City-Ratepayers Cut Deal to End Litigation, Pave Way for Approvals of Water Rates

Proponents of the Water Initiative turned in signatures in January
Proponents of the Water Initiative turned in signatures in January

Coming out of closed session on Tuesday night, Mayor Dan Wolk announced a settlement agreement with YRAPUS (Yolo Ratepayers for Affordable Public Utility Services) that will end all litigation and preclude the group from attempting further measures aimed at stopping or otherwise delaying the water project from going through with the currently approved rates.

City Attorney Harriet Steiner announced, “We’d like to report out that the city of Davis has reached a settlement with the Yolo Ratepayers and Mr. John Munn related to the water rates case.”

“This is a total settlement that has now been approved by all sides of this case,” Ms. Steiner stated. “The city and the parties went to mediation last week and that has resulted in this settlement.

“The general terms of the settlement are that the plaintiffs will not oppose the city’s proposed water rates as set out in the current Prop 218 notice, that they will dismiss their entire case against the city, and that they will not file another case related to the water rates, the sewer rates, Measure I or do any other public process regarding these water rates.

“The city in exchange agrees that it will pay its water and sewer charges at the same standard rates that everyone else pays their water rates going back to August 2013 with offsets for the properties that the water and sewer system uses that belong to the general fund. The city has already begun making those payments approximately a year ago, the city will continue to provide water education and conservation programs, the city will allocate another $5000 for the Water Assistance Program, and in consideration of the plaintiffs maintaining their obligations in this matter, the city will pay $195,000 to the plaintiffs for the costs that they incurred in the litigation,” Ms. Steiner stated.

The city issued a statement later on Tuesday night.

Davis Mayor Dan Wolk and Attorney Michael Harrington, representing plaintiffs Yolo Ratepayers Association for Affordable Public Utilities (YRAPUS) and John Munn, “are pleased to announce that all parties have agreed on a global settlement that will result in YRAPUS and John Munn dropping their current litigation challenging the City’s approved water and sewer rates and agreeing not to bring any further legal challenges to the water rates coming before the City Council on September 16, 2014.”

The statement continues, “The settlement will, in tum, allow the City to move forward with the regional Surface Water Project approved by the City’s voters in March 2013. The settlement agreement came about as result of a successful mediation before a neutral mediator.”

John Munn, a former candidate for the city council stated, “I was opposed to the water rates adopted in March 2013. I thought they were difficult to understand and they were not fair. Though I continue to be concerned about the costs of the water, the newest rates approved by the City Council address my other concerns so I have agreed with the proposed litigation settlement and will not be a party to litigation against the new rates.

He added, “I am glad we can put this matter behind us and I look forward to working with the City Council in the future.”

Pam Nieberg stated, “With this settlement I am glad the so-called ‘water fight’ is over.”

Nancy Price would add, “The litigation and our vigorous campaign for Measure P were successful in creating fairer water rates, better accountability and transparency concerning water rate revenue and expenses, and additional funding for low income families to help with water bills. I support the settlement.”

Attorney Michael Harrington said, “I represented John Munn and YRAPUS because I agreed with their positions on the water rates. The proposed 2014 water rates address the majority of our concerns. Through the public process and the litigation we have asked for fairness, efficiency and transparency. We are satisfied that we have achieved these goals and we thank the City Council and staff for their efforts to resolve our differences.”

Mayor Dan Wolk would state, “I am grateful both sides were able to collaborate and amicably resolve this litigation. With this settlement, we as a community can now move beyond the water disputes of the past and focus our united efforts on ensuring the long-term success of our water project. I wish to thank the members of YRAPUS for all of their efforts and their willingness to come together on crafting this resolution.”

Councilmember Rochelle Swanson added, “Ever since Mayor Wolk and I proposed the Water Advisory Committee in fall 2011 we have been working diligently to strengthen the water project and build community awareness and support. In many ways this settlement is a culmination of these efforts.”

YRAPUS-Settlement

This agreement, along with the scheduled September 16 Prop 218 hearing, will bring to a close a lengthy fight over the water rates. On September 6, 2011, the city council by a 4-1 vote approved a Prop 218 hearing that appeared to pave the way for the surface water project. However, Michael Harrington among others launched a referendum drive that forced the council on December 6, 2011, to rescind the water rates and begin a lengthy public process.

The public process brought forth the Water Advisory Committee which led to the successful passage in March 2013 of Measure I. However, opponents of the project would sue the city as well as launch an initiative drive that became the successful Measure P which rescinded water rates.

In January of this year, Judge Dan Maguire would rule against YRAPUS and rule that the water rates met the constitutional requirements under Prop 218. The city council this spring and early summer, following the successful Measure P, would pass new water rates that all sides seemed to agree on as a compromise.

This agreement now paves the way for the water project to go forward, pending the Prop 218 implementation of the water rates.

Update: The City has corrected a typographical error in the Summary of Key Settlement Deal Points originally sent to the Vanguard. The first bullet under “CITY AGREES TO” should read:
+ Going forward and looking back to August 2010, pay all water and sewer charges for its facilities at standard rates, less approved offsets for fair market leases with utility enterprises. (Such payments have been partially made and are already in progress.)

—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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16 thoughts on “City-Ratepayers Cut Deal to End Litigation, Pave Way for Approvals of Water Rates”

  1. Alan Miller

    I am unclear as to why this group was not advocating for higher fixed costs to pay for the fixed infrastructure. As the truth about these “low usage” surcharges comes out, it becomes even more clear why fixed costs should not be paid through variable charges. To borrow a metaphor, this is like paying for a pizza entirely by the toppings. You get a cheese pizza for 13% of the cost, even though if everyone did this it would never pay for the rent and the ovens. So we assume everyone will buy X number of toppings, but toppings are so expensive that people aren’t going to be incentivized to buy a lot of toppings. So if customers as a whole won’t buy many topping of choose cheese pizza, the pizza parlor raises topping costs with a ‘low-topping-sales’ surcharge. The only flaw in this metaphor is that, except for bottled water, most people can only buy pizza at this one parlor.

    This equity thing (that wasn’t) is going to bite this city in the arse. A similar situation is occurring with state gas taxes. You can’t politically raise a gas tax, so they are placing “cap & trade” taxes on the oil industry, which will pass it on to consumers some say in the 15-20¢ / gallon range. This is raising government money via gas sales, but oh, no, not a tax!

    And if that is not bad enough the state is about to seek “mileage charges” on top on that. The worst thing about “mileage charges” is that they are on top of gas taxes and raised instead of raising gas taxes. More efficient and electric vehicles are replacing gasoline usage, so tax revenue is dropping. Raising gas taxes would discourage gasoline use, but NO, we can’t raise gas taxes! So we incentive gas use by initiating a mileage charge as well, and people are OK with THAT?!??!!! Insane!

    The most likely scenario for “mileage charges” for all vehicles is a monthly bill in the mail based on tracking your car via GPS or odometer reading. Think this won’t happen? Check out that a pilot program is already in place in Oregon, and California is ready to have it spread here.

    This is similar to the water low-use surcharge tax in that as revenues are dropping due to positive trends, new methods of revenue are sought to give the government money.

    1. dlemongello

      Alan, I do not understand what you mean by ” So we incentive gas use by initiating a mileage charge as well”. And how can they keep track of mileage? I just don’t see it.

      As for water use, it will only drop so far and the bigger users will pay a bigger share, and to me that is fair (I think the word is valid and the concept relevant). The project is built for the bigger users, without them it would not have been needed. There is even some informed thought that the aquifer could have sustained us at the old levels of use but I think that was cutting it close. Cost is what will get people to conserve, but we could not raise the cost to force conservation because of the proportionality issue. So we had to make it cost more so we could charge more. Depending on precipitation, we might have way more water than we need, or maybe not, but people will conserve because of cost, helping some if we also have short supply. The time to conserve was when there was plenty of water, but that is not how humans operate. And so again, the more you use the more you should pay IMHO.

      1. Alan Miller

        Oregon is conducting a pilot program with willing participants with several options. Some are using a GPS, some an odometer, some a fixed charge. The idea is that those who drive out of state may want to use a GPS so they don’t pay for miles not driven in Oregon, but many people don’t want a GPS tracker because of privacy concerns. There are several states watching Oregon carefully to see how the experiment goes, California is chomping at the bit for the revenue potential.

        I never bought the 87-13 arguments; towards the end it was clear pretty much everyone was going that direction. I was concerned about the incentive to starve trees. After all, with so many rental houses, what incentive do short-term renters have to keep trees alive with expensive per-gallon water rates?

  2. Davis Progressive

    well at least we now know the motivation behind harrington’s agenda really was all about the money. i really wanted to believe he was sincere. i’m surprised so little comment about harrington extorting $195000 from the city. it’s a disgrace and the city caved. wow.

  3. Don Strong

    What? Was not Bob Dunning consulted? Wait till he hears about this! (Alas, I won’t be able to read his next repetition of that years-old column, have quit the Emptyprise. Wineaux, Snoopy, and Dilbert are all that remains of the EP).

  4. hpierce

    “… $195,000 to the plaintiffs for the costs that they incurred in the litigation,” ….

    David… I assume that these needed to be itemized, or at least characterized, with amounts attributed to individuals/entities. Please make these available if you can. I assume that Mr Harrington, Mr Munn, and all the other plaintiffs would be glad to assist in making a government action as transparent as possible. After all their attorney is quoted as saying, “Through the public process and the litigation we have asked for fairness, efficiency and TRANSPARENCY”. If not, in my opinion, they lose the moral and ethical right to use the word “transparency” for 3-5 years.

    Also, what is meant by “… with offsets for the properties that the water and sewer system uses that belong to the general fund.” ?

    1. DavisVoter

      I agree with the call for an itemized accounting. Money paid to plaintiffs “for incurred litigation-related expenses” seems as though it could easily include fees paid or owing to Harrington, other attorneys, consultants, etc. As far as I know, it could include payments to compensate Munn for the “expense” of his time spent on this matter.

      1. John Munn

        I can speak only for myself in response to DavisVoter’s concern about compensation for helping to save the community millions of dollars in unnecessary water project spending. I hope that he/she will not be too disappointed to learn that the only funds coming to me from the settlement will be to reimburse some relatively small payments I made toward litigation costs. There is no, and was never expected to be any, compensation for my time spent on this. As Davis moves ahead with its various water system projects, my hope is that those in favor of the resulting higher costs will not be disappointed with their increasing water bills, that the many who will need to make choices about how to pay more for water will not be hurt too badly, and that the rest of us will be able to make ends meet by reducing use or taking other measures to reduce water costs.

        John Munn

        1. ryankelly

          John, Your lawsuit now has cost the City/Ratepayers close to a half a million dollars, if you take the settlement and estimate payment for the City’s obligation to defend your lawsuit and staff time. And for what? It came down to one issue of whether the City and the Utility were exchanging money for water and land use. Correcting this could have been accomplished without a lawsuit. This was a complete waste of our money and the settlement does feel like extortion in the end. It seems that the only person who is benefiting is your lawyer. I really don’t understand how you allowed yourself to be convinced that this was the best use of taxpayer money.

          1. Don Shor

            Isn’t the standard contingency fee usually 35%? How many plaintiffs, and who exactly were they? I’m sure we can do the math.

          2. hpierce

            My comment about those involved complaining about “transparency” in the future, stands. They didn’t need to insist on the ‘confidentiality’… unless of course the plaintiffs or the City had something to hide.

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