. In those cases I do not try and steer my car so that it jumps over the guardrails so I can drive on the lush green grass instead of the concrete roadway.
Edgar, to centralize our continuing discussions of this topic a Message Board thread has been created. Using that thread means the the discussion does not have to jump around from place to place. The link to that thread is [url]https://davisvanguard.org/index.php?option=com_kunena&func=view&catid=2&id=996&Itemid=192#996[/url] which can also be reached by going to the bottom of this screen and clicking on the [b]Bulletin Board[/b] link