Historic Water Deal or Rate Jacking of Davis Residents?

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watersupplyWater Rates Will Soar With New Water Deal –
Davis and Woodland officials are busy giving themselves chest-bumps and high-fives for closing a deal that will secure permanent summer water rights.  The deal will be formally approved next Tuesday at a special Davis City Council Meeting, ironically enough extending Don Saylor’s tenure on the council and as Mayor by another meeting.

The deal was reached with the Conaway Preservation Group (CPG) and Tri-City Water and Farm.  We learn now that the latter company is a subsidiary of AKT Development, the company run by Angelo Tsakopoulos, who the Sacramento Bee reported Wednesday was in talks with Yolo officials over the Conaway Ranch deal.

The deal does not come without its costs however.  The project will cost over $325 million at the outset.  According to some sources, the annual payments to Davis ratepayers will rise 2 percent each year for 24 years – that number obviously on top of inflation.

For Davis, that means your water bill (as opposed to the sewer bill) will increase from about $40 to $90 according to Davis interim city manager Paul Navazio.

Bill Marble, who chairs the Joint Powers Authority along with the mayors of the two Cities, Don Saylor and Art Pimentel, wrote a piece that borders on propaganda and which appeared Wednesday on a rival Davis site.

They write, “If approved by all parties, these agreements would pave the way for the development of a high quality water supply at the most affordable price, and ensure local surface water supplies are reserved for local use, for generations to come.”

How they can consider more than doubling the water rates for local residents to be affordable is a question that they leave unanswered.

They continue, “First, the agreements enable the Woodland-Davis Clean Water Agency and RD [Reclamation District] 2035 to jointly construct an agriculture-urban water intake facility for operation beginning in 2016. The facility would replace RD 2035’s current, antiquated facility with a state-of-the art fish screen and other environmentally-beneficial enhancements. Costs for facility construction and operation would be fairly shared by agricultural users and the Woodland-Davis Clean Water Agency. Agriculture, Woodland and Davis residents, and the environment would benefit.”

Moreover, “Second, the Woodland-Davis Clean Water Agency would acquire very important land easements on the Conaway Ranch at no additional cost.  In other words, the rights to build water pipelines from the intake structure to the water treatment facility would be deeded to the Woodland-Davis Clean Water Agency by CPG.  The importance of those easements cannot be understated.  In addition, Conaway Ranch acreage would be provided to appropriately mitigate the water supply project, along with other easements that may allow for improved flood protection.”

Finally, “Third, and perhaps most importantly, the Woodland-Davis Clean Water Agency would acquire permanent water rights from CPG. These water rights are needed to provide water supply during times when diversions of surface water would otherwise be disallowed by the state. Absent the purchase of these water rights, the Woodland-Davis Clean Water Agency would be required to purchase all summer water on the open market—both now and in the future, at a premium that is expected to become increasingly costly.”

However, there are several key issues that simply have not been addressed in the near delirious optimism expressed in this and other articles.

First, the question is whether these rate hikes, particularly during tough economic times, will work to force people from their homes.  Most vulnerable will be seniors and those on fixed incomes.

Second, while the city has now secured summer water rights, we still do not know the state of the water picture after the state takes a more serious look at the Delta in the coming years.

Far from the paving the way to a more certain future as Bill Marble argues, we have large amounts of uncertainties hanging over our heads simply because we do not know what the state will do with the water issue.

There are challenges to our water application that may go forward.

There is also the question about the Delta Flow Criteria.  The California Sportfishing Protection Alliance challenged our application arguing that “recent Delta flows are insufficient to support native Delta fishes for today’s habitats.”  Moreover, “In order to preserve the attributes of a natural variable system to which native fish species are adapted, many of the criteria developed by the State Water Board are crafted as percentages of natural or unimpaired flows.”

These criteria are as follows: 75% of unimpaired Delta outflow from January through June; 75% of unimpaired Sacramento River inflow from November through June; and  60% of unimpaired San Joaquin River inflow from February through June.

Writes the CSPA, “75% of the unimpaired November through June inflow on the Sacramento needs to be passed through the Delta as outflow to “preserve the attributes of a natural variable system.” At present, the number is as low as 30%, and the April through June period averages 50% of the unimpaired Sacramento River flow.”

The letter continues, “CSPA agrees with your letter of July 16 that the proposed new diversions by Davis, Woodland and U.C. Davis would be area-of-origin diversions. However, there is no evidence that this provides protection to fish and wildlife resources any more than would the standard permit terms. You state on page 2 of your letter: “If there is insufficient water to satisfy all demands, the DWR [Department of Water Resources] and USBR [US Bureau of Reclamation] must either reduce its [sic] 1 exports or increase releases of previously stored SWP [State Water Project] and CVP [Central Valley Project] water over and above the amount required to maintain instream flows in order to support its exports.”

Local officials dismiss the CSPA as a gadfly that challenges water rights throughout the state, but the Delta Flow Criteria Report is something that ought to be taken more seriously.

Third, is the city selling out by cutting a deal with the proverbial devil, in this case Tsakopoulos?  Sources familiar with the situation inform the Vanguard that the city is severely underestimating the cost of the surface water project because it is failing to take into account other costs.

Bottom line, the price of water is going way up and staying there.  It is more likely that we have underestimated the costs, rather than overestimated them.  And the rights we are purchasing seem tenuous at best and we now have to rely on Tsakopoulos to provide us our water.

This is a tough deal to swallow.  Glad our leaders our bumping their chests over it.

—David M. Greenwald reporting

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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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36 thoughts on “Historic Water Deal or Rate Jacking of Davis Residents?”

  1. SODA

    What would you have considered a smarter deal David? Is this agreement being done now because this is the only time it could be done, as Conaway is being sold?

  2. hpierce

    Agree with the same ‘lines’ as SODA… the UC system is blocking the city’s ability to draw from the ‘best’ groundwater – the ‘deep’ aquifers… wells have “lifetimes”… the city may well have to acquire property to drill new ones, as the older ones “fail”… if the surface water issue troubles you, and you believe it should trouble us, what is your alternative, particularly concerning that the ‘regulators’ consider our existing sources fit for human consumption, but not ‘fit’ for the environment? As the largest water uses are irrigation/agriculture, where would you suggest we achieve a 2% reduction in use per year (yes, I know that there are “fixed” costs, but if rates go up 2%/year, on one level, that could be negated by decreasing consumption by 2%)… we could minimize costs/impacts by banning all new and existing lawns, public and private… is this what you suggest? Instead of “spit-balling, do you propose an alternative?

  3. rusty49

    “According to some sources, the annual payments to Davis ratepayers will rise 2 percent each year for 24 years – that number obviously on top of inflation.

    For Davis, that means your water bill (as opposed to the sewer bill) will increase from about $40 to $90 according to Davis interim city manager Paul Navazio.”

    I hope my water bill is only $90 in 24 years from now.

  4. Rifkin

    [b]”According to some sources, the annual payments to Davis ratepayers will rise 2 percent each year for 24 years – that number obviously on top of inflation. For Davis, that means your water bill (as opposed to the sewer bill) will increase [u]from about $40 to $90[/u] according to Davis interim city manager Paul Navazio.” [/b]

    An increase from $40 to $90 over 24 years equates to an annual compounded inflation rate of 3.437%. That’s roughly in line with our historic Consumer Price Index rate of inflation.

    If the 2% is added on top of that each year–as Dave says in his 8:09 AM post–then after 24 years a $40 bimonthly bill becomes a $142.51 (or $855 per year).

    I don’t really know what is expected to happen to our bills or if the city leaders yet know. (A quote in the Enterprise article suggests that without this deal our bills would inflate much more than with this agreement.) However, one thing I expect–in fact, I am as sure of it as one can ever be sure of any macroeconomic forecast–the United States is going to have consumer price inflation FAR IN EXCESS OF OUR HISTORIC INFLATION RATE over the next 2.5 decades.

    We have run serious trade deficits for decades which ultimately will be reversed by a huge decline in the value of the dollar. It will all come down at once. One day we will be a rich country. A month or so later we will be substantially poorer. When our currency collapses, every commodity you buy–including almost all food items, clothes, appliances, cars, etc.–will become much more expensive–double or even triple–than you are used to paying.

    This kind of overnight explosion of inflation will be beyond the control of our Fed, at least temporarily. The U.S. has never experienced anything like it. Those who own the U.S. debt–mostly China, Taiwan, Japan and the Arab oil powers–will no longer finance our deficits. And without the ability to debt finance, we will no longer be a military superpower.

    Is there anything we can do to change this outcome? I don’t think so. I think it is inevitable; and I think it will come in less than 20 years.

    [img]http://globalpolicy.org/images/charts/SocialEconomicPolicy/trade_buget_deficits/currentaccountgraph.gif[/img]

  5. Dr. Wu

    I do not think fifty dollars a month will force people out of their homes.

    I don’t know if this is a good deal or not but I am concerned that we are projecting that the status quo will remain viv a vis water for the next fifty years or so. That is very unlikely. I blogged from my iPhone the other day about how we lived in the desert and rich correctly chastised me that we do not. But we live in an arid zone in an arid state. Water will become more scarce and climate change will exacerbate this problem.

    Has any of this been considered? Maybe locking in some water rights now at least gets us a seat at the table? But it bothers me that no one is talking about conservation. Perhaps new housing shoul mandate native plants? Recycle water? Republican Irvine California is far more progressive than we are when it comes to water.

    I am not an expert on water but I am sure we will have less, it will cost more, and we should think about putting less water on our lawns (and yes rich our farms as well) now. Please tell me that someone smart who knows water is thinking about theses issues.

  6. Don Shor

    “Perhaps new housing should mandate native plants? “
    Terrible idea, for many reasons, just beginning with what you exactly mean by “native.”

    “What would you have considered a smarter deal David?”
    Unfortunately, David has never provided any alternative to the current discussion of sewer and water problems. He focuses entirely on the costs. In response to my question, many blog posts ago, about how Davis should deal with the water effluent problem, his response was (paraphrasing) that the city should seek a waiver to allow it to violate clean water requirements. Nobody who opposes this water deal has proposed any reasonable solution to the problem of Davis water quality.

    — The city will have to replace all of the wells within the next decade or so.
    — The city’s current water supply will, in the near future, violate discharge standards as they are being steadily tightened by state and federal government.
    — Continuing to use our ground water for 100% of city water needs would require that the city entirely upgrade the sewer system, immediately.
    — Thanks to persistent pressure from Sue Greenwald, the city has been told by outside experts (paraphrasing again) that bringing in the surface water would forestall, perhaps indefinitely, the need to upgrade the sewer system because the clean water would take care of the effluent problem.
    — The city cannot, alone, fight the state or federal governments on this issue of water quality standards. Cease-and-desist orders and fines have been in place for the city of Dixon for several years now. The agencies that regulate the water supply don’t have the authority to change the regulations they are implementing. They can only allow continued pollution if there is a remediation plan in place. And I have to ask: do participants on this blog really propose that Davis violate clean water standards?
    — City residents cannot conserve their way out of this conundrum. In fact, conservation has almost nothing to do with this issue. It is a water quality problem primarily. In the long run, it is a water supply problem as well, since continuing to rely on ground water as the city grows over the next 50+ years will eventually lead to shortages. But that is not a current issue.
    — Finally, demonizing farmers is pointless (continuing from the previous thread). Agricultural water use and city water use are not connected.

    If cost is an issue, the current tiered use rate can be adjusted to make conservation reduce costs for anybody who chooses to use water more carefully. That can be done by the city council right now, anytime somebody chooses to introduce an agenda item and act on it. If cost is the issue, take action now to make it less of an issue.

  7. Don Shor

    “Water will become more scarce and climate change will exacerbate this problem.”
    There are something like 300 water districts in California. Some have ample supplies well into the future. Others can barely sustain two years of drought. We happen to be in a watershed that would likely see more rainfall, so if reservoirs were added or expanded (as proposed in the upcoming water bond) then water districts on this side of the Valley would be in better shape. Cities that rely on Lake Berryessa are also in good shape (sad to say, Yolo County and Davis missed that opportunity 50 years ago when they declined to participate in that project). On the other hand, EBMUD is a real threat to local water supplies as they have barely enough storage now.
    The problem with broad generalizations about California’s water supply is that the districts vary so greatly as to how well they’ve planned and developed their facilities.

  8. E Roberts Musser

    My thoughts:
    1) Rate hikes to water/sewer bills are going to be astronomical – the city’s estimates are repeatedly and notoriously low-balled to the public every time. In previous discussions, I have heard admissions from city staff that indicate the rate hikes will more likely be three times what they are now and could be four times that.
    2) Many folks, like seniors on fixed incomes and young families operating on a shoe-string budget are not going to be able to absorb these kinds of costs, and may be forced to leave Davis if they cannot somehow come up with the cash. That is their reality. For seniors, it may force them to drain the equity from their homes through reverse mortgages. What happens to property values when a number of homes have to be foreclosed on bc of the astronomically high water/sewer rates that cannot be paid?
    3) It is clear that the Sacramento River is not going to be a sufficient source of water for the summer months. Hence the need to purchase water from Conaway Ranch. Of course Conaway Ranch owners are willing to give easements free of charge for pipelines. They stand to gain huge amounts of money from this deal. What kind of a deal is the city striking w Conaway Ranch for water rights? My guess is Conaway Ranch owners are going to be able to charge whatever the market will bear. And yet the city wants to claim your water bills are only going to double? How could they possibly know what Conaway Ranch owners will charge in the future? I haven’t heard the city say they have locked in a price that Conaway Ranch will charge. The sky’s the limits folks…
    4) The entire Delta issue means we have no idea how much water we will be able to siphon from the Sacramento River at any one time. Which makes us even more dependent on Conaway Ranch for water, and that much more at their mercy when it comes to the price of the water they are willing to sell us. Conaway Ranch owners must be drooling at the prospect. The JPA is admitting as much…
    5) Water conservation is a red herring. 95% of the water is used by farmers in the Sacramento region, only 5% is residential use. We cannot conserve our way out of this problem. Any conserving by residential users will be a token effort, that will not significantly impact the water problem – even if residential users stopped using water altogether. Furthermore, as Sue Greenwald has said repeatedly, water conservation will not assist in the sense that the fixed costs of both the water and sewer projects still has to be paid for, regardless of how much water we conserve.
    6) In talks w Bob Weir of public works some years ago when this issue raised its ugly head on the radar screen, he said to a subcommittee of the Senior Citizens Commission no cost-benefit analysis has ever been done to determine if the new water standards being required (passed by Congress way back in 1972) are really worth while. They very well may be another “feel good” solution in search of a problem. The only reason we are going through this exercise of creating a surface water project/wastewater treatment plant upgrade is bc of the new water standards and the fact that if we do not comply w them, the city can be fined by as much as $10,000 per day.
    7) I don’t necessarily have answers to the water issue. The feds have us over a water barrel, so to speak. Frankly, it would have been wise for our elected state leaders to put pressure on the US Congress to take another look at this issue, especially in light of the state of the economy. But unfortunately the “green” lobby contributes heavily to campaign coffers of politicians. The “green” lobby never knew a tax dollar they did not want to spend on environmental issues, no matter how onerous or whacky. Clean water is a laudable goal, but not if it is so stringent it will literally bankrupt the nation’s taxpayers.
    8) Our local politicians, especially those who are members of the JPA, should be working assiduously to broker favorable deals with Conaway Ranch to limit the cost of water we must buy from them. But I’m not even sure they can, and if they could, I’m not sure they would have the spine to do it. Tough negotiations do not seem to be what we get from our elected officials or city staff these days. It is easier to assume taxpayers will just have to eat the cost, whatever it is. The brokers of this deal should not be “thumping their chests” or “congratulating themselves” in any way. This is a tough situation, which will have far-reaching consequences, some of which will not be pretty. Pretending otherwise is disingenous. Citizens need to be prepared for the fallout that is coming. It should not be sugar coated.

    TIGHTEN YOUR BELTS FOLKS, WE ARE IN FOR A ROUGH RIDE. I HOPE I AM PROVED WRONG, BUT I VERY MUCH DOUBT IT…

  9. E Roberts Musser

    Don Shor: “If cost is an issue, the current tiered use rate can be adjusted to make conservation reduce costs for anybody who chooses to use water more carefully. That can be done by the city council right now, anytime somebody chooses to introduce an agenda item and act on it. If cost is the issue, take action now to make it less of an issue.”

    This is already being done (water rate is based on consumption – those who use less pay less). Everyone pays a base rate, then once the base rate is reached, the rate is then based on consumption, until it reaches a cap of $200. I don’t know how long the cap will last – if that was a temporary fix to inordinately high rates (that had increased as much as 400%), and an adjustment of rates will be made, or if the cap is permanent. I’m assuming the cap is temporary only and the rate system is being tweaked.

    Don Shor: “– Thanks to persistent pressure from Sue Greenwald, the city has been told by outside experts (paraphrasing again) that bringing in the surface water would forestall, perhaps indefinitely, the need to upgrade the sewer system because the clean water would take care of the effluent problem.”

    My understanding is that the JPA is moving forward w both the wastewater treatment plant upgrade and water project at the same time. The “clean” water from the Sacramento River/Conaway Ranch apparently did not take care of the sewer problem. One of the ways suggested to forstall the sewer project was to discharge gray water into Conaway Ranch, but my understanding is that when the Conaway Ranch went up for sale, that option was taken off the table. Sue Greenwald can chime in here if I am mistaken in any of this…

  10. Rifkin

    [b]”3) It is clear that the Sacramento River is not going to be a sufficient source of water for the summer months. Hence the need to purchase water from Conaway Ranch.”[/b]

    Am I wrong to think that the Conaway Ranch water is also Sacramento River water?

  11. Frankly

    “Is there anything we can do to change this outcome?”

    Isn’t this what the Tea Party is attempting to do?

    As an aside, I find it a bit ironic that so many affluent Davis parents spend so much time, effort and dollars to make sure their little darlings graduate high school with their 4.2, and then graduate from a top college… while meanwhile supporting political parties seemingly bent on destroying the economic infratructure that these kids’ wonderful education would apply to.

    However, I think I hold a little more optimism on where the US economy is headed. This assumes that more right-leaning free-market, lower-taxing, less-spending, smaller government politicians take control.

  12. Don Shor

    Am I wrong to think that the Conaway Ranch water is also Sacramento River water?
    Yes it is.

    Isn’t this what the Tea Party is attempting to do?

    Personally I have no clear idea what this amorphous movement called the Tea Party stands for. But if you are referring to regulations involving water quality, they have been developed and extended under both Democratic and Republican administrations. I doubt either party would be willing to press for weaker water quality standards.

  13. rusty49

    Comeon Don, Jeff was referring to the runaway debt and the future high inflation that everyone knows is coming. It’s no secret that the Tea Party is for fiscal restraint.

  14. Rifkin

    [i]”This assumes that more right-leaning free-market, lower-taxing, less-spending, smaller government politicians take control.”[/i]

    The problem with “conservative” ideology is that it is ideology. It almost doesn’t matter what the facts are when they run counter to that ideology*.

    In the case of our trade deficit–which, it should be understood, is the byproduct of our low savings rate**, our high consumption rate and our huge and growing debt–the right-wing offers up the notion that we need to cut taxes so the federal government will be deeper in the red. Huh?

    They seem to think that by cutting taxes that will result in reducing spending. The fact that this has never happened does not seem to change their head-in-the-sand ideology.

    The federal government currently spends about 20% of its money on Social Security. This percentage is apt to go up dramatically, as the youngest baby boomers turn 65 next year. I have yet to hear a conservative elected official call for a reduction in Social Security payments. When the Tea Partyists were dancing about djarling, I don’t recall them saying, “Everyone one Social Security needs to get a 25% cut in benefits.”

    The Department of Defense, 19% of our budget, is the next biggest consumer of federal dollars. Even though there are a small number of sensible conservatives who want us to get the hell out of that mess in Afghanistan, almost no conservatives are saying, “We can no longer afford our global military welfare state. Let’s cut the defense budget by 75%.”

    Non-senior, non-farmer welfare makes up 16%. I do hear many conservatives calling for cuts in this one “entitlement” area. However, when they just made their deal with President Obama to keep the cuts in the top tax rates, the trade-off was the acceptance of more and more money into this sink hole in the budget.

    Medicare, which is no longer self-sufficient, makes up 13% of the federal budget. Our problem here has barely started. In the next 10 years the demand for Medicare will double. I don’t hear any elected conservatives calling for any real changes in this program. In fact, when the Tea Partyists were at their peak last summer, many of them were outraged about Obamacare, because they are on Medicare and fear Obamacare will harm Medicare.

    Medicaid and children’s healthcare is the next 8% of the budget. Again, what elected conservatives are calling for the end of this aid to the needy?

    After Medicaid comes interest on the debt at 4.6%. This part of our budget is really going to explode once the dollar loses half or more of its value due to the trade deficit.

    Most of the rest of the budget is just the expense of keeping the federal workforce employed and the direct costs of paying for equipment, supplies, repairs, etc. over the various departments. Outside of that expense we have some hefty bills for farmer welfare, education, veterans, etc.

    *Very few people who call themselves conservatives really care much about the spending side of the equation, or if they care, they usually are ignorant about where we are spending so much money. (An exception is a guy like Alan Simpson, who has been drummed out of the conservative movement because he is not sufficiently anti-gay or pro-Christ.)

    **Lately our savings rate has come up a bit. It needs to come up much more. Toward that end, I read a very interesting article in the National Bureau of Economic Research ([url]http://www.nber.org/papers/w16433.pdf[/url]) a while ago about how other countries encourage savings–by way of a savings lottery.

    Here is how it works: You place say $100 in your lottery savings account. Say 10,000 others do the same thing–so you get a pool of $1 million. No one with a savings account earns any interest. You can withdraw 100% of your money any time you like. But say those 10,000 people kept their $100 accounts in place for a year, and the pool earned $50,000 in interest. At the end of a year, a lottery is held and one holder of a $100 savings account wins the entire $50,000 prize. No one else gets any prize, but they also don’t lose any of their principal. If you want to have a better shot at winning the prize, you can open up multiple $100 accounts. This idea may seem quite strange on its face, but the countries which have these lottery savings schemes have found they work. Many have weekly or monthly or bi-monthly lottery payouts, but the idea is the same–they encourage people who would otherwise be wasting money to save it, and that savings helps finance economic investments.

  15. Frankly

    “Personally I have no clear idea what this amorphous movement called the Tea Party stands for.”

    TEA = “Taxed Enough Already”

    The Tea Party movement, despite the left media attempts to portray it as some geriatric angry white power movement, exists only because of runaway government spending and the growing economic timebomb of our national debt. The movement is well-funded, well-organized, it has political momentum and is growing every day our politicians continue to spend what they don’t have, and tax what they don’t own.

    We are either heading to a massive economic disaster like Mr. Rifkin believes, or voters start electing and supporting real leadership not afraid to cut out all government waste and non-essential spending. My thinking on this is that the nation will figure it out, but CA will not.

  16. Dr. Wu

    I guess I am alone on this one

    agreed some districts will have water and farmers use most of the water in our state

    but that does not rebut the fact that water will become scarcer and the rules will change just as our untouchable pensions and Medicare will be altered

    I just think anyone who plans for fifty years assuming the status quo is mistaken

  17. Frankly

    “In the case of our trade deficit”

    Rich: My point, and the Tea Party issues, was/is the national budget deficit, not the trade deficit. The trade deficit is another matter. I am no economics wiz, but I think that our savings rate has little to do with our trade deficit except that what we don’t save we spend. Even with low individual savings rate, credit has been plentiful and cheap. The US has had a consumption problem primarily because we have been so relatively economically self-confident, and partially because credit has been so cheap… and that was due to (and still is due) to the Fed keeping interests rates too far below market equilibrium for political or legacy reasons.

    Like you point out, trends are on the rise for savings rates. (btw, I would support tax incentives that encourage more savings.) There is no real estate equity to borrow on, and the credit game has changed for good. We will likely never go back to having the level of confidence in our collective and individual purchasing power. The existing old-guard politicians will continue to try the same old tricks that used to result in a successful reboot… but they will not this time… we need a completely new computer system.

    ”*Very few people who call themselves conservatives really care much about the spending side of the equation”

    I think there are very few conservatives that DON’T care about the spending side of the equation if you are talking about government spending, but I would agree that conservatives in general like to encourage consumption as it is requires to support they supply-side economics that they believe in. What we need is a new model where conservatives (e.g., business owners) look to more foreign consumers to satisfy their need to validate Reaganomics.

    I hear you on the difficulty cutting spending, but look at it this way:

    In 1960 when the top Fed income tax rate was 90%, defense spending was 9.3% of GDP and non-defense spending was 8.5% (for a total of 17.8%). In 2009, government spent 20.7% of our total national economic output; and out of that only 4.5% went to defense. However, 16.2% went to non-defense. Basically, we reduced the top marginal tax rate 60%, reduced military spending by about 50% and doubled the rest of the cost of government.

    Here is a great page that illustrates the problem at the Fed level: http://www.presidency.ucsb.edu/data/budget.php
    Out of the last 79 years, only 13 resulted in a surplus. Government overspending has averaged 2% per year. How many years can we continue to spend more than we take in? And, if we increase taxes, what proof do you have that government will then live within its means?

  18. Don Shor

    I think that the last fifty years give a good indication of the range of water supplies we might need to plan for. We have had heavy rainfall periods, short extreme droughts, longer periods of low rainfall, and so on. Climate change would likely increase the range and frequency of extremes: more flood years, more drought years — and many years in which water supplies would be within historic average range.

    With adequate storage and diverse sources, Yolo County water users can be less affected by California’s extremes of water supply than other parts of the state. Yolo County has water from the coast range (Indian Valley), from wells, and soon from the Sierra snowpack that supplies the Sacramento River.

    I believe that every water district needs to plan for a 4 – 6 year drought. In many cases that will require additional reservoir space. All have been directed to develop water conservation programs, and many have done so. Some districts have achieved good success; here is a chart of Long Beach residential water use:
    [url]http://www.everythinglongbeach.com/wp-content/uploads/2010/05/water-use.jpg
    [/url]
    It seems to me that water conservation measures in any particular water district should be proportional to their supplies. If Davis retains some wells and develops surface supplies, strict water conservation would only be necessary during severe droughts such as we had in 1976 – 77. The years in which Davis would likely have less water available would be those in which the whole state has less water available. Anyone who lived here during the drought of the 1970’s remembers what citizens were dealing with everywhere. But availability of ground water buffered the effects of that drought locally; my friends in the Bay Area faced water rationing, while Davis residents were asked to cut water use 10%. Ground water would still be available, so long as a reasonable infrastructure of wells remains in place. In an emergency, the governor has the power to suspend environmental regulations for a period.

  19. Don Shor

    It’s no secret that the Tea Party is for fiscal restraint.

    There is no central organization, but I have yet to see any group’s policy position, or any public official allied with the Tea Party, who has advocated positions that would result in fiscal restraint. Since military spending, Social Security, and Medicare are all off limits, the only fiscal restraint they advocate seems to be about earmarks (a trivial part of the budget), spending on social welfare that benefits other people, and any kind of fiscal stimulus.

    Out of the last 79 years, only 13 resulted in a surplus.
    9 of them under Democratic administrations: Truman, Johnson, and Clinton. Maybe they should be the heroes of the Tea Party movement!

  20. Rifkin

    [i]”I think that our savings rate has little to do with our trade deficit except that [u]what we don’t save we spend[/u].”[/i]

    That’s exactly why our trade deficit has a lot to do with our very low savings rate. Instead of financing our own investment, we are borrowing from foreigners, continually getting ourselves more and more in hawk.

    [i]”Even with low individual savings rate, credit has been plentiful and cheap.”[/i]

    Thanks to foreigners essentially saving for us by holding dollars. Yet with the inevitable collapse of the dollar–it’s coming, trust me–that situation ends. Our savings rate will then, forcibly, go up by a lot.

    [i]”The US has had a consumption problem primarily because we have been so relatively economically self-confident, and partially because credit has been so cheap …”[/i]

    I’m not sure if any of that has any basis in fact. I think we tend to save too little because we don’t have the proper incentives to save. And part of our problem is cultural. Since the 1960s our national culture has become one of “live for the present” and “don’t worry today about what will come tomorrow.”

    [i]”… and that was due to (and still is due) to the Fed keeping interests rates too far below market equilibrium for political or legacy reasons.”[/i]

    I don’t think that has any basis in fact. The Fed policy with regard to its lending rates to the big banks has been (since Jimmy Carter’s Fed Chief, Paul Volcker, tamed U.S. inflation) to set the interest rates at a level which resulted in “price stability.” Alan Greenspan and Ben Bernanke have followed that same course.

  21. Frankly

    “9 of them under Democratic administrations: Truman, Johnson, and Clinton. Maybe they should be the heroes of the Tea Party movement!”

    I think Truman and Johnson would be a closer ideological match to Tea Party than the current Democrat party. Clinton was saved by Tip O’Neil and the tech stock bubble.

    However, I get your point that Republican politicians are culpable too. I was not a fan of spending under W.

  22. craised

    Why not make a silk purse out of a sows ear?
    We could make this little problem pay for itself by simply using solar energy to super heat our sewage. Which would then turn turbines to produce electricity. The excess heat could be used to extract the impurities out of our well water. Just think, we could kill two birds with one stone. And, as a bonus we would save money on our electricity bills….

  23. J.R.

    “Since military spending, Social Security, and Medicare are all off limits, the only fiscal restraint they advocate seems to be about earmarks (a trivial part of the budget), spending on social welfare that benefits other people, and any kind of fiscal stimulus.”

    Who says they are off limits? Even if every Democratic politician says so, the laws of mathematics say otherwise.

    If the TEA party advocates cutting earmarks (a trivial part of the budget), spending on social welfare that benefits other people, and any kind of fiscal stimulus, then they are making a lot more sense than most comments on this topic.

  24. Rifkin

    [i]”I think Truman and Johnson would be a closer ideological match to Tea Party than the current Democrat party.”[/i]

    I don’t know what your basis for saying that is. Truman was a big-government liberal. He believed very strongly in the New Deal programs and so on. He was also fiercely partisan and a great believer in organized labor. Johnson was similar, but more so. Johnson increased every possible welfare program in existance when he came into office and with the Great Society created a number of new ones, the most important of which was Medicare. Both men also signed large increases in taxes while in office. I don’t see how that meshes with the Tea Party line.

    [i]”Clinton was saved by Tip O’Neil and the tech stock bubble.”[/i]

    By Tip O’Neill? Tip retired from Congress six years before Clinton became president.

    I’m surprised you would not instead credit Newt Gingrich and the class of 1994. I think there is a basis for that claim. In my opinion Clinton was a good, though not great president who improved markedly after his party lost the Congress. Clinton’s greatest accomplishments–NAFTA, GATT and the welfare reform and later all of his balanced budgets–came after the November, 1994 rout of his party.

    [i]”However, I get your point that Republican politicians are culpable too. I was not a fan of spending under W.”[/i

    It seems to me that you have to judge what the Republican Party stands for based on what it did when it was last in office. And from that point of view, the Republican Party stands for massive increases in welfare (to seniors and wealthy farmers), massive increases in all other forms of domestic spending plus military spending, tax cuts, huge deficits, and war. They give a lot of lip-service to making America a Christian nation and hating gays and stopping stem cell research and a belief in pseudo science and Creationism or some other nutty nonsense, but that was mostly a sideshow. The real action was destroying our fiscal sanity by increasing spending, launching two wars and cutting taxes.

  25. Frankly

    I don’t know what your basis for saying that is.

    I seem to recall reading that Truman had one of the lower increases in non-defense spending. Johnson was somewhere in the middle. Of course Taft and crew kept him from getting his way, so maybe you are correct and Truman would fit right in with the Obama / Pelosi / Reid show. Both men would have better matched the Tea Party position on the Second Amendment, and probably would not have supported the modern left attacks on Christianity.

    “By Tip O’Neill? Tip retired from Congress six years before Clinton became president. “

    Wow, I will blame the cold medicine for my brain malfunction. Thanks for taking me to task. Yes, is was Newt Gingrich, and the GOP had a lot to do with Clinton’s fiscal record as President. So did the tech stock bubble… which popped just as he was leaving office.

    “It seems to me that you have to judge what the Republican Party stands for based on what it did when it was last in office.

    – massive increases (to seniors and wealthy farmers) – PROBLEM,
    – massive increases in all other forms of domestic spending – PROBLEM
    – plus military spending – NOT A PROBLEM, SAFETY IS REQUIRED ROLE OF GOVT
    – tax cuts – NOT A PROBLEM, WE ARE ALREADY TAXED TOO MUCH
    – huge deficits – A BIG PROBLEM
    – and war – THE GOP DID NOT CAUSE THE WAR, GLOBAL JIHADISTS DID… HOWEVER, THE GOP KEPT US SAFE AFTER 9/11… THE MAIN THING THE FEDERAL GOVT IS SUPPOSED TO DO.

    “They give a lot of lip-service to making America a Christian nation and hating gays and stopping stem cell research and a belief in pseudo science and Creationism or some other nutty nonsense”

    Who are they? How about an extreme minority given voice by the liberal media only too happy to help destroy the GOP brand. I suppose since I see the Democrat party controlled by the extreme left, I should accept the view that the GOP is controlled by the extreme right. After all, we are a polarized nation led by the most polarizing President and continually enflamed by a media that thrives on the conflict. There are nuts and nutty ideas on both extremes. As far as I am concerned we need one if we have the other. Let them cancel each other out.

  26. David M. Greenwald

    Guys, you need to keep this at least remotely on topic. Truman and Johnson have nothing to do with the water deal. Don, please delete any further discussion on this.

  27. Frankly

    “Guys, you need to keep this at least remotely on topic”

    The ideological debate knows no boundaries! I think part of the topic is the larger issue of government spending and taxation. However, point taken.

  28. Rifkin

    [i]”I seem to recall reading that Truman had one of the lower increases in non-defense spending. Johnson was somewhere in the middle.”[/i]

    Truman and Johnson were both–just like Eisenhower and Kennedy in between them–great believers in federal water projects and the like. Mostly in his role as the leader of the Senate and less so as a member of the House before WW2, LBJ was the ultimate pork barrel politician who (while always having his name attached to such things) truly believed in using the federal government to build up local infrastructure. No American played a bigger role in “rural electrification” than LBJ.

    With regard to Truman’s domestic spending, you have to look at it in context, more than with regard to his political philosophy. From 1944-46, Truman had Democrats running Congress, so he could expand domestic programs, and he did, especially after VJ-Day. But we had a terrible economy in 1946 with high unemployment and that resulted in a Republican takeover of Congress for the next two years. Truman vigorously tried to expand federal spending to relieve the unemployment, but the conservatives in his party–keep in mind that the South was still all Democratic–and the Western Republicans checked him.

    After his re-election in 1948, Truman briefly expanded domestic government spending. But then in 1950 the Korean War began and the money flowed into the DoD.

    Johnson’s domestic programs, likewise, were partially defunded in order to fund the Vietnam War, which greatly picked up two years after JFK was killed.

  29. E Roberts Musser

    To Don Shor and Rich Rifkin: From the Sac Bee –
    “Prominent Sacramento developer Angelo K. Tsakopoulos is negotiating with Yolo County and the cities of Davis and Woodland over water rights and habitat mitigation as he moves to buy the 17,300-acre Conaway Ranch, with its vast resources of water and open space.

    On Tuesday, officials with the Woodland-Davis Clean Water Agency announced they had reached proposed agreements with several parties, including a limited-liability corporation affiliated with Tsakopoulos, to buy Sacramento River water that would be piped across Conaway Ranch from an intake on its eastern boundary.

    The cities are desperate for new, cleaner water sources to replace aging wells and have embarked on a $325 million joint project under pressure from state regulators.

    Under the proposal, the water agency would pay $2.6 million in the first year, starting in 2016, with 2 percent increases each year afterward through 2040, said Kim Floyd, agency spokeswoman. In exchange, the cities would get permanent rights to 10,000 acre-feet of surface water annually, she said.

    Agency Chairman William Marble, a Woodland city councilman, said the agreements were “paving the way for a high-quality water supply for our cities at the most affordable price.”

    The proposals still face approval by the agency board and the Davis and Woodland city councils, with public meetings scheduled Tuesday.

    Floyd said the agreements will likely be posted today on the agency’s website, http://www.wdcwa.com.”

    So it sounds like a deal has been worked out for a fixed water price. But what is not clear to me is whether the JPA is purchasing easements from Conaway Ranch, or actual Sacto River water. To me it is unclear from the article. However, not for one minute do I believe the water/sewer bill for residents of Davis is only going to double, the estimate the city gives at the moment… not based on what I have heard over the last several years sitting in on the water discussions…

  30. davehart

    From the Davis Enterprise article: “If you just turn on your tap at home and let it run down the train, that does not meet our discharge requirements,” Navazio said. Astounding. David, what do you make of such a statement? Waste water and water supply are inextricably bound together. Davis residents deal with outstandingly bad water quality when they (1) “soften” the water and thereby add to the salt load (sodium or potassium chloride) of the waste water stream; or, (2) use tap water “as is” and increase the use of detergents, plumbing fixture replacements and other cleaning products which also add to the waste water problem. In both cases, we are already shouldering additional costs that could be avoided if water quality were higher. An estimate of these costs would be a welcome addition to our discussion.

    The only other comment after reading all the exceedingly long posts is that conservation progress will be greatly enhanced based on unit pricing. You talk about raising water prices from $40 to $90 or even $150 per month but we all seem to be sleepwalking when it comes to seeing our healthcare premiums go from $1,100 a month (for two people) to $2,200 per month by 2020 (just ten years from now). This tells me we all have much bigger fish to fry in our futures than worrying about the best engineering solution to water and water treatment.

  31. E Roberts Musser

    davehart: “The only other comment after reading all the exceedingly long posts is that conservation progress will be greatly enhanced based on unit pricing. You talk about raising water prices from $40 to $90 or even $150 per month but we all seem to be sleepwalking when it comes to seeing our healthcare premiums go from $1,100 a month (for two people) to $2,200 per month by 2020 (just ten years from now). This tells me we all have much bigger fish to fry in our futures than worrying about the best engineering solution to water and water treatment.”

    That $150 a month water/sewer bill my determine whether you can even pay for health insurance. All of these costs add up…

  32. Rhinochaser

    ERM: From what I’ve read, the cities through the WDCWA are paying for the Sacramento River water, while the use of the intake facility and all of the easements are being provided at no additional cost to the cities.

    Does anyone have any idea what the value might be of the intake facility or the easements? Bill Marble seemed to indicate that they were substantial.

    David: You’ve indicated that the 2% annual increases for the water purchase are on top of inflation, but the documents I’ve seen don’t indicate that. What’s your basis or source for the statement that the 2% increase is obviously on top of inflation? Are there some other documents that I haven’t seen posted? It’s not obvious to me…

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