Throughout the Great Water Rate Debate of 2011, 2012 and now 2013, the often-cited and frequently misunderstood Proposition 218 has been looming over the proceedings like the home plate umpire in the seventh game of the World Series.
Proponents of the Surface Water Project and the resultant spike in rates say they have complied with both the letter and the spirit of Prop. 218. Opponents of the Surface Water Project claim the rate structure the city of Davis plans to impose on the citizens of this town violates several key components of Prop. 218.
As lawn signs sprout like daffodils, op-eds gobble up precious space in the newspaper and brochures land on our front porches, it’s hard to know who to believe.
Prop. 218, which reads like a ratepayer’s bill of rights, lays out in detail what a city can and can’t do with a variety of taxes, assessments and fees, including water rates.
The city of Davis, for instance, is not allowed to make a profit on the water it sells to its ratepayers. It’s also not allowed to pave potholes in East Davis with the money it collects from its water customers.
This brings us to a critical element of Prop. 218 known as “proportionality.” To quote directly, “The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel.”
In other words, if the city has 100 water customers and you use 2 percent of the water delivered to those customers, the city can charge you up to two percent of the total cost, but no more.
Prop. 218 further emphasizes this point by saying “Revenues derived from the fee or charge shall not exceed the funds required to provide the property related service.”
Again, the city can’t charge you more for a gallon of water than it actually costs the city to deliver that gallon of water to you specifically.
And it also warns the city that “Revenues derived from the fee or charge shall not be used for any purpose other than that for which the fee or charge was imposed.”
The easiest way for the city to comply with the requirements of Prop. 218 is to charge each customer a fixed rate per gallon and be done with it. You use a gallon, it costs you a dollar. You use 100 gallons, it costs you $100. This guarantees that all water users will pay their “proportional” cost of the service.
For unexplained reasons, however, the city has come up with a three-headed monster known as the Consumption Based Fixed Rate (CBFR) that calculates the majority of your next year’s bill based strictly on the water you used the previous summer.
And once that rate has been established it sticks to you like Elmer’s Glue for the next 12 months, even if you use no water at all during that time period.
The city has yet to explain how this “look-back” feature of the CBFR even remotely complies with the “proportionality” requirement of Prop. 218.
Fortunately for all of us, I have in front of me the very rates the city intends to impose upon the ratepayers of Davis over the next five years.
And to put those rates into real terms, I will use the citywide average water use of 15 ccf per month, which translates into 180 ccf per year.
To put a face to all this, we’ll use five hypothetical Davis citizens who all use 180 ccf per year and compare their rates. If the city’s rate plan is truly “proportional,” all five ratepayers should have the exact same annual bill because all five are each using 180 ccf of water per year.
This is where things get interesting.
Just like snowflakes, no two Davis households are alike. Depending on individual patterns, some will use more water in winter, some will use more water in summer and some will use more water when Grandma visits for Thanksgiving. Which is why for purposes of this example, we’ll take into account an entire year, a year in which each of the five households uses the same 180 ccf of water.
You should know as we go through the calculations that under the CBFR, summer is defined as a six-month period beginning May 1 and ending October 31.
Ratepayer No. 1, let’s call him Joe, spends his summers in the south of France, but uses large quantities of water in the winter bathing in the large soaking tub in his bathroom on our bone-chilling foggy nights because the city won’t let him use his fireplace. He uses just 30 ccf during the six summer months, but 150 ccf in the winter for a total of 180 ccf annually.
Joe’s annual water bill in 2018, the fifth year of the city’s plan: $596.04.
Ratepayer No. 2, Dan, put in a rock garden and cactus long ago and uses 60 ccf in summer and 120 ccf in winter, again for an annual total of 180 ccf, just like Joe.
Dan’s annual water bill in 2018: $790.44. This, despite the fact he uses the exact same amount of water annually as Joe.
Ratepayer No. 3, Brett, is Mr. Steady Eddie, using the Davis average of 15 ccf per month year round, 90 in summer and 90 in winter.
Brett’s annual water bill in 2018 for the identical water use as Joe and Dan: $984.84.
Ratepayer No. 4, Lucas, loves to garden in the summer and values a healthy green lawn and his prized apricot tree. He uses 120 ccf in summer and 60 ccf in winter.
Lucas’s annual water bill in 2018 for those same 180 ccf: $1,179.24.
And finally, Ratepayer No. 5, Rochelle, lives on a large lot with six kids who love to run through the sprinklers on our 105-degree summer afternoons. She uses 150 ccf in summer and 30 ccf in winter.
Rochelle’s annual water bill for 2018: $1,373.64, a whopping $777 a year more than Joe for the same amount of water. Turns out Rochelle is paying an average of $7.63 per ccf while Joe is paying only $3.31 per ccf.
Keep in mind that each of our five ratepayers used the exact same “proportion” of water (180 ccf) during the course of a year. The only difference is that their use pattern varied, which is what one would expect in a diverse and interesting community.
The fact their bills vary so wildly for the same amount of water is proof positive Prop. 218’s requirement of “proportionality” is violated by the CBFR rate structure. Dramatically so, in fact.
And for those naysayers who are so in love with the project that they can’t tell fact from fiction, be assured that these figures were double-checked — to the penny — with the city of Davis official in charge of calculating such rates.
If this thing ends up in court, as it no doubt will, the city won’t have enough attorneys to explain how it costs $1,373.64 to deliver 180 ccf to Rochelle but only $596.04 to deliver the exact same amount of water to Joe.
But good luck trying.
— Reach Bob Dunning at email@example.com