Council asks WAC to revisit water rates

By Tom Sakash
From page A1 | December 12, 2012 | Leave Comment

With the clock winding down on a decision on Davis’ new water rates, the City Council once again chose Tuesday to lean on its Water Advisory Committee for advice.

The rate increases and a corresponding rate structure for the future are needed to pay for a proposed $113 million surface water project, which will go before the voters in March. The Woodland-Davis Clean Water Agency project will siphon water from the Sacramento River, treat it and pump it to the two cities.

Davis and Woodland need the surface water, complementary to their ground water supplies, to meet drinking water standards set by the California Regional Water Quality Control Board.

The council voted 4-0 at its meeting, with Councilman Brett Lee abstaining, to ask the WAC to look at two basic fixed-rate models, rather than the Loge-Williams model the committee recommended last month, and to analyze a five-year rate schedule based on those models.

Lee abstained because he didn’t want to limit the committee in its options for choosing a rate structure.

Essentially, the committee, which meets Thursday to hash out the rate issue once and for all, will tell the council what residential water rates should look like for the next five years while the city pays off the project.

Those rates depend on the type of rate structure the city chooses to adopt.

If nothing else, it was clear Tuesday that among the options presented by city engineers, the untested consumption-based fixed rate model drafted by WAC members Frank Loge and Matt Williams was not one the council wanted to pursue, given its complexity and the potential difficulty of explaining it to ratepayers.

“We have to be looking at the overall big picture,” Councilwoman Rochelle Swanson said. “We’re trying to balance being able to have good financing, but it’s also about people feeling confident and comfortable that they know what they’re getting, so they’re not pushing back against it, so that the water project is not getting voted down because of the rates.”

Loge and Williams’ system would charge customers a fixed rate to recover the city’s infrastructure costs based on previous water consumption history.

Ratepayers also would continue to pay for the water they use by the gallon, or on a sliding scale through an inclining block tier structure. A third basic fixed fee would be called a “readiness to serve” charge.

Mayor Joe Krovoza appeared to be the only member of the council comfortable with moving forward with the untested rate structure, but in the end he agreed, in the interest of clarity, that the city should hold off on implementing it.

Mayor Pro Tem Dan Wolk made the motion to direct the Water Advisory Committee to go back Thursday and look at two types of basic fixed rate structures to determine water rates for the next five years.

Wolk said he would rather that the city, for now, implement a “tried and true” system that is more familiar to residents.

“I think there’s a lot of great merit to the (Loge-Williams model), but I feel that for the reasons that we’ve mentioned that there may be a better way,” Wolk said.

The first model he suggested is the most commonly used structure in California. It’s a fixed rate structure that charges customers a flat fee determined by water meter size and then a variable fee on an inclining block, three-tier scale based on how much water a customer uses per month.

The city of Davis uses this type of structure for its existing water infrastructure needs, but with two tiers of water users, rather than the proposed three.

Bartle Wells Associates, the city’s rate consultant, recommended this structure to the council as its best option moving forward and projects that, using this structure, the average single-family homeowner would pay about $100 per month by 2018.

The second option Wolk offered was a uniform block rate structure where, regardless of how much water the customer uses, the price per gallon never changes. The flat fee for fixed charges portion would not differ from the tiered model.

Bartle Wells says this is the second most common rate structure in the state and that the average single-family homeowner would pay about $117 per month for water under it.

Wolk tacked on to his motion that, regardless of what structure the city eventually settles upon, after two years the City Council would reassess the rate structure and potentially look at the Loge-Williams model.

The City Council must finalize rate increases and a rate structure to send out with Proposition 218 notices by Jan. 15 so it can have rates in place in time to pay for the surface water project.

But before the city of Davis can pursue the project, it must be approved through a public vote.

Measure I ballots will be sent to all registered voters in Davis on Feb. 4 and are due back to the Yolo County Elections Office by March 5. A majority of affirmative votes are needed to permit the City Council to move ahead with the project.

— Reach Tom Sakash at tsakash@davisenterprise.net or 530-747-8057. Follow him on Twitter at @TomSakash