By E. Roberts Musser –
A Proposition 218 notice is on its way to citizens’ mailboxes, to let everyone know the city plans to significantly increase water rates by approximately threefold. Go to the City of Davis website, then click on the water rate calculator. It will determine what your water bill will look like by the year 2016. Of course that doesn’t really reveal what your City of Davis bill will ultimately be. Sewer and sanitation rates are going to go up as well, but not by nearly as much as water rates. The less water you use, the smaller your total bill should be, since water and sewer rates are based on consumption.
So how do ratepayers decide what is in their best interests in a situation like this? To protest or not to protest is the $325 million dollar question! Let me lay out for you the issues and concerns as the cities sees them, and then give you some arguments that have been bandied about by experts, City Council members, the news media, and various citizens. Then the reader can decide whether to support this project or turn in a written protest.
CITY’S POSITION:
Issues/Concerns
- Woodland and Davis are totally dependent on groundwater from mid- and deep-level aquifers as their sole source of water.
- The groundwater from these wells that has been relied upon may not be adequate to meet future demands.
- The federal government has put into place more stringent drinking water regulations.
- There are more restrictive federal wastewater discharge regulations, with potential costly fines for noncompliance.
- However, high household consumer costs will accompany this new surface water project. But costs will be kept to a minimum through the following methods: a) only building that which is absolutely necessary; b) extending financing over a longer period of years which will keep rates down in the shorter term; c) through water conservation cut down on cost of overly extensive wastewater treatment plant upgrades.
It should also be noted a number of alternatives to the surface water project were investigated. Experts determined discharging wastewater onto Conaway Ranch was a short term solution only; West Sacramento was not interested in sharing its water capacity with either Davis or Woodland; installation of pipelines along the railroad right of way was fiscally infeasible because the railroad was unwilling to share any of the cost.
- Improve current water supply yield and quality. This should lengthen the life of appliances that use water, such as washing machines and dishwashers.
- Will result in compliance with the new federal regulations for drinking water and wastewater discharge.
- Will minimize environmental impacts by significantly reducing the amount of minerals in the discharge water that goes into the Delta.
- Broadens the support portfolio of water supplies, by adding surface water; and creates aquifer recovery storage wells to capture and hold local rainwater.
- Integrates aggressive water conservation elements.
- Addresses the subsidence problem of well water.
The surface water project also satisfies the state’s goal for conjunctive water use. From the website watereducation.org: “Conjunctive use is the coordinated management of surface water and groundwater supplies to maximize the yield of the overall water resource. An active form of conjunctive use utilizes artificial recharge, where surface water is intentionally percolated or injected into aquifers for later use. A passive method is to simply rely on surface water in wet years and use groundwater in dry years. More than 65 water agencies in the state operate groundwater recharge programs. The success of many of these programs, however, depends on purchasing available surface water from other users. Conjunctive use is becoming a key part of the state’s overall water management strategy in terms of coping with a growing population.”
Issues/arguments posed in opposition to or for the purposes of delaying surface water project:
- Some have posited the theory that courts have ruled cities don’t have to comply with the Clean Water Act standards. Take note of the following decisions:
- Tracy decision – from here: “Tracy won this battle, but the State Board may still win the war. It could eventually hold Tracy responsible after jumping through the right analytical hoops – in particular, evaluating the economic costs of requiring that municipal dischargers meet the salinity objectives”.
- Manteca decision – from here: “In a nutshell, Wagner ruled that federal water officials must consider humans along with fish when it comes to divvying up how California’s most precious resource – water – is discharged or moved through the Delta. The judge also directed the federal government to stop using what he termed “guestimations” instead of precise scientific studies to determine the exact impact reduced water would have on the fish population.”
- Woodland decision – from here: “For selenium violations alone Woodland has been fined up to $12,000 a month since December and fines are only expected to get steeper by 2017.”
- Dixon decision – from here: “Removing the water softeners had come as a response to the State Water Board, which had deemed that salinity levels in Dixon’s groundwater were too high. Back in 2008, the state had fined the city $220,000 over this issue.”
- Vacaville decision -from here: “The City of Vacaville has been assessed a fine of $72,000 by the Central Valley Region Water Board for exceeding discharge standards over the last four years at the Easterly Wastewater Treatment Plant.”
- There is also an argument the SWRCB is moderating its requirements and may be more flexible in its negotiations. Please reread the aforementioned cases for context and then decide if this contention has any merit. According to Greg Meyer, director of Public Works in Woodland, the SWRCB is serious about compliance with the new standards and will fine cities who fail to adhere to them in a way to make sure it hurts.
- Critics have suggested delaying this project for 10 years. Nevertheless two UCD experts insisted the surface water project should be completed as soon as possible. The SWRCB has indicated it is serious about compliance with the new standards by 2017. It is possible the economy will have improved in 10 years so people can better afford rate hikes, but construction costs for the project will have increased if the economy does improve. Thus the project costs could be far more in 10 years time.
- There is an indication “experts” feel our city’s wells will not run dry for forty to sixty years. But there are very real concerns about subsidence of our groundwater wells. For an excellent article about subsidence, read it in full at the following website: here. From the website:“…ongoing subsidence behind the levees reduces levee stability and, thus, threatens to degrade water quality in the massive north-to-south water-transfer system….The statewide water transfer system in CA is so interdependent that decreased water quality in the Delta, whether due to droughts or level failures, might lead to accelerated subsidence in areas dependent on imported water from the Delta…”
- It is posited water conservation will not help defray the expense of the surface water project, because capital costs are fixed and must be paid regardless of how much water is used. However, it is my understanding water conservation will assist in keeping costs of the wastewater treatment plant upgrades down and obviate the need for some of it.
- There is an accusation that inaccurate information is being disseminated about this project. Yet currently the JPA and both cities are being quite transparent about the reasons behind the project and its cost. Other cities have attempted to defy the SWRCB, fighting tooth and nail against compliance with the new standards, without much success and despite claims to the contrary. (See previous discussion.)
- There is also a claim the proposed low income subsidy for water rate increases is “misleading”. In consequence the proposed 15% water rate reduction for those earning $36,000 a year or less has been tabled for further study. It should be noted a small rate reduction is better than no rate reduction. There is no question the water rate increases will hit low income citizens, particularly senior citizens on fixed incomes, very hard. But so will steep fines to the city for a failure to comply with new federal standards.
- A concern has been expressed about financing this project with Woodland. Should Woodland fail to obtain the necessary funding, there is an expressed fear the project is so far along in planning, a push will be made to have Davis agree to be jointly liable for the funding. Should Woodland default, Davis would be left holding the bag for the entire cost of the project. Supposedly this same type of scenario played out in Birmingham, AL – with disastrous results. However in that case, corruption was involved. See JeffersonCounty,Alabama: “On March 7, 2008, Jefferson County failed to post $184 million collateral as required under its sewer bond agreements, thereby moving into technical default. In February 2011, Lesley Curwen of theBBC World Service, interviewed David Carrington, the newly appointed president of the commission, about the risk of defaulting on bonds issued to finance “what could be the most expensive sewage system in history.” Carrington said there was “no doubt that people from Wall Street offered bribes” and “have to take a huge responsibility for what happened.” The system was repaired and upgraded a few years ago because of environmental problems. Wall Street investment banks includingJP Morganand others arranged complex financial deals usingswaps. The fees and penalty charges increased the cost so the county now has $3.2 billion outstanding. Some county officials have been prosecuted for accepting bribes from bankers and are now in prison or awaiting sentence. Carrington said one of the problems was that elected officials had welcomed scheduling with very low early payments so long as peak payments occurred after they left office. The debt structure now was such that there was no way that 700,000 people could pay it back over 30 years. The job could have been done for somewhere between $1.2 billion and $1.5 billion but shouldn’t have cost 3.2 billion. Those selling the bonds weren’t interested in whether they could be repaid as they would have moved on. The county was not able to pay its bills and now needed to restructure its debts to avoid bankruptcy.”
- Some are pushing to delay the project, alarmed that water rate increases would make it much more difficult to get necessary school parcel tax extensions or increases approved. However, there are many competing interests for tax revenues, including schools, water, parks, roads, etc. It becomes a question of personal priorities.
- It has also been pointed out that different ratepayers will be receiving varying amounts of river water mixed with their well water. This is because the delivery system will not transport equal amounts of surface water to all parts of town. Yet ratepayers are expected to pay equally for the project, though they may not benefit uniformly. But this is true of numerous government services, where many who do not benefit directly must contribute for the good of all, e.g. schools.
- Some believe this project is developer driven, and merely a thinly veiled attempt to accommodate more housing.
- Others think Sacramento river water is more contaminated than groundwater, because it contains unknown pharmaceuticals that cannot be removed from the water.
- There were complaints the public was kept in the dark about this project until the last minute. Yet the issue has been covered widely in the Davis Enterprise, the People’s Vanguard of Davis, at City Council meetings, and mailers have been sent out from the Dept. of Public Works. However, citizens often do not keep up with the news, do not have computers to log onto the city website, do not attend City Council meetings, and throw away mailers without reading them.
- Possible fluoridation of the surface water for each city has also become a vitriolic controversy, and another reason to oppose the surface water project.
Lesson to be learned: Stay informed, listen to all views, but ultimately decide keeping in mind your own value system and financial situation.
Elaine Roberts Musser is an attorney who concentrates her efforts on elder law and aging issues, especially in regard to consumer affairs. If you have a comment or particular question or topic you would like to see addressed in this column, please make your observations at the end of this article in the comment section.
Elaine
You continue to impress me with your writing and reporting skills! Well done.
Elaine… While your article is constructed to present the appearance of a even-handed factual presentation, it would have been “helpful” to the reader to have opened with the statement that you ARE an advocate for going forward with this project at this time.
Just google “water rates go up” and you’ll find many newspaper accounts of drinking water and sewer/sanitation rate hikes. And yes, conservation measures which reduce use and therefor income for the public or the private utility lead to rate hikes.
Beyond what Elaine writes, here are a few issues that need further investigation and possible action:
1. As far as has been reported, there is no RFP and no evidence of any competitive biding on the project, just rate increases, but what exactly are these based on? In many cases across the country rate increases are for the purpose of making the public utility look to be in good “financial” health and more attractive to the private sector.
Since there has been no public discussion or disclosure about what corporation will build the pipeline and other infrastructure, exactly on what information is the rate increase structure based on?
I assume that a private for-profit corporation (one of the many US subsidiaries of a multi-national water services corporation – they now cal lthemselves environmental services corporations) will be contracted with under a public-private partnership (P3) for the building, management and operation. This means that the private party needs to insure a profit for the corporate investors. The evidence in the US and elsewhere is that P3 partnerships raise rates, the local, often unionized, workforce is not retained, etc. To counter the disastrous privatization trend that swept Latin America in the 1990s and early 2000s, many public water utilities, especially now in Latin America are creating Public-Public Partnerships (PUPs)- one public utility partnering with another to share expertise, keep union workers on the job, keep rates down, service up, etc. PUPs are the trend and the documented way to keep public water utilities in public hands. PUPs yield the same degree of “efficiency” that the private sectors claims to produce, without the need to return profits to global investors.
Action: Davis residents need to file a PRA request to find out what corporations, if any at this point, the Woodland Davis Joint Powers Authority is talking with and exactly what plans ARE being discussed for building, maintenance and operation of the pipeline and related infrastructure.
2. In Akron, Ohio, the Mayor in 2008 tried to privatize, through long-term 90-year lease with a private corporation suspected to be Veolia North America, the public wastewater treatment/sewer system. The city was under an EPA order to correct some major violations in their treatment/sewer system and didn’t have the funds to comply and wanted to sell the public utility (built at public expense) to a private corporation. The Mayor put a pro-privatization measure on the ballot that was defeated. Akron residents put a measure on the ballot that stated: “any action to sell, transfer, or lease any part of any interest in any City-owned utility shall be without force and effect unless and until it is approved by a majority of votes cast by electors of the City of Akron.” And, this measure was victorious!!!!!
Action: Davis residents should discuss and explore the need for such a ballot measure to prevent any privatization (short-term or long-term) of the city’s public drinking water and wastewater treatment/sewer system – including the proposed water pipeline and associated infrastructure. Read: Water Privatization Does Not Yield Cost Savings by Mildred E. Warner, Prof., Dept of City and Regional Planning, Cornell University
3. In Cleveland, Ohio rates are going up as reported by the Plain Dealer newspaper to satisfy the demands of bondholders. The paper reports that the city is required by bondholders to collect net revenue beyond what is needed to make the annual debt payments to maintain a specific debt-to-revenue ratio. According to the city finance director, after two successive years of failing to maintain this ratio, the city is required to notify investors, rating agencies, and the IRS about how they intend to correct the situation.
Action: Davis residents need to investigate if this is one reason that water rates are going up – to satisfy investors’ (bond-holder) needs. Remember bond-holders can be any one from anywhere – that is anywhere in the world. Until this current debt crisis, municipal bonds have always been a sound investment. With cash-strapped municipalities, the threat of not meeting the debt-to-revenue ratio is the Sword of Damocles.
[quote]Elaine… While your article is constructed to present the appearance of a even-handed factual presentation, it would have been “helpful” to the reader to have opened with the statement that you ARE an advocate for going forward with this project at this time.[/quote]
LOL Actually, I have NOT MADE UP MY MIND YET ON THIS PROJECT, so such a statement was neither necessary nor true. I tried to lay out the pros and cons; investigate various claims being made about results in other cities; poke holes in arguments on both sides of the issue; and get people to think long and hard what they want to do from here. The time to protest is fast approaching (Sept. 6), and folks need to make an informed decision as to whether they will support this project or not. I am not advocating one way or the other.
What I think you are really commenting on is that some arguments appear to be more compelling than others. What I see is some very clear concerns that need to be answered by the JPA…
To nprice: You bring up a very interesting and important issue…
[quote]You continue to impress me with your writing and reporting skills! Well done.[/quote]
Many thanks for the compliment! It is greatly appreciated. This was a tough piece to write. dmg has done a good job writing many articles on the subject, keeping citizens informed. I just tried to synthesize the arguments for and against, to help readers figure out what is best to do. This particular issue is so ridiculously complex, yet citizens very much have a say in whether the project moves forward or not under Prop 218 requirements. I would prefer they do so with as much information as possible. I respect both sides of this issue… there are no easy answers here…
Excellent piece, Nancy. This project always “smelled” like a foot in the door for privatization,California-style. My recollection is that the rationale for the size and timing of the rate hike was ,as you suggested, the desire for large revenue numbers to attract bond investors.
Elaine,
Regarding the Tracy and Manteca decisions: The point is that the state is revamping its approach to managing salinity in the Delta. We should simply participate in the process (if nothing else, lower salinity limits would allow us to rely on ground water in years where river water allotments are dramatically cut-back rather than purchasing water at high prices).
The specifics of the Tracy case is not the issue. The issue is the judge made general arguments that the state should take the fiscal impact of cities into account when setting salinity limits. The state is likely to take the courts view into account when reexamining salinity limits in the region.
Woodland’s selenium fines: Woodland’s fines amount to $7.50 a unit per year.
Davis’ selenium readings are much lower than Woodland’s. We would be taking the wells with the high readings off-line.
Davis’ deep aquifer selenium content is fine; there is no problem with it.
Dixon: Dixon had additional problems; their wastewater plant was old and leaking. Davis is building a new wastewater plant, so they wouldn’t have the problem.
And again: the salinity limits are under review. Let’s participate in the process and see where we stand. The process should be completed by around the end of the year.
Vacaville: The Vacaville fine comes to about 50 cents a house a year for this fine.
Elaine, you have simply not made your case that potential fines should the driving factor in determining whether this is the time to for forward with the surface water project.
[quote]Elaine, you have simply not made your case that potential fines should the driving factor in determining whether this is the time to for forward with the surface water project.[/quote]
I haven’t “made [a] … case that potential fines should be the driving factor in determining wether this is the time to go forward with the surface water project”. Potential fines are only one of many, many listed factors to consider; and the cases cited are those that have been brought up in public discussions that I looked up for myself, read carefully, and pulled out the relevant kernel that summed up the circumstances in each situation. It is up to readers to decide for themselves, based on the information presented, including anything they have heard from any source and depending on their own value system and fiscal situation. As I have mentioned above, I have made no decision on this project as of yet. If you feel any particular argument is leaning one way or the other, that is simply because you find one argument more compelling that the other. It is what it is…
[quote]The specifics of the Tracy case is not the issue.[/quote]
Sue, you yourself made the Tracy case an issue. And my reading of the case indicates that the Tracy decision does not stand for the proposition that Tracy does not have to meet the new Clean Water Act Standards. Neither does it stand for the proposition that the SWRCB is “backing off” its new salinity requirements. The only thing the Tracy case stands for is that the SWRCB must take the factor of cost into account when evaluating a city’s water proposal. So the case has been remanded back to the SWRCB with that in mind. It is very possible and I suspect likely the SWRCB will still find Tracy unacceptably incompliant even when cost is factored into the equation.
As to your comments about various cities whose fines have been fairly small to individual rate payers, that ignores what was recently said by the Public Works director from Woodland, to wit:
[quote]the SWRCB is serious about compliance with the new standards and will fine cities who fail to adhere to them in a way to make sure it hurts.[/quote]
In short, the fines are going up…
[b]Wow, E. Roberts Musser [/b]
This detailed analysis is quite the public service… Thanks.
[quote]Wow, E. Roberts Musser
This detailed analysis is quite the public service… Thanks.[/quote]
You are more than welcome!
[quote]Sue, you yourself made the Tracy case an issue.– E. Roberts Musser[/quote]Again Elaine,let me spell it out: The Tracy issue is relevant IN THAT THE JUDGE INVOKED THE GENERAL ARGUMENT THAT THE STATE SHOULD TAKE INTO ACCOUNT THE FINANCIAL IMPACTS OF COMPLYING WITH SALINITY LIMITS WHEN SETTING THEM. Hence, the decision is relevant, even if there are differences between the situation in Tracy and in Davis.
Again, the state is paying a lot of attention to the Tracy decision, and is revising the procedure for dealing with salinity. You say that you have read the Tracy decision, but it doesn’t sound as if you have. The decision explained in detail the Clean Water Act was not a deciding factor.
I am also very puzzled as to why you would give particular weight to an opinion a Woodland public works employee. Remember when our public works department said we needed a $200 million wastewater treatment plant, when we only needed a $100 million plant?
[quote]You say that you have read the Tracy decision, but it doesn’t sound as if you have. [/quote]
I have read it…
[quote]I am also very puzzled as to why you would give particular weight to an opinion a Woodland public works employee. Remember when our public works department said we needed a $200 million wastewater treatment plant, when we only needed a $100 million plant? [/quote]
This is what I wrote:
[quote]There is also an argument the SWRCB is moderating its requirements and may be more flexible in its negotiations. Please reread the aforementioned cases for context and then decide if this contention has any merit. According to Greg Meyer, director of Public Works in Woodland, the SWRCB is serious about compliance with the new standards and will fine cities who fail to adhere to them in a way to make sure it hurts.[/quote]
I merely stated what Mr. Meyer said – it is up to the reader to decide how much credibility to give to Mr. Meyer…
“So the case has been remanded back to the SWRCB with that in mind. It is very possible and I suspect likely the SWRCB will still find Tracy unacceptably incompliant even when cost is factored into the equation.”
This issue will result in Tracy having to demonstrate a good-faith effort to improve the situation while the requirement to meet the Clean Water Act salinity requirements is tweaked and the mandatory required put off to a future date. This kind of resolution is usually the way that intractable issues with no politicly acceptable immediate solutions are dealt with.