By Joe Krovoza and Stephen Souza

Last week, we wrote about the new regional surface water project and highlighted Davis’ need for a high-quality and reliable water supply. This week, we will address project costs and rates.

As a quick review, the project will provide a new supply of surface water from the Sacramento River to Woodland and Davis. This will become our new primary supply. In Davis, we will keep six of our very best high-quality deep aquifer wells to supplement summer demand.

The Woodland-Davis Clean Water Agency will construct a joint river water intake and facility to treat the water before distribution to the cities. The cities will distribute the water to their citizens.

Davis’ share of the joint project is estimated to be $133 million. There will be Davis-only conveyance pipes, storage and distribution now estimated at $22 million. We must raise rates to finance this combined cost of $155 million.

As discussed last week, there are many good reasons for the project. However, the undeniable “stick” is the likelihood of expensive wastewater discharge fines in 2017, which probably would be set at levels high enough to force our compliance. The surface water project is central to meeting these state-mandated environmental regulations in an efficient and cost-effective manner.

The necessity of the project does not negate our concern for the impact of higher water rates. To set the rates, the city has been actively seeking and considering input from ratepayers — both residents and businesses. As a direct result of this input, and after a careful re-evaluation of all project costs, financing options and rate model assumptions, the recommended rates coming before the City Council on Tuesday evening are substantially lower than those published in the Proposition 218 notice.

The revised water rates would increase monthly costs for typical single-family residential customers from $34.75 to $77.18 over five years. Year one and two increases are proposed at 14 percent per year, which is half of what was published in the Prop. 218 notice. City staff members are proposing year three through five increases at 19 percent.

If adopted, these increases would be 2.2 times our current water rates for an average single-family residence. An option for spreading the rate increases over a six-year period also will be considered by the council, resulting in 14 percent increases for all six years.

Our current structure of a base rate plus two price tiers for water consumption will remain.

Customers with below-average water use now will experience lower-than-average monthly water bill amounts, while customers with above-average water use will see higher-than-average monthly water bill amounts. The city’s estimate above for an average single-family bill assumes 20 percent conservation over today’s typical use level. Thus, monthly impacts on each ratepayer will vary depending on their current water use and their level of conservation.

Specifics on the revised rate proposal are included in Tuesday’s City Council agenda packet posted online at www.cityofdavis.org (Under “Current Topics”). Please consult this for more of the story.

How do our rates compare to other cities in our region, and how will they compare in 2016? Davis water rates have been well below the Northern California average for decades. This fact was pointed out in the 2009 water rate survey prepared by the California-Nevada Section of the American Water Works Association, the most recent of its kind.

Just like us, many cities in the study are increasing their rates to modernize water systems and meet wastewater discharge requirements. Given that fact, we are confident Davis’ average rates will remain very near — or likely below — those of our Northern California cohort, even come 2016.

The City Council has expressed its strong intent to provide information and programs that assist ratepayers with conservation to help minimize rate impacts. We are also moving toward a system of monthly billing so ratepayers can more easily manage their water use.

Most importantly, the City Council will have the opportunity to refine rates each year. This is particularly relevant because construction and operation costs for the regional surface water facilities will be finalized next year. Construction bids are at historic lows, and a favorable bidding climate should work to our advantage.

Other cost-savings measures are being employed. Keeping costs down has been of paramount concern during the consideration of alternatives, environmental review, and now project design. By partnering with Woodland, we are spreading the costs of construction and operations over more users, realizing otherwise unattainable economies of scale. By teaming with Reclamation District 2035 on a shared water intake facility on the Sacramento River, we will pay only 20 percent of the cost of that facility.

For the regional facilities, the Woodland-Davis Clean Water Agency is following national best practices for a design-build-operate process, ensuring highly competitive bidding. We are aggressively pursuing state and federal grants and already have been successful as part of the effort that secured $1.2 million in Bureau of Reclamation funding for the joint intake.

The new system will be poised to meet future regulatory requirements with upgrades that cost far less than our well-only system could offer.

In total, these cost-saving measures afford us excellent long-term protection and provide opportunities to reduce the level of future rate increases.

Our new water system is well planned for cost control, quality and reliability, and it reflects our values by ensuring that we will comply with environmental regulations and cease the overuse our groundwater resource. The time for this project is now; there will be clear disadvantages and costs if we delay.

— Mayor Joe Krovoza and City Councilman Stephen Souza serve on the board of the Woodland-Davis Clean Water Agency, a joint powers authority of the cities of Davis and Woodland. Founded in 2009, the agency is responsible for delivering a reliable water supply to both cities by 2017. Learn more at www.wdcwa.com

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