Thursday, October 2, 2014
YOLO COUNTY NEWS
99 CENTS

Water committee recommends untested rate structure to bill ratepayers

By
From page A1 | November 16, 2012 |

Going first. It just seems to be the Davis way.

The Water Advisory Committee voted 8-2 Thursday to recommend a consumption-based, fixed-rate water structure to the City Council, a revolutionary way for public agencies to bill ratepayers to recover the fixed costs of its water utility system.

It’s so revolutionary, in fact, that the structure, which actually was invented this year by WAC members Frank Loge and Matt Williams, has never been tried before in California.

But while that didn’t stop the committee from eventually voting for the structure, it took almost three hours of heated debate over multiple types of billing systems to finally reach near-consensus.

The Loge-Williams system works by tracking how many gallons of water a customer uses in the previous year, comparing that amount to how much the rest of the residents in the city used and then charging the customer for their percentage-use of overall water consumption.

This, however, only determines the majority of the fixed costs, or the costs of physical water utility system.

In addition to the CBFR, residents would be charged a variable rate through an inclining tiered structure to pay for the actual water they use.

There would also be a base fixed fee that the city’s rate consultant calls a “readiness-to-serve” fee that residents have to pay simply for access to the system, regardless of how much water they consume.

So, to simplify the entire structure, if there were 100 water customers in Davis and the city water system’s fixed costs were $100 per year after the meters were accounted for, a customer who used five percent of the overall water the previous year would pay $5 for their fixed costs.

Then, they’d pay a certain amount per gallon of water consumed, plus a nominal base fixed fee for their water meter.

Extrapolate that by a $116 million surface water project, 16,000 ratepayers in Davis, other infrastructure improvements that need to be made and stretch it out over five years, and the result is the rates that residents will see when they open up their water bills in the coming years.
That is, if residents approve the project through a public vote in March.

But the complexity of the recommended structure has city staff concerned.

Ratepayers will be asked to approve the structure and the corresponding rates through the Proposition 218 process where the city sends out notices informing them of proposed rate increases and the structure by which they will all be charged.

Normally a simple one-sheet explanation, city staff members have expressed that residents could very well turn down the structure because they don’t understand it. The complexity of the structure could also make it eligible for legal challenge.

If the rates aren’t approved by the public, or if a court deems them unlawful, the city will not have the revenue stream the fees produce to pay for the surface water project.

“If the city chooses to move forward with using this model, we will need to work on the language in the Prop. 218 notice regarding the basis upon which the fees were calculated,” wrote Best, Best & Krieger’s Kelly Salt in her analysis of the structure in an email to the committee.

Salt said that the language Williams and Loge have in their explanation needs to clearly state which component of the structure, the innovative CBFR part, the base fixed rate and the variable rate, pays for what part of the water utility.

The other concern the city has, as Doug Dove of Bartle Wells Associates — the city’s rate consultant — said Thursday, is that an untested system could harm the quality of financing it receives from creditors to pay for the project.

This essentially could mean higher interest rates to pay off the debt service and subsequently higher water rates.

“The rating agencies aren’t going to be looking at that favorably if we have a rather new, rather innovative, yet untested rate design going forward,” the city’s General Manager of Utilities, Development and Operations, Herb Niederberger, told The Enterprise last week.

Davis, in the past, has billed ratepayers with an inclining tier structure where all customers pay a flat fee for fixed costs based on the size of their water meters — regardless of how much water they use — and a variable fee based on water consumption.

According to the city’s rate consultant, the tiered water rate system is the most widely used in California. And it has well-established industry standard language that appears on the Prop. 218 notices.

In the end, the decision falls to the City Council, who must make a decision on the rate structure before it sends out Prop. 218 notices in January.

If the council opts to go with the advisory committee’s recommendation, it will be up to the city’s legal staff to develop language that is clear enough for ratepayers to understand.

“We do think there’s a lot of benefits to it,” said City Attorney Harriet Steiner at the meeting. “But we do need to make sure that (the language) is tight as it goes forward.”

Perhaps the most stirring argument of the night for the Loge-Williams plan came from committee member David Purkey, who urged his colleagues to push Davis into the forefront of this innovative idea.

“Nothing about this project we’ve done is innovative,” Purkey said. “(But) this is Davis. This is something for us to do, something innovative, and if someone is going to innovate this type of reform … I think that we should be the ones to do it.”

Committee member Alf Brandt, a water resource law expert in the Legislature, said that the question of proportionality for fixed rates has confounded the industry for years, but that the structure Williams and Loge have developed could change that throughout the state.

“From people I respect, people who know water and know Prop. 218 inside and out, lawyers that are experts in this field say this could work,” said Brandt, who originally did not vote for it because he was afraid of the legal challenges it presented. “It’s very intriguing to me.”

Others also were skeptical.

Committee member Michael Bartolic said he was not comfortable with voting on something he did not fully understand. Bartolic left the room before the final vote was taken.

In the end, committee members Mark Siegler, Bill Kopper, Helen Thomson, Steve Boschken, Jim West, Jane Rundquist, Purkey and Brandt voted in favor of the structure. Committee chair Elaine Roberts Musser and member Gerry Adler voted against it.

The city produced sample rates for the committee members to look over Thursday that could come as a result of the rate structure.

Starting on May 1, the average single-family home would pay $6.96 as its base fixed fee, $37.08 for the CBFR fee based on an average of 18 hundred cubic feet of water the previous year and if they used 24 ccf for the month, $11 for their variable water usage.

This would result in a monthly water bill of $55.04. (Eighteen ccf is about average for single-family homes in Davis.)

By 2018, using the same amount of water use, the average bill would be about $145.51.

— Tom Sakash at tsakash@davisenterprise.net or 530-747-8057. Follow him on Twitter @TomSakash. Follow all Davis water news using #daviswater.

Comments

comments

Tom Sakash

Tom Sakash covers the city beat for The Davis Enterprise. Reach him at tsakash@davisenterprise.net, (530) 747-8057 or @TomSakash.
  • Recent Posts

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

  • .

    News

    Davis, discovered

    By Fred Gladdis | From Page: A1 | Gallery

     
     
    Sunder wants to expand opportunities for all

    By Jeff Hudson | From Page: A1

    CalPERS members: Here’s how to choose Sutter Health

    By Enterprise staff | From Page: A2

     
    Standing In: Sponge baths, and other perils of the restaurant biz

    By Special to The Enterprise | From Page: A2

     
    At Davis intersections, let’s be careful out there

    By Kim Orendor | From Page: C2 | Gallery

    Oktoberfest features Grand Isle Fire Brigade

    By Enterprise staff | From Page: A3

     
    Sunder supporters gather on Sunday

    By Special to The Enterprise | From Page: A3

    Trokanski discusses new project on ‘Davisville’

    By Special to The Enterprise | From Page: A3

     
    Learn more about Boy Scouts during upcoming events

    By Anne Ternus-Bellamy | From Page: A3

    Third-graders face high-stakes reading targets

    By The Associated Press | From Page: A3

     
    Learn how to ride a bike in Davis

    By Enterprise staff | From Page: A3

    Feinstein, Boxer depend on red-leaning Senate races

    By San Francisco Chronicle | From Page: A3

     
    Gallery hosts poetry night

    By Special to The Enterprise | From Page: A3

    Parenting advice on radio show

    By Special to The Enterprise | From Page: A4

     
    Archer event set for Sunday

    By Special to The Enterprise | From Page: A4

    Per Capita: Tales from the back burner

    By John Mott-Smith | From Page: A4

     
    Sunflower power at the Winters Community Library

    By Enterprise staff | From Page: A4

    Tour gives opportunity to watch moonrise in the bypass

    By Special to The Enterprise | From Page: A4 | Gallery

     
    UC campuses aim to be more inclusive to LGBT students

    By Special to The Enterprise | From Page: A4

    Register to vote by Oct. 20

    By Enterprise staff | From Page: A4

     
    Check out Soroptimists at info night

    By Enterprise staff | From Page: A4

    Helping disabled ag workers stay in agriculture

    By Special to The Enterprise | From Page: A4

     
    Energy plan calls for big renewables projects in state’s deserts

    By San Francisco Chronicle | From Page: A5

    Election programming available through Davis Media Access

    By Special to The Enterprise | From Page: A5

     
    Yolo County flu vaccination clinics ready for the season

    By Enterprise staff | From Page: A5

    Junior high students invited to math festival

    By Anne Ternus-Bellamy | From Page: A5

     
    Shelter volunteers take on play time, poop detail

    By The Associated Press | From Page: A5 | Gallery

    Unitrans persists through changing times

    By Lily Holmes | From Page: C6 | Gallery

     
    Farmers Market hosts Fall Festival

    By Special to The Enterprise | From Page: A8 | Gallery

    School spending by rich parents widens wealth gap

    By The Associated Press | From Page: A8 | Gallery

     
    Up for a fun day trip? Take a bike to Bike Dog

    By Elizabeth Case | From Page: C8 | Gallery

    Volunteers are trained to help with train questions

    By Bob Schultz | From Page: A10 | Gallery

     
    There are plenty of fun activities around town

    By Enterprise staff | From Page: C13 | Gallery

    Getting from here to there by buses, planes and trains

    By Special to The Enterprise | From Page: C14 | Gallery

     
    .

    Forum

    Feeling shunned after tragedy

    By Creators Syndicate | From Page: B5

     
    Climate change is coming for you

    By Letters to the Editor | From Page: A6

    A true vision for peace

    By Letters to the Editor | From Page: A6

     
    Drivers, just follow the rules

    By Letters to the Editor | From Page: A6

    Let’s fix the park deck

    By Letters to the Editor | From Page: A6

     
    ‘Maupin’s Law’ 2.0: Prevention is better than punishment

    By Special to The Enterprise | From Page: A6

    Tom Meyer cartoon

    By Debbie Davis | From Page: A6

     
    Choose Archer, Sunder, Adams

    By Letters to the Editor | From Page: A6

    Barbara Archer for school board

    By Letters to the Editor | From Page: A6

     
    Vote for change on board

    By Letters to the Editor | From Page: A6

    Poppenga considers all students

    By Letters to the Editor | From Page: A6

     
    .

    Sports

     
    Despite 168 points allowed, PSU defense may not be lousy

    By Bruce Gallaudet | From Page: B1 | Gallery

    Bumgarner, Crawford help Giants slam Bucs

    By The Associated Press | From Page: B1 | Gallery

     
    Cheung paces Devils past Pacers on the pitch

    By Evan Ream | From Page: B1 | Gallery

    DHS JV runners shine in varsity events

    By Enterprise staff | From Page: B2

     
    Youth roundup: Diamonds swing to victories at Vineyard Classic

    By Enterprise staff | From Page: B2 | Gallery

     
    Sports briefs: DHS girls tennis goes three for three

    By Enterprise staff | From Page: B8

    .

    Features

    Davis robotics team pays it forward

    By Anne Ternus-Bellamy | From Page: A7 | Gallery

     
    .

    Arts

    Natsoulas to host mural conference

    By Special to The Enterprise | From Page: A9

     
    Wineaux: Picking the last rosé of summer

    By Susan Leonardi | From Page: A9

    Odd Fellows to screen classic Westerns

    By Enterprise staff | From Page: A9

     
    Robbie Fulks will visit ‘Live in the Loam’ on KDRT

    By Enterprise staff | From Page: A9

    Old Macs get new life at art exhibit

    By Enterprise staff | From Page: A9

     
    Woodland Opera House rounds up cowboy poetry, music

    By Enterprise staff | From Page: A9

    Music for brass, choir and organ set at DCC

    By Enterprise staff | From Page: A9

     
    .

    Business

    .

    Obituaries

    Anne Elizabeth Elbrecht

    By Special to The Enterprise | From Page: A4

     
    .

    Comics

    Comics: Thursday, October 2, 2014

    By Creator | From Page: B6