Friday, August 22, 2014
YOLO COUNTY NEWS
99 CENTS

Davis landlords move to soften blow of water rate hikes

Dina Connor, owner of Laundry Lounge, talks with Lily Starling about how a proposed water rate hike may mean higher prices for customers. Starling brings her massage therapy business’ laundry to be done there. Wayne Tilcock/Enterprise photo

By
July 30, 2011 |

Davis business owners have reason to worry about the city’s proposed water rate hikes, especially since most don’t actually know how much the increases will cost them.

Business owners who rent commercial space for their shop, eatery or professional office don’t get municipal utility rate bills in the mail.

Their landlords do.

And that is why a movement is afoot among a group of commercial property owners in Davis who not only fear how much lighter their wallets will be, but also what the rate hikes will do to the local economy.

While lease terms differ, commercial property owners tend to build utility costs into the rents or recover them in monthly surcharges.

But it doesn’t do them any good if higher rents and surcharges price out their tenants.

“This is what got me saddened: Public Works did not look at the impact on businesses. You could say that’s not their responsibility, but it is the responsibility of the City Council,” said Randy Yackzan, president and co-owner of the Yackzan Group, which develops and manages properties in Davis.

Yackzan and other large-property owners recently started meeting with city staff and council members to see if they could form a citizens’ oversight committee that would evaluate how the rate hikes are implemented.

The city’s current proposal is to ramp up water rates annually over the next five years to fund the Woodland-Davis Clean Water project. The joint project would pipe surface water from the Sacramento River to Woodland and Davis, providing the cities with a reliable and quality water supply.

City engineers estimated that the average household water bill may triple by 2016. Rates may increase by up to 28 percent next year for the average household.

Under Proposition 218, ratepayers may submit written protests by the scheduled public hearing date of Sept. 6. If the city receives protests by at least a majority of ratepayers — more than half of Davis’ 16,402 ratepayers — rates cannot be imposed.

However, the City Council and staff have indicated they would take into account a considerable public resistance even if there is not technically a majority protest.

More time, better ideas

Yackzan said he would like to see the council consider alternative rate structures, such as a 10-year plan. If given the time and opportunity, the citizens’ committee could evaluate possible alternatives and facilitate public participation, he said.

And the citizens’ committee would not be comprised solely of commercial property owners, he said. It would be made up of business owners, school officials, student renters and other stakeholders, he said.

“We support the project, but the proposed rate increases are shocking,” Yackzan said.

Mayor Joe Krovoza said the council welcomes the effort to find creative ways to make the costs less burdensome on ratepayers.

“This is exactly what we hoped to (have) happen through the public vetting of the Prop. 218 process,” Krovoza said, adding, “I’m pleased that they understand the main need for the project (and) the main focus is how we pay for it in a way that is as soft on the community as possible.”

“We’re just discovering these rate increases, although we’ve been talking about this project for 20 years,” Yackzan said.

A year ago, he said, city estimates showed an 18-percent increase for the average household in the first year. Now, it’s 28 percent.

And it’s a whole different story for apartment buildings and other commercial properties.

Yackzan said he expects a water rate increase up to 48 percent for his company’s apartments and more than 50 percent for restaurants in the first year. He would not disclose the cost in dollars, but, he said, it is a lot of money.

“You can’t absorb these kinds of increases immediately,” he said.

In Davis, where there’s a significant population of college students, leases typically lock in rental rates for a year. Additionally, commercial properties are often leased for longer periods of time.

That means property owners who are unable to raise rents right away will suffer a major blow in the first year or two of the water rate hikes, Yackzan said.

Trickle-down effect

Another concern is renters — many of whom are business owners — may not realize what costs are coming their way.

Max Connor, who owns The Laundry Lounge with his sister Dina, said their landlord bills them for utilities, but they don’t know what the breakdown is for water rates versus other charges.

As costs rise, however, they have no choice but to pass the cost down to their customers, Connor said. They may end up increasing the price per pound for wash-and-fold services, he said.

“I’d have to run the numbers to see the exact amount, but, basically, we’re not making a whole lot of money now,” he said, so if water rates are going to rise by a certain percentage, they will probably need to raise the rates by about the same amount just to keep afloat.

Connor said they did not factor in the steep rate increases when they opened their business. If worse comes to worst, they will have to relocate, he said.

“We love Davis and it always pains us when we think about all the people that we would essentially be letting down if we had to leave here,” he said.

The trickle-down effect could hurt the local economy in a big way, especially if business owners are unprepared, said Doby Fleeman, who owns some commercial properties in town with his wife, Jennifer Anderson.

“If you have a hair salon, it’s the cost of the water you’re using; if you have a restaurant, it’s the cost of the water you’re using to wash dishes — at some point, it gets passed along to the consumer,” Fleeman said.

The way Prop. 218 works, only the ratepayer — usually the property owner — is notified of proposed rate hikes, which means many renters are left in the dark, he said.

“I think the idea is to try to get the word to the tenants as soon as possible,” Fleeman said.

Business owners are “concerned, definitely,” said Katy Zane, interim director of the Davis Downtown Business Association.

“In particular, restaurants or salons, those places that use a lot of water are most concerned,” Zane said. The DDBA is hosting a “Brown Bag Lunch” presentation for members about the rate increases at noon Wednesday, Aug. 17, in the River City Bank conference room, 239 E St.

“Our main role is just to provide outreach to the businesses because we’re concerned that a lot don’t know that this rate increase is just around the corner,” Zane said.

The Davis Chamber of Commerce also is planning a presentation at its membership luncheon at 11:45 a.m. Tuesday in the Odd Fellows Hall, 415 Second St.

Comments

comments

  • Recent Posts

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

  • .

    News

    No easy task: History buffs still trying to save building

    By Dave Ryan | From Page: A1 | Gallery

     
    DHS musicians back from summer in Italy

    By Jeff Hudson | From Page: A1 | Gallery

     
    City to overhaul its sprinkler heads, other water-wasters

    By Dave Ryan | From Page: A1 | Gallery

    Davis indecent-exposure suspect pleads no contest

    By Lauren Keene | From Page: A2

     
    Not-guilty plea entered in Woodland homicide case

    By Lauren Keene | From Page: A2

     
    Russian aid convoy reaches war-torn Luhansk

    By The Associated Press | From Page: A2

     
    Yolo County golf tournament enters fourth year

    By Special to The Enterprise | From Page: A3

     
    Putah Creek Council appoints new executive director

    By Elizabeth Case | From Page: A3

    Communitywide ice bucket challenge on Sunday

    By Anne Ternus-Bellamy | From Page: A3

     
    Parents’ Night Out features Vacation Bible School

    By Enterprise staff | From Page: A3

     
    Afternoon tours of city wetlands resume Sept. 6

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

    Prunes take center stage at last agri-tour of the summer

    By Special to The Enterprise | From Page: A4

     
    In need of food? Apply for CalFresh

    By Enterprise staff | From Page: A4

    Can you give them a home?

    By Enterprise staff | From Page: A4 | Gallery

     
    Saylor will meet constituents at Peet’s

    By Enterprise staff | From Page: A4

    Event will unveil mural celebrating food justice

    By Enterprise staff | From Page: A4

     
    Explorit: Final Blast show returns for second year

    By Lisa Justice | From Page: A5

    Wolk bill would require reporting of water system leaks

    By Special to The Enterprise | From Page: A5

     
    Writing couple stops at Davis bookstore

    By Special to The Enterprise | From Page: A5 | Gallery

    Record drought saps California honey production

    By The Associated Press | From Page: A6

     
    World travelers

    By Special to The Enterprise | From Page: A8

     
    Seniors set to stroll through Arboretum

    By Enterprise staff | From Page: A9

    .

    Forum

    Weightlifters causing a racket

    By Creators Syndicate | From Page: B5

     
    No support for militarization

    By Letters to the Editor | From Page: A10

    A better use for this vehicle

    By Letters to the Editor | From Page: A10

     
    Police are our friends, right?

    By Letters to the Editor | From Page: A10

    Wage plan has a big flaw

    By Letters to the Editor | From Page: A10

     
    Bridging the digital divide with computational thinking

    By Special to The Enterprise | From Page: A10

     
    Tom Meyer cartoon

    By Debbie Davis | From Page: A10

    .

    Sports

    Watney and McIlroy struggle at start of The Barclays

    By Wire and staff reports | From Page: B1

     
    Light-hitting Cats fall

    By Enterprise staff | From Page: B1

    Giants win nightcap in Chicago

    By The Associated Press | From Page: B1 | Gallery

     
    Watts likes what he’s seen in keen Aggie DB competition

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    Sports briefs: Big West soccer coaches have high hopes for UCD men

    By Enterprise staff | From Page: B8 | Gallery

    .

    Features

    .

    Arts

     
    Davis Chinese Film Festival to kick off with 1994 favorite

    By Enterprise staff | From Page: A11

    Rock Band campers perform at E Street Plaza

    By Enterprise staff | From Page: A11

     
    Natsoulas to host mural conference

    By Special to The Enterprise | From Page: A11

    Yolo Mambo to play free show

    By Enterprise staff | From Page: A11

     
    ‘If I Stay’: Existential angst

    By Derrick Bang | From Page: A11

    .

    Business

    Car Care: Teenagers not driving safe cars, study shows

    By Special to The Enterprise | From Page: A6

     
    Car Care: Feeling the summer heat? Your car battery is too

    By Special to The Enterprise | From Page: A7

    Three-wheeled Elio gets closer to going on sale

    By The Associated Press | From Page: A12 | Gallery

     
    .

    Obituaries

    .

    Comics

    Comics: Friday, August 22, 2014

    By Creator | From Page: B6