Usage drops when prices rise. Hence, higher prices may not increase — and may even decrease — revenue. For example, if water rates triple and usage drops two-thirds (perhaps because we modify landscaping and adopt two-button toilets), then revenue will not increase. In some cases, there is no set of rates that can offset a jolt in costs.
So, Water Advisory Committee and City Council, please tell us:
* Why you think that the announced schedule of rate increases and sequence of “innovative” multi-tiered rate structures will produce adequate revenue. In particular, how did you obtain the “projected annual revenue requirement” and “total projected water use,” and what are the standard errors of your estimates?
* What happens if revenues turn out, in fact, to be less than debt service and other expenses. In particular, will our streets never again be paved?
Your websites (http://public-works.cityofdavis.org/water/rates/frequently-asked-questions and http://www.wdcwa.com/documents) and brochure are professional and informative. If the answers are there, please tell me exactly where — and accept my apology for missing them.
Stephen H. Sosnick