Sunday, April 20, 2014
YOLO COUNTY NEWS
99 CENTS

Fixed rate is system’s ‘mortgage’

By Matt Williams

On Valentine’s Eve, readers of The Enterprise were exposed to some creative accounting by columnist Bob Dunning. I thought it would be interesting to take a further look at the example he provided on Davis’ proposed water rates.

Specifically, let’s look at another commodity that we all value … our home. Since almost everyone who is a ratepayer is also the owner of a home (or business), there is a very direct parallel between our decisions about home ownership and our decisions about water use.

* For both home ownership and water use, we start by deciding what our level of need is;

* We then choose to buy the amount of house/water that meets our need; and

* With respect to our house, we have periods of peak use and we have periods of off-peak use.

Many Davis residents are empty nesters living in a house with three or four bedrooms. Unless we have visiting family, our use of our home is almost always “winter” use. Only when friends or family come from out of town to visit do we find ourselves in a “summer” use pattern with bodies in all three or four bedrooms.

When we took out a mortgage when we bought our house, did the bank ask us what our relative proportions of “winter” and “summer” use of the house were going to be? No. The price of the house essentially assumed we would make optimum use of the house 365 days of the year, otherwise we would be buying a different house with less “summer peak” capacity. The monthly mortgage payment for the house we bought is the same month after month regardless of how much of our house we use.

Further, anyone who reads The Enterprise on a regular basis knows that Bob Dunning and his family go on vacation to his beloved Oregon each year. Whether the vacation is a weekend or multiple weeks, Bob’s use of his house drops to zero. Does Bob’s monthly mortgage payment drop even a penny?

If any one of us tries to convince a bank that our mortgage payment should adjust each month based on how often we take vacations or how often we have house guests, the bank will laugh and say we are playing fast and loose with numbers that have no relation to reality.

Using the water math Bob provides in his column, the cost of a mortgage on a per-day basis is “two times as high” during a month where the owners are on vacation for two weeks. That rises to “four times as high” if the vacation extends to four weeks … and if you rent, the exact same situation applies. The only difference is that the monthly payment is for rent rather than for mortgage.

The supply charge in the consumption-based fixed rate structure is simply each ratepayer’s mortgage payment for the peak water system capacity that the ratepayer decides is needed during the summer irrigation season.

With a house or apartment, the mortgage/rental payment doesn’t change based on month-to-month usage changes. The only way we can reduce our mortgage/rental payment is to downsize to a smaller house with less “summer” capacity, and when we do, our monthly payment goes down.

The supply charge in CBFR works the exact same way. If a ratepayer decides to downsize his use during the May-to-October irrigation season (when all the metaphorical bedrooms are full of bodies), then his monthly supply charge mortgage payment the next year will be lower each and every month. Why? Because, just like moving to a smaller home/apartment, he will have downsized his use of the water system’s peak capacity.

Those are the facts, ma’am … only the facts.

— Matt Williams, an El Macero resident, is a member of the Davis Water Advisory Committee. He drafted the consumption-based fixed rate structure with fellow WAC member Frank Loge.

Special to The Enterprise

LEAVE A COMMENT

Discussion | No comments

The Davis Enterprise does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

    Tom Adams seeks Davis school board seat

    By Jeff Hudson | From Page: A1

     
    Hub of activity: DHS newspaper keeps evolving

    By Zoe Juanitas | From Page: A1 | Gallery

     
    A springtime ritual

    By Wayne Tilcock | From Page: A1 | Gallery

    Holy fire ceremony draws thousands in Jerusalem

    By The Associated Press | From Page: A2 | Gallery

     
    Tour renovated YCCC facility Thursday

    By Enterprise staff | From Page: A3

     
    Tour Davis Waldorf School on Wednesday

    By Enterprise staff | From Page: A3

    The fifth annual Tour de Cluck is soon to be hatched

    By Special to The Enterprise | From Page: A3 | Gallery

     
    Ortiz lawn signs available

    By Enterprise staff | From Page: A3

    Sign up soon for spring cooking classes

    By Enterprise staff | From Page: A3

     
    Robb Davis team to rally on Saturday

    By Enterprise staff | From Page: A3

    Steadfast in their support

    By Lauren Keene | From Page: A4, 8 Comments | Gallery

     
    Yolo Hospice offers free grief workshops

    By Enterprise staff | From Page: A4

    Sign up for Camp Kesem caterpillar crawl

    By Enterprise staff | From Page: A4

     
    Quilters gear up for annual show

    By Sebastian Onate | From Page: A4

    League hosts a series of candidate forums

    By Enterprise staff | From Page: A5

     
    KDVS launches fund drive on Monday

    By Jeff Hudson | From Page: A5

    Calling all Scrabble fans

    By Enterprise staff | From Page: A5, 1 Comment | Gallery

     
    Hub webpage is seeing traffic increasing

    By Zoe Juanitas | From Page: A8

    Hotel/conference center info meeting set

    By Enterprise staff | From Page: A16

     
    Lescroart welcomes all to book-launch party

    By Special to The Enterprise | From Page: A16 | Gallery

    DEVO set to serve up 14th annual Winkler Dinner

    By Enterprise staff | From Page: A16 | Gallery

     
    Learn Chinese crafts at I-House

    By Sebastian Onate | From Page: A16

    Preschool open house set at Davis Waldorf

    By Enterprise staff | From Page: A16

     
    Birch Lane celebrates its 50th anniversary

    By Enterprise staff | From Page: A16

    .

    Forum

    Take ownership of your health

    By Special to The Enterprise | From Page: B5

     
    Keep your baby safe

    By Special to The Enterprise | From Page: A7

     
    Not thrilled with lack of symmetry

    By Special to The Enterprise | From Page: A7

    Reliving the agony and ecstasy of spring

    By Marion Franck | From Page: A7

     
    Road diet? No, city diet!

    By Letters to the Editor | From Page: A12, 5 Comments

    We’re reveling in our equality

    By Letters to the Editor | From Page: A12, 1 Comment

     
    Vote no; it’s fiscally responsible

    By Letters to the Editor | From Page: A12, 3 Comments

    Rick McKee cartoon

    By Debbie Davis | From Page: A12

     
    Core values on campus

    By Our View | From Page: A12, 3 Comments

     
    Don’t want to sit in Fix 50 traffic? Consider alternatives

    By Special to The Enterprise | From Page: A13, 1 Comment

     
    Bill is an affront to UC Davis ag biotech and local farmers

    By Special to The Enterprise | From Page: A13, 2 Comments

    .

    Sports

    Devils burn up the track

    By Enterprise staff | From Page: B1

     
    UCD softball shut out by Santa Barbara

    By Thomas Oide | From Page: B1 | Gallery

     
    Aggie men shoot 9-under, lead own tourney

    By Bruce Gallaudet | From Page: B1 | Gallery

    Stars shine in Woody Wilson Classic

    By Evan Ream | From Page: B1, 1 Comment | Gallery

     
    UCD roundup: Aggie baseball swept away by Highlanders

    By Enterprise staff | From Page: B2

    A’s score 3 in ninth, rally past Astros 4-3

    By The Associated Press | From Page: B6

     
    .

    Features

    .

    Arts

    .

    Business

    Yolo Federal Credit Union gets WISH funds

    By Enterprise staff | From Page: A9

     
    PG&E pays taxes, fees to county, cities

    By Enterprise staff | From Page: A9, 1 Comment

    Will Davis get an Old Soul?

    By Wendy Weitzel | From Page: A9

     
    Pediatricians, nurse practitioner hired at Woodland Healthcare

    By Enterprise staff | From Page: A9 | Gallery

    Asian stocks mostly higher after mixed U.S. earnings

    By The Associated Press | From Page: A9

     
    Davis Roots will showcase its graduating startups

    By Enterprise staff | From Page: A14

    University Honda wins another President’s Award

    By Enterprise staff | From Page: A14 | Gallery

     
    Dutch Bros. raises $19,000 for girl with leukemia

    By Enterprise staff | From Page: A14 | Gallery

    .

    Obituaries

    .

    Comics

    Comics: Sunday, April 20, 2014

    By Creator | From Page: B8