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Initiative could put water rates up for vote

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From page A1 | July 25, 2013 | 10 Comments

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Even more pressure has been applied to the city this week and the water utility rates it approved earlier this year to pay for the surface water project.

Not only was the city’s legal team denied a chance Wednesday to speed up the ruling on the lawsuit that’s been lodged against the rates — important for city officials because they want to approach lenders without litigation tied to the rates in order to pick up the best possible financing for Davis’ $111 million share of the surface water project — but it also learned Tuesday that an initiative was filed by community members to repeal the rates altogether.

The initiative was drafted by Davis residents Pam Nieberg and Ernie Head, both of whom were proponents of the referendum campaign that overturned the first water rate hike the council adopted in 2011. Those rates also were approved by the council to pay for the now scaled-down and cheaper Woodland-Davis Clean Water Agency surface water project.

If Head and Nieberg collect more than 1,161 valid signatures — or 5 percent of those in Davis who voted in the last gubernatorial election — the rates likely would be placed on the next general election ballot for a public vote.

Once the city releases a title and summary in the next few weeks, Head and Nieberg will have six months to collect the signatures.

The two Davis residents say they want to suspend the rates because they charge ratepayers unfairly, specifically pointing to the consumption-based fixed rate model the council approved, and because they believe the drastic rise in water rates will have adverse financial impacts on the community, among other reasons.

Head told The Enterprise Wednesday, meanwhile, that he also hopes the initiative stops the city from moving forward with the surface water project.

“I hope it kills the surface water project,” Head said. “That’s been a mess since Day One. I don’t think we need it and I think it’s too expensive. … (The initiative) takes the money away from (the city), so how are they going to (build the project) if they don’t have the money?”

The City Council adopted a five-year rate hike in March that will triple water bills during the next half-decade. The first increase kicked in May 1 with subsequent increases on the way over the next five years.

Davis voters approved the water project, which the rates were raised to pay for, in March by a 54.1 to 45.9 percent margin, but project opponents have criticized the election because the ballot didn’t include the rates.

Mayor Pro Tem Dan Wolk said Wednesday that rehashing this issue would not be in the best interest of the community.

“This is just the latest in a long string of attempts to block our community’s access to clean surface water,” Wolk said in a statement. “These concerns about rates were thoroughly vetted by our Water Advisory Committee and exhaustively debated during the Measure I election. The community voted in favor of the project despite these objections.”

Davis City Attorney Harriet Steiner said Wednesday that even if the initiative collects enough valid signatures and successfully repeals the rates through the public vote, the council could simply restart the Proposition 218 process at any time and raise the rates necessary to continue paying for the water project.

City denied

Complicating the issue even further, Yolo Superior Court Judge Dan Maguire ruled against Steiner’s motion Wednesday to bifurcate the proceedings of the lawsuit that claims the city’s water utility rates are illegal under state law.

Maguire said that the bifurcation would not result in a more efficient judicial process, as the city had argued in its motion.

Steiner had hoped that by pushing up the ruling on the water rates, the city would be clear of the litigation and able to reap the best possible financing terms on the bonds it needs to pay for the water project as soon as possible.

Instead, the court ruled that the entire suit will be heard in December after several initial hearings to work out other procedural details.

Steiner said that the city is pleased to have a hearing date scheduled, but if the city takes out loans to pay for the project before then, creditors likely won’t offer up their best interest rates.

“The good part is we’ll get a ruling on everything all at once,” Steiner said. “The reason we wanted to bifurcate was to get a ruling as early as possible … (but) it may not quite jibe with the best schedule we’d love to have.”

City officials also say that with litigation hovering over the rates — aside from receiving less than optimal interest terms — it also could preclude the city from making a public offering, which, compared to a private offering, could save the city more in the end.

Pinkerton said last week that if the city can’t shake the lawsuit, the city may only bond out for the first year of the project’s costs this year, potentially leaving the city and its ratepayers vulnerable to cost increases, as interest rates could rise over the next year or so.

“This could cost the ratepayers millions and millions of dollars,” Pinkerton said.

Michael Harrington, the attorney representing the Yolo Ratepayers for Affordable Public Utility Services — the group suing the city — maintains that the city put itself in the position to incur more costs by moving forward with the rates despite the pending lawsuit.

The lawsuit alleges that the water rates the city adopted in March are illegal under Proposition 218, as they disproportionately charge ratepayers for the water they consume. The suit also alleges the city unlawfully fails to pay for the water it uses, among other charges.

Harrington also said Wednesday that he’s requested to have settlement discussions with the city that could resolve the suit before December.

“The plaintiffs want a global settlement,” Harrington said. “We want the rates to be fixed and we want them on the ballot.”

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

Tom Sakash

Tom Sakash covers the city beat for The Davis Enterprise. Reach him at tsakash@davisenterprise.net, (530) 747-8057 or @TomSakash.
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Discussion | 10 comments

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  • Will ArnoldJuly 25, 2013 - 2:33 am

    Here we go again... These same folks argued to the WAC that the project costs too much and that CBFR is unfair. They lost. They argued to Council that the project costs too much and that CBFR is unfair. They lost. They argued to the voters that the project costs too much and that CBFR is unfair. They lost. They are now arguing in court. They've had their opportunity to get their message out and have it considered by every relevant public entity, including a city-wide vote. At every turn they have not been successful. Now they want yet another bite at the apple hoping the fifth (or sixth) time is a charm. It is an insult to our democratic process and to our intelligence as voters. I sincerely hope my fellow community members will see it for what it is, an attempt to subvert the will of the majority by a small minority bent on killing this project.

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  • GrantJuly 25, 2013 - 8:23 am

    You are not entirely fair in your criticism, Will. There are people in this town who did like the idea of securing a more permanent water supply, but were not in agreement with the funky rate system. Unfortunately, we were not given a choice on that, and some folks no doubt voted for the project in hopes that the rate system would be addressed and possibly changed. I remember discussing this with you at a Farmer's Market rally, and you agreed with me. How about a vote on JUST the rate system - CBFR or flat usage rate. I suspect you would not get a majority in favor of CBFR.

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  • AmenJuly 25, 2013 - 2:13 pm

    Amen, William. Democracy has spoken. It is time to move on. Grant, after the additional vote on the rate system, why don't we have an additional vote on the design of the water treatment plant, then we could have a vote on the pipelines from the plant, and then we could have another vote on the type of paper we use for the water bills. That way, everyone who ever had any opinion on the water treatment plant could be fully heard.

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  • GrantJuly 25, 2013 - 3:34 pm

    Amen - I'm not talking about tiny details here. You have to admit, the CBFR model was and still is very controversial. Many people voiced their concerns about it, even folks on the 'yes' side of Measure I, but there was so much pressure and threats that we were going to run out of water if the project wasn't passed, I think many folks voted 'yes' despite their dislike of the CBFR model, and wound up feeling disenfranchised as voters. 54% is hardly a landslide victory. If even 5% of the 'yes' voters wanted the project but not the CBFR, then the MAJORITY of voters are not in favor of the CBFR model. It may be the latest trendy rate model, but you cannot tell me it is fair. What's fair is a set rate that I can count on everyday of the year. While I don't necessarily agree with the litigators' hopes of destroying the whole project, I applaud their effort to change the rate structure.

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  • Stephen SouzaJuly 25, 2013 - 6:43 am

    For the Love of God, Really?

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  • ScottJuly 25, 2013 - 12:02 pm

    There's a reason that you were not re-elected.

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  • And...July 25, 2013 - 2:16 pm

    ...and replaced by city council members in FAVOR of the water treatment plant....(No, wait a second, that logic doesn't quite work...)

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  • M. KilleenJuly 25, 2013 - 11:14 am

    Just out of curiosity: when the vote was taken, the figure of $113 million was used. Within the past month, the Council was talking about $151.5 million. Now we are hearing $111. Where are all the differing figures coming from? The escalating rates will be based at least in part on the cost of the project (and the few people who cannot opt out of it to pay for it). It does matter greatly to those who are fiscally conservative and who also want our city to survive financially.

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  • Tom SakashJuly 25, 2013 - 11:33 am

    That's a good question and I should be more clear about it in the future. As I understand it, when the vote was taken in March, the cost to Davis was $113 million (not including the operational costs the city will be on the hook for once the project is finished, which will run about $9.5 million per year I believe split between Davis and Woodland). But then, the water agency board altered the request for proposal documents, requiring bidders -- or now just CH2M hill -- to submit proposals under a certain dollar amount. At the time of that change, the agency claimed it would reduce overall construction costs by 10 percent. The math apparently doesn't translate to 10 percent off that $113 million, however. If that were true, the costs to Davis would be roughly $100 million rather than $111 million. But in any case, the costs that the agency general manager has presented recently are $110.9 million to Davis and $237 million total for construction.

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  • Katie BlackJuly 25, 2013 - 8:18 pm

    I'm with Souza...and Will Arnold, this is ridiculous...

    Reply | Report abusive comment
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