My View: Water Rates and Who Got It Right

water-rate-iconAn argument was made on the Vanguard yesterday with regards to CBFR. I do not believe this to be a moot point here. There are still some decisions that will be made about rates and future lawsuits that have a strong bearing on this.

Michael Harrington wrote on Friday, “Bob got it right with the surface water project and rates. From January 2013 on, he hammered the CBFR look back, and the sky high summer rate differential. He also got it right in the fall 2011 water referendum’s demand to vote on the rates.”

There is a view in this that everyone believed that CBFR was good, except for a small group of people led by Michael Harrington and Bob Dunning, and that they ultimately proved to be correct.

But that is a somewhat revisionist view. First of all, while CBFR was by no means perfect, it did represent a dramatic improvement over the 60-40, traditional rate model proposed by Bartle Wells back in December of 2012.

On the issue of equity, at the time we noted that at the 10th percentile, the ratepayer would be paying $5.50 per ccf under the Bartle Wells inclining rate structure compared to $2.01 for the 90th percent user. Under a CBFR model ,that ratio fell to $3.58 per ccf at the bottom to $2.26 at the top.

Note that the change improved the model for the bottom 70% of ratepayers and didn’t exactly kill the top end.

What emerged ironically was an attack on CBFR led by Bob Dunning. People got so irrationally freaked out by the idea of a look-back, which Dunning argued had a huge flaw in it because it distorted the message between the “punishment” (increased summer rates) and the treatment (conservation).  However, overall it would have meant huge savings and greater equity to most ratepayers.

Conversely, the Bartle Wells alternative would have greatly harmed most ratepayers, even if it installed assurances of simplicity under the guise of “fairness” that really wasn’t very fair.

CBFR-ratios

This equity chart helps us note what happened. Under a 60-40 rate structure the bottom rate payers paid 2.77 times more per unit than the top rate payers. CBFR did not fix that completely but dropped it to 1.5 times or 50%.

The recently proposed Lemongello-Williams model only marginally improved upon the ratio of low to high users, instead, the greatest equity it instilled was in the ratio of SFR to apartments. CBFR disadvantaged SFR when compared to apartments, increasing the ratio from 1.2 to 1.43, which was due to the fact that apartments have a lower water demand in the summer months because they do not irrigate as much as SFRs do. The Lemongello-Williams proposal reduced the distortion down to 6% and the rate that Council enacted, the Bartle Wells version of 87-13 that was aligned with the Bartle Wells Rate Study Update, reduced it from 42% (under CBFR) down to 17%.

Interestingly enough while the Lemongello-Williams proposal slightly lowered the ratio of large to small users down to 47.6% from 50%, the Bartle Wells model that has been adopted increased that slightly from 50% to 59% because they included the costs of meter replacements into the fixed fee.

Going from CBFR to 87-13 was not about the ratio of small users to large users, but rather about the ratio of single family residents to apartments, which was in large part a response to one of the core arguments of the Yes On Measure P supporters (see http://www.davisenterprise.com/forum/opinion-columns/yes-on-p-davis-water-rates-need-a-do-over/)

These numbers in the OpEd and the chart above demonstrate that the Measure P fight was not about saving low end users either in single family homes or in apartments, but rather about saving high end, summer users.

There is also an interesting addendum to this debate. Mr. Harrington writes, “Bob is usually right on the law, the facts, and the moral side of the railroad tracks that bisect Davis.”

But as Mark West points out, Bob was not correct on his legal advice on CBFR which Judge Maguire declared legal in his decision on the YRAPUS case.

Mr. Harrington writes, “we were going to appeal that water rates decision, but now it’s moot. So we will never know if Bob was legally and conclusively right.”

Mr. West responds, “Sorry Michael, that’s not how our legal system works. If you plead guilty to a lesser charge you didn’t commit in order to avoid defending against a more serious one, you can no longer claim to be innocent as you made the declaration of guilt. Similarly, if you fail to appeal a decision against you in civil court you have chosen to accept the verdict and can no longer claim to be right. You lost, and Bob’s legal opinion was shown to be incorrect. He is still a nice guy, just not a very good lawyer.”

As we go to the history books briefly, Mr. Dunning argued in creating fictitious water users, “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.”

He added with a measure of certainty, “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.”

The argument that Bob Dunning put forward there was included in the brief put forward by the Yolo Ratepayers in the YRAPUS case.  As Michael Harrington and Jon Morse argued on page 9, paragraph 27 of their brief:  “The Loge Williams Rates do not comply with Proposition 218 and are unconstitutional and illegal in that, inter alia, they impose a fee or charge incidental to property ownership which exceeds the proportional cost of the services attributable to the parcel.”

Here they actually cited Bob Dunning’s January 27 column: “An example of one of the arguments favoring Plaintiffs was published on January 27, 2013 by local notable columnist Bob Dunning in the Davis Enterprise, a respected regional publication that researches and publishes stories at the forefront of local political and economic developments.”

They added, “Mr. Dunning did what few have done: he pulled out his calculator, created five hypothetical water account users whose first names coincide with five City leaders, and factually demonstrated using grade school arithmetic how annual charges vary wildly for a uniform amount of annual water used. See, Exhibit ’6,’ a true and correct copy of Mr. Dunning’s Sunday column published January 27, 2013.”

They concluded: “This is but one example of the constitutional deficiencies suffered by this rate structure.”

Judge Maguire then proceeded to quite specifically debunk this argument.  The only thing he did not do was cite Bob Dunning by name when he wrote, “In particular, the plaintiffs construct a hypothetical situation in which a resident uses one extra ccf in the summer, which then causes the resident’s supply charge to be increased in the next year, thereby increasing the resident’s bill even further.”

Judge Maguire continued: “This hypothetical underscores a distinctive feature of the CBFR, which is that the rate is quite sensitive to changes in summer water use. This sensitivity promotes conservation, as does any system in which the rates increase with the volume.”

The plaintiffs, Judge Maguire noted, “[plaintiffs] argue that the CBFR rates discriminate between users, by penalizing users who use more water in the summer.”  He disagreed, however, writing, “there is a good reason, supported by the Administrative Record, to charge more for summer water: the system must be built to handle peak capacity, and that capacity is determined by summer usage.”

So the judge concluded, “So ‘steady’ users, who do not increase their use in the summer, do pay less than typical users, but this variance does not violate proportionality because peak-period demand imposes more costs on the system than off-season demand.”

In so doing, Judge Maguire debunked the central thesis of Bob Dunning’s objection to CBFR, which he framed into the assertion without legal authority that the city violated Prop 218 with these proposed rates.

Mr. Dunning may have won the political argument by scaring citizens into rejecting CBFR, but he did not win the legal argument.

It is interesting to note that in her public comment at the series of Council and URAC meetings on water rates, Sue Greenwald took exception to the whole concept of costs based on peak usage.  Although she laid the blame for the peak-period demand argument at the feet of then-Mayor Joe Krovoza, Sue was in effect saying that Judge Maguire’s arguments in his decision on the YRAPUS case are off base as well.

Another interesting sidebar to this story is the commentary about equity by Mayor Pro Tem Robb Davis at both the July 2nd and July 15th Council meetings.  Those comments focused on the SFR and apartment residents in Davis who will have a hard time paying their increased water bills, which will be higher regardless of what rate structure is adopted.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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32 thoughts on “My View: Water Rates and Who Got It Right”

  1. Anon

    Equity is not the only issue to consider. Peak use, interest rates on debt service, etc. are some other factors that must be taken into account when making a determination on water rate structure.

  2. paul Brady

    I do not believe Maguire was correct on these counts. [A local attorney explained to me that you cannot win a decision when the local politicians – CC and County oppose you. It is too risky for the judge, election-wise. You have to appeal outside of his jurisdiction. Maybe we should appoint judges for life, but subject to recall.]

    Clearly the City was violating P.218 with rates where not all users paid the same per gallon and where the charges for water and revenue produced exceeded the cost of the water. Maguire used an appellate court decision involving three types of wells which were allowed to charge different rates. It had little relevance to the different rates for water users in the Davis case. And in other jurisdictions Prop. 218 has been upheld. He ruled you did not have to meet proportionality or the total cost mandate.

    He agreed with the City that classes of larger users should pay more per gallon as they increased the cost of making the system larger! They also increased peak needs, he agreed. Actually, the larger system, it was shown, produces cheaper water per gallon – as expected from economies of scale. The larger users do pay more as they buy a lot more water! But they should not have to pay more per gallon. In fact, they are subsidizing the small users via the cheaper per gallon water. Also the peak water will, at least partly, be supplied by the deep wells. We are not buying enough river water in the summer to come close to satisfying peak demands. Some summers there may be little or no river water available! Then it will be all or mostly well water!

    UCD coming in and taking 15% of Davis’s water will save us 15% in purchasing and processing costs – about 1/2 a million a year. We will also save on sharing some of the infrastructure they will pay in getting the water through Davis to UCD. In addition, we will save about 10% on the capital cost that UCD will pay. So our annual interest and principal costs will be reduced by about that amount – down to 5-7 million a year depending on interest rates. There will also be savings from shutting down most of the 15 intermediate wells. Besides electricity savings, pumps, pipes and other hardware will help with river water integration, and in the switch-over to shallow wells for parks, etc.

    All in all, total costs are covered by at most a 100% increase in water rates. But the City is asking for increases totaling around 160%!

          1. Matt Williams

            Haven’t seen a louse in a long time … and as a result nary a nit.

            Based on what Judge Maguire said in court (verifiable in the court transcript) it was very clear to me that he thought the appellate court decision was highly questionable, but that his hands were tied, and he was obliged to abide by it.

          2. Mark West

            None of that changes a thing Matt. The Judge’s ruling is correct until the Appeals Court says otherwise, and since he was following a previous ruling from the Appeals Court, what else are we supposed to think but that the Judge was correct? Michael is free to test the waters at the next level, but I suspect he is smart enough to understand that he will lose there as well, especially if he continues to follow Bob’s legal advice.

          3. Matt Williams

            Mark, I have no problem with Judge Maguire’s ruling. He followed the law in making it. I made no assertions that anything needed to be changed. The Court reporter’s transcript and his written opinion are very clear … and I agree with you 100% that his decision stands as correct until such time as an appeals court says otherwise.

    1. Matt Williams

      paul, you have shared these same opinions very often in the past. Do you have any statistical data to support your assertions.

      First, you spoke to one local attorney and got his singular opinion. What makes you think he/she is right and what makes you think he/she is wrong. If you speak to another local attorney, Elaine Roberts Musser is a local attorney for instance, would you get the same opinion as you got from your local attorney? I suspect not.

      Second, Article XIII (as amended by the provisions from Prop 218) and Article X (which contains the provisions of the 1908 Water Act amended many times since) are in direct conflict with one another. Under California Constitutional law how do you resolve those conflicts. If you apply Article XIII’s Prop 218 provisions to the letter, then Article X is violated. If you apply Article X’s provisions to the letter, then Article XIII is violated. How do you harmonize those two conflicting Articles of the California Constitution?

      Third, Maguire made no such ruling. I was there, listening to him intently. He verbally pointed out that the language of the Griffith case ruling by the Appellate Court, which deemed that proportionality had to be demonstrated at the Class level, was inconsistent with the language of Prop 218, which says that proportionality had to be demonstrated at the Parcel level. He asked the lawyers for both parties what their opinions were about that mismatch, and the attorneys for the Plaintiff weren’t in a position to capitalize on that “open door.” It probably would have been moot even if the Plaintiff’s attorneys had pounced, because judicial procedure pretty much ties a trial judge’s hands with respect to an Appellate Court precedent. In effect Maguire was “kicking the case upstairs” to the Appellate Court level, from whence the Griffith precedent came. In the other trial court jurisdictions you cite, there wasn’t an appellate level precedent that the trial court judge had to follow.

      Fourth, your economies of scale argument is fatally flawed. The only variable costs which can be “economized” are electricity for running the pumps and chemicals for treating the water pumped. The electrical cost to run the pumps for gallon one, is the same as the costs to run the pumps for gallon one hundred, as the costs to run the pumps for gallon one thousand, as the costs to run the pumps for gallon one million. No electrical economies of scale. The chemical cost to treat gallon one, is the same as thhe chemical cost to treat gallon one hundred, as the chemical cost to treat gallon one thousand, as the chemical cost to treat gallon one million.No chemical treatment economies of scale. Where are your economies of scale coming from?

      Fifth, you say “We will also save on sharing some of the infrastructure they will pay in getting the water through Davis to UCD.” How do you know that. The information shared thus far clearly shows UCD spending $8 million to create its own conveyance pipeline from Poleline Road to the campus. There is nothing that we know thus far that would lead anyone to assume that their water will go through City pipelines in some, or all, of that journey from Poleline to the UCD campus. If you know otherwise please share your sources. Until then we have to wait and see on any such cost sharing.

    2. Anon

      To Paul Brady: So what are you saying, that Judge Maguire’s decision was politically motivated, and did not follow the law? Which is more likely? That the judge got it right (especially since Prop 218 is very loosey-goosey when it comes to proportionality language, giving local jurisdictions lots of leeway in how they want to set up water rate structures), or there was a conspiracy by politicians in this county in regard to water rates and the judge did what was politically expedient but did not follow the law? Remember, the lawsuit tried to claim ordinary tiered rates were illegal, even though most other jurisdictions have been using them for years and they have passed legal muster many times over. Which argument has more credibility – that of the plaintiffs or the judge? If you think it is the plaintiffs, then IMO you need to do more research on this issue, and talk to some attorneys who specialize in water law.

      1. Matt Williams

        “… the lawsuit tried to claim ordinary tiered rates were illegal, even though most other jurisdictions have been using them for years and they have passed legal muster many times over.”

        Until the YRAPUS case, the proportionality of the fixed fee portion of traditional rate structures had never been litigated. Your statement is true for the variable fe portion.

        With that said, I agree with the premise of your response to Paul. His conspiracy argument is a flight of fancy.

      2. paul Brady

        Matt – I respect your and everyone’s right to their opinions.

        BUT, GAD, I DO HATE POLITICS! IT SEEMED IRRATIONAL FOR THE COURT TO ALLOW THE CITY TO INVENT CLASSES OF USERS, RATHER THAN USING THE CONVENTIONAL PROPERTY PARCELS OF WATER USERS AS SPECIFIED IN PROP.218. THESE CLASSES INVENTED BY THE CITY HAD INCREASING WATER USAGE AND SO THE CITY SAID SHOULD BE PAY MORE PER GALLON FOR WATER BECAUSE THEIR NEEDS MADE THE SYSTEM LARGER! IN FACT, THEY SHOULD HAVE BEEN CHARGED LESS OR THE SAME PER GALLON. ECONOMIES OF SCALE IS A TENET OF MICRO-ECONOMICS. IT WAS PROVED HERE WHEN DAVIS DOWNSIZED FROM 18 TO 12 MILLION GALLONS PER DAY AVERAGE: THE COST PER GALLON WENT UP FOR THE SMALLER SYSTEM. [OF COURSE THE LARGER USERS DID PAY MORE FOR THE LARGER SYSTEM BECAUSE THEY USED MORE WATER – SOME USED A LOT MORE WATER AND PAID A LOT MORE! BUT THEY SHOULD NOT HAVE TO PAY MORE PER GALLON!

        MEASURE P CHALLENGED THE LARGER COST PER GALLON AS SPECIFIED IN THE TIER SYSTEM AND WHICH COULD ALSO OCCUR UNDER CBFR FOR USERS DOING MORE SUMMER IRRIGATING.

        ARTICLE XIII TAKES PRECEDENCE OVER ARTICLE X. FOR EXAMPLE ,JUDGES HAVE RULED THAT CONSEERVATION MUST BE PROMOTED WITHOUT VIOLATING 218.

        I HAVE NOT SEEN ANYTHING BUT TALK ABOUT TRYING TO SHARE SOME OF THE LINES.

        1. Matt Williams

          IT SEEMED IRRATIONAL FOR THE COURT TO ALLOW THE CITY TO INVENT CLASSES OF USERS, RATHER THAN USING THE CONVENTIONAL PROPERTY PARCELS OF WATER USERS AS SPECIFIED IN PROP.218.

          Paul, where in the language of Proposition 218 or in the language of Article XIII are “rational” water classes or “conventional” property parcels specified?

          ECONOMIES OF SCALE IS A TENET OF MICRO-ECONOMICS. IT WAS PROVED HERE WHEN DAVIS DOWNSIZED FROM 18 TO 12 MILLION GALLONS PER DAY AVERAGE

          I agree that economies of scale is a tenet of micro-economics; and you have to apply that tenet to the actual/specific costs associated with each specific microeconomic situation … which brings me back to my previous questions to you. (1) Is there any difference between the electrical costs for water pumping for gallon one, gallon one hundred, gallon one thousand, or gallon one million? (2) Is there any difference between the chemical costs for water treatment for gallon one, gallon one hundred, gallon one thousand, or gallon one million?

          After you have answered those two questions, we get to the following additional microeconomic questions. (3) What portion of the capital construction costs for the raw water pipeline do you allocate to gallon one, gallon one hundred, gallon one thousand, gallon one million and gallon 30 million? (4) From a microeconomic perspective do you allocate the capital construction costs at full capacity operations or 33% capacity operations?

          ARTICLE XIII TAKES PRECEDENCE OVER ARTICLE X. FOR EXAMPLE ,JUDGES HAVE RULED THAT CONSERVATION MUST BE PROMOTED WITHOUT VIOLATING 218.

          Where in the California Constitution does it say that Article XIII takes precedence over Article X?

          Judges have also ruled that proportionality must be promoted without violating the provisions of Article X. Laws to that effect have been specifically passed by the California Legislature (e.g. Assembly Bill 325, Assembly Bill 1061, Assembly Bill 1881, Assembly Bill 2882, Assembly Bill 3030 and Senate Bill X7-7 The Water Conservation Act of 2009) and those laws have been upheld by the Courts (e.g. Brydon v. East Bay Municipal Utility District (1994) 24 Cal. App. 4th 178, and Bighorn Desert-View Water Agency v. Virjil 39 Cal. 4th 205 (2006))

      3. paul Brady

        I HAVE TO AGREE WITH MATT. TIERS, PER SE, HAVE NOT BEEN CHALLENGED IN A WAY I WOULD LIKE TO SEE. HAVE YOU READ PROP. 218? IT SEEMS VERY DEFINITE AND SPECIFIC REGARDING PROPORTIONALITY. THE CASE THE JUDGE CITED, GRIFFITH VS PAJARO, CONCERNED DIFFERENT TYPES OF WELLS HAVING DIFFERENT RATES PER CCF OR GALLON. I COULD NOT SEE THAT IT WAS VERY RELEVANT TO THE DAVIS CASE OF WATER BEING DELIVERED TO PROPERTY OWNERS, ETC. [MEASURE P DID CHALLENGE TIERS.] THE JUDGE SEEMED TO BE REACHING ON THIS ONE. TWO OF MY DAUGHTERS ARE LAWYERS FROM GOOD SCHOOLS [BOLT HALL, IS IT CALLED], AND AGREED THE REACH WAS LONG, BUT I UNDERSTAND THAT IS HOW IT GOES!

        1. Matt Williams

          Paul, as noted in my earlier replies to you Article XIII and Article X are co-equal provisions of the California Constitution, that they are in direct conflict with one another. In such situation their specific provisions need to be “harmonized” in order to achieve to a maximum simultaneous effect of the conflicting/competing provisions. Many of the laws I cited in one of my prior replies were passed in order to give regulators and citizens guidance about how to conduct such “harmonizing” between Article X and Article XIII.

          Bottom-line, you are reading the provisions of Prop 218 in isolation when you make your points above, and California Law says that that is an error on your part.

  3. Anon

    I will repeat again, there are many considerations when approving a water rate structure. For instance, the financial market analyst made clear that the ultimate BW rate structure with 13/87 split would cost more for debt service. Council member Brett Lee understood this. What difference does it make to the ratepayer between different rate structures that may differ by at most $9 per month as the most extreme example (in most cases it would differ by $2-4 per month), if millions more must be set aside in the reserve fund and the interest rate is as much as 2% higher? Or what if we had taken on an untested rate structure that would have resulted in an even higher interest rate or perhaps killed our chances to obtain state revolving funds? How “fair” is it to charge customers an extra $30 per month in debt service costs, to save $5 per month to be “fair” to low water users? We can do “what ifs” on the “equity” side ’til the cows come home. Ultimately there are a number of factors that need to be considered other than how much per gallon is paid and by whom, that speaks directly to how much rate payers will have to cough up per month for water.

    1. Matt Williams

      “I will repeat again, there are many considerations when approving a water rate structure. For instance, the financial market analyst made clear that the ultimate BW rate structure with 13/87 split would cost more for debt service …”

      Might cost more for debt service. “Might” not “would.” Time will tell what the actual outcome will be. You and Paul Brady must have learned rhetoric at the same Hyperbole Charter School.

      1. Barack Palin

        LOL Matt, the Hyperbole Charter School must be full up because there was a lot of rhetoric being thrown around by the other side when all the dire warnings of things that might or would happen if Measure P were to pass.

        1. Matt Williams

          Lets start by noting that that $3.5 million isn’t a cost. It is the building up of a reserve balance which appears on the Cash Flow Statement, not the Income Statement. To determine what appears on the Income Statement as cost for that reserve balance you have to answer the following question, “What is the cost of money for that $3.5 million per year?” The answer is “$35,000 at 1%.” or “$70,000 at 2%.” In a $20 million annual Revenue Requirement, that is a “less than two-fifths-of-one-percent increase in the annual water budget. Conversely, if the presence of that $3.5 million eliminates the credit rating risk you mentioned in a previous comment, the annual cost savings for a one-quarter-of-one-percent improvement in interest rate is more than $186,000 for a 30 year bond. That seems like a reasonable trade-off.

          Anon, in prior comments you have talked about the various parameters that go into a rate making decision. One parameter you omitted is the cost of litigation. What do you think the cost of litigation is likely to be with the Council-adopted 87/13 rate? What do you think the cost of litigation would have likely been with a traditional 60/40 rate structure if Council had adopted it?

          After Elaine Roberts Musser, in her public comment on July 2nd, expressed her sincere concern, “that [87/13 gives] Surface water opponents grounds for a potential lawsuit,” Don Price, one of the plaintiffs in the YRAPUS case, gave a candid and heart-felt, and well-informed answering Elaine’s litigation and litigation costs caution.

          Don’s response to Elaine was, “I can’t imagine anybody bringing any kind of legal action or legal challenge to an 87/13 rate. The people who challenged CBFR […] would be very happy to have the 87/13 rates. So that’s another total Red Herring.” On the other hand, based on the many public comments of the supporters of Yes On Measure P, adoption of a 60/40 rate would face significant challenges of the same type that spawned the YRAPUS case.

          1. Anon

            If you are going to quote Elaine Roberts Musser, at least quote her correctly. She indicated the untested 13/87 Williams-Lemongello rate structure would spawn a potential lawsuit. Cost of litigation is certainly a parameter, but I don’t think a BW 40 fixed/60 variable split would have caused a lawsuit. It is also clear that an extra $3.5 million must be set aside for the rate structure with a 13/87 split – which is a “cost”, no matter where in the formal accounting picture you plug that figure in. The ratepayers still have to cough it up either directly or indirectly.

          2. Matt Williams

            I did quote her correctly. i even went to the video on the City website to be sure I had her wording and Don Price’s wording right.

            Costs get expended, and the money, once expended is gone forever. Reserve Funds do not get expended, and the money placed in a Reserve Fund continues to be available for its specified use. To quote Chapter V.3 of the the American Water Works Association Rates Manual (the AWWA M-1 Manual), “Once established, a rate stabilization fund can be drawn on to mitigate large impacts of prospective rate adjustments. The rate stabilization fund is used to meet a portion of the utility’s revenue requirements. Rate stabilization may also help the utility manage through unexpected low-revenue periods. Once rate stabilization fund levels are established, the maintenance of the appropriate fund level is often managed by adjusting the necessary future increases in general rate revenue to recognize any variations in annual water sales”

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  5. paul Brady

    Matt – I believe we agree on most things, and can agree to disagree on others – most not of great import, in my view.

    Re 218: SEC.6 [1] states that ‘the parcels upon which a fee or charge is proposed’ — ‘shall be identified’ — and ‘the amount of the fee or charge to be imposed upon each parcel calculated.’ The agency shall provide written notice — of the latter – ‘to the record owner of each identified parcel’, etc. The City did this via the Prop.218 notices sent out to each parcel owner.

    But in court the City did not use these identified parcels as required by 218. It invented classes of water users with increasing water use. These classes had not been previously identified or sent notices as required by 218. The contents of these classes were not specified other than as water users. The Judge allowed this chang from 218 requirements in what I consider to be a deception. And then of course these larger users were accused of causing the price of a gallon of water to rise, thus justifying charging them more per gallon via the tiers, although no proof of this was given!

    Best wishes,

    Paul

    Dr. F. Paul Brady, Professor of Physics, UC Davis (retired)
    Principal, BPF Investments/Charitable Investments
    Office Ph: (530) 753-5929; Cell (530) 220-3593
    43182 West Oakside Pl, Davis, CA 95618

    1. Matt Williams

      Paul, the four Water Classes (Single Family Residential, Multi-Family Residential, Commercial/Industrial/Institutional and Irrigation only) existed in the City of Davis water rate structure since long before the YRAPUS case was even contemplated, much less filed. They were not “invented” nor do they represent any form of “increasing water usage. For example:

      — The low user in the Single Family Residential (SFR) Class used zero (0) ccf in the base year 2011 and the high SFR user used 3,313 ccf.

      — The low user in the Multi-Family Residential (MFR) Class used zero (0) ccf in the base year 2011 and the high MFR user used 18,369 ccf.

      — The low user in the Commercial/Industrial/Institutional (Commercial) Class used zero (0) ccf in the base year 2011 and the high Commercial user used 12,030 ccf.

      — The low user in the Irrigation-Only (Irrigation) Class used zero (0) ccf in the base year 2011 and the high Irrigation user used 24,240 ccf.

      Where is there a pattern of “increasing water usage in the accounts/parcels in those four Classes?

      If you check the Court Reporter’s transcript, Judge Maguire did not allow the “parcel to class change,” the =Appellate Court in the Griffiths case established that change as precedent.

      As noted in one of my prior responses to you, tiers have been upheld by laws passed by the California Legislature … laws that have been tested and upheld in California Courts (see Brydon v. East Bay Municipal Utility District (1994) 24 Cal. App. 4th 178, and Bighorn Desert-View Water Agency v. Virjil 39 Cal. 4th 205 (2006))

      1. paul Brady

        MATT – MAYBE THE JUDGE CAN SHIFT FROM CLASSES OF WELLS, AS IN GRIFFITH, TO CLASSES OF USERS BUT HE CANNOT ALLOW THE CITY TO IGNORE OR CHANGE THE CONSTITUTION – SEE MY NOTE ABOVE. PROP. 218 REQUIRES THE CITY TO IDENTIFY EACH PARCEL AND THE AMOUNT OF THE FEE OR CHARGE TO BE IMPOSED. I HAVE MY PROP. 218 IN FRONT OF ME. IT IDENTIFIES INDIVIDUAL PARCELS SUCH AS OUR PROPERTY, AND THE FEES/RATES TO BE CHARGED AND THE COSTS EXPECTED. PROP. 218 NOTICES WERE NOT PRODUCED WHICH IDENTIFIED THE UNDEFINED OR NEBULOUS PARCELS OF USERS THE JUDGE ALLOWED THE CITY TO INVENT, OR THE AMOUNTS THEY WERE TO BE CHARGED. IT WOULD BE IMPOSSIBLE FOR THE CITY TO DO SO IN SUCH A NOTICE OR ANY NOTICE!

        THE OTHER BIG ERROR WAS ASSUMING THAT LARGER USERS SHOULD PAY MORE PER GALLON – WHEN THE DATA FROM EARLIER STUDIES SHOWED THAT THE LARGE USERS DO NOT INCREASE THE UNIT WATER COST.

        ALSO THE JUDGE ALLOWED THE CITY TO MAKE THE LARGER USERS RESPONSIBLE FOR THE LARGER PEAK PRODUCTION IN THE RIVER WATER PROJECT. AU CONTRAIRE, IT WILL BE WATER FROM THE DEEP AQUIFER WELLS WHICH WILL FILL THE GAP FOR THE SUMMER PEAK USE. THE RIVER WATER PROJECT CANNOT SUPPLY MORE THAN ABOUT 1/2 OF OUR SUMMER WATER NEEDS, AND IN SOME MONTHS AND SOME YEARS MUCH LESS!

        1. Matt Williams

          Paul, ultimately it isn’t the judge who is “allowing the city …” it is the recorded legal precedent that does so. I don’t disagree with you. Based on his comments recorded by the court reporter, the judge doesn’t disagree with you. Your argument appears to be with the Appellate Court that made the decision in Griffith.

          Tiers have much more to do with Article X than they have to do with Article XIII. I’ll re-ask my prior question to you. What makes you believe that the provisions of Article XIII of the California Constitution takes precedence over the provisions of Article X?

  6. Anon

    To Matt: I would urge you to review the tapein its entirety, not out of context. Elaine Roberts Musser continually referred to the WL rate structure as untested and open to a lawsuit. Secondly, where do you think the $3.5 million for the reserve fund is going to come from, out of thin air? It will come out of the ratepayers/taxpayers pocket. Exit stage right.

    1. Matt Williams

      Anon, are you saying that from a lawsuit risk perspective, Elaine had no problems with the variable vs. fixed proportions of an 87/13 rate structure?

      Regarding the “untested” nature of an 87/13 structure, Elaine’s stated concern in her public comment proved to be unfounded when both Staff/Bartle Wells and Lemongello/Williams shared the same American Water Works Association’s Water Rate Survey information in their respective presentations. 87/13 is a well established, well tested rate structure used by San Francisco and Palo Alto (90-10), Arcata (87-13), Santa Rosa, Anaheim and Santa Ana (85-15), Santa Barbara, San Diego and Hayward (84-16), and Ventura (82-18), amongst others. The number of California ratepayers and residents in those respective water districts is beyond substantial, it is impressive. That is some very serious “testing.” I chose not to belabor the inaccuracy of Elaine’s use of the word “untested” in her public comment, but since you brought up that word, it makes sharing the above information appropriate.

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