Davis residents Ernie Head and Jim Stevens have drafted an initiative that they will circulate to Davis voters. Unlike the referendum, which will be a simple up or down vote on the council approved rate hikes, the initiative, if it gains enough signatures to qualify and wins, would actually update existing laws regarding water rate hikes.
The initiative has nearly six months to qualify for the ballot, in 180 days, and it only requires 1136 valid signatures to qualify, as opposed to the much higher number for the referendum.
The initiative, which has been prepared by City Attorney Harriet Steiner, does a number of things.
First, “This initiative, if passed by a majority of the voters voting on the measure, would repeal the water rate increases adopted by the City Council in September 2011 that increase water rates over the next five years to provide funding for water system capital improvements, including the surface water project, and other water system costs.”
Second, “The initiative would reduce current water rates and limit future water rate increases to an annual amount not to exceed the increase in the consumer price index (“CPI”).”
If the initiative passed, the base rate would be reduced to the rates in effect in August 2010. The initiative measure would reduce the base rate for single family homes, effective December 2011, of $14.50 to a base rate of $11.50.
Furthermore, the metered rate would also change in two ways.
“The City’s metered rate includes two tiers for each type of user. The price per ccf is less in Tier 1 than in Tier 2. Under the City’s rates proposed to go into effect on January 1, 2012, Tier 1 (the lower use tier) for single family homes ranges from 0 to 27 ccf. The proposed initiative increases Tier 1 to 36 ccf for single family homes and would enact similar changes for other user types.”
Furthermore, “The initiative would also reduce the metered rate by volume (ccf) to the levels in effect in September 2010. For example, a single family home would pay $1.50 per ccf in Tier 1 instead of $1.90 (the rate scheduled to go into effect on January 1, 2012).”
The initiative also repeals the annual rate increases adopted by the City Council and caps the amount of any water rate increase to the change in the CPI from the preceding year.
According to the initiative, this rate increase cap to the change in the CPI would apply to all future water rate increases. The rate cap applies to increases for all water system costs, including capital infrastructure, debt service, and operations and maintenance costs. The initiative also provides that any changes or increases to water rates be “across the board” and equally or proportionally apply to all rate types.
Ernie Head told the Enterprise this week, “I’m for having elections, regular old-fashioned elections. Secret ballot. That’s the main thing.”
“We sat down and decided that the rates should be the same as they were before the City Council ordinance was passed back in September,” Mr. Head said.
While neither the initiative nor the referendum would prevent the city from doing the water supply program outright, it would make it much more difficult to get the funding together.
As City Attorney Harriet Steiner told the Enterprise, “The city does a study that looks at all its water-related costs, both capital and operations, and what the costs are anticipated to be for the upcoming year.”
She added, “The city also looks at the amount of water use anticipated for the next year and into the future, and then the city determines, and the council approves, a rate that will cover that cost.”
The Vanguard has suggested a phase-in of rates over a longer period of time, building in savings. The Vanguard believes that previous councils erred by not ramping up spending over the last decade, as was done for the new wastewater treatment plant.
The Vanguard takes no formal position on the initiative. We would need more time to evaluate the impact of these changes on the future ability of future councils to generate the revenue needed for capital projects.
The Vanguard took the position that the all voters, rather than simply homeowners, deserved the right to vote up or down on the water rate hikes, and therefore came out in support of putting the referendum on the ballot.
The Prop 218 process, as we argued, was insufficient in a community where 55% of residents were not property owners and thus could not participate in the rate protest. While it is true that renters do not directly pay for water and sewer rates, we believe that enough people are indirectly impacted through higher rents and potentially higher costs to purchase goods and services that everyone should participate.
The initiative is another matter, and the Vanguard does not take a position at this time, until it learns more, as to whether to support putting the initiative on the ballot.
According to the Enterprise, “Future rate increases would be tied to the Consumer Price Index, Head said, prohibiting any increase higher than the CPI hike in the previous year.”
“[The council would] be allowed to raise the fees some amount if it became necessary that they needed a little more money,” Mr. Head explained.
“But I can’t even count how many years it’s been since I’ve seen an increase in my salary, and I know that applies to a lot of other people, and the normal cost of living has gone up about 3 percent every year.”
—David M. Greenwald reporting