City Attorney Believes Initiative Cap on Future Utility Fee Increase “Not Legally Valid”

water-rate-iconThe Vanguard reported on Monday that many see the water initiative as currently worded to be problematic at best.

There are two key provisions to this initiative.

The first is repealing the rate hikes passed on September 7 by the Davis City Council: “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.”

The first part is basically a re-wording of the referendum that has been debated for the past month.

The second part is even more controversial: “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’).”

The Vanguard checked in with City Attorney Harriet Steiner.  Ms. Steiner does not have a definitive answer on the question.  She informed the Vanguard, “We are in the process of looking at the legality of Mr. Head’s initiative.”Harriet_Steiner

However, she added, “Generally, most lawyers conversant on Proposition 218 issues believe that an initiative that caps future utility fee increases is not valid.”

“Therefore, it is likely that the CPI limitation is not legally valid,” she concluded.

She also clarified her role in preparing the initiative.

She said that she did not write the initiative, she wrote the title and summary, as she is required to do under California law.

“Please note that the title and summary is just that – a summary,” Ms. Steiner told the Vanguard. “It contains no opinion and does not imply in any way that the initiative is legally valid.”

In addition to that portion of the problem, it is not clear what the link between CPI and water rates would even be.

If water rates were based on labor costs, as other forms of government are, then you might have a legitimate justification for such a linkage.

The problem is that water rates, unlike most other areas of government, are largely linked to capital costs.  That means in the ordinary course of maintaining even the existing system, rates may have to be increased even if the economy is going down.

So, what the initiative would do, in effect, is force the council to take it to a vote any time that there is a major repair job or capital upgrade to existing services needed.

In fact, it is not even clear how the city would be able to pay its water fines under such a scheme.

The better approach here would have been the simpler approach.  If the concern is that the council is passing rate hikes that are too onerous and putting forth water projects that we do not need, then there a remedy available that does not tie the council’s hands in such a draconian way.

The remedy is simple and it actually fixes the problem with the Prop 218 approach: require a direct vote by the people in order to undertake major capital projects.  You can define what those projects are, but this is essentially a Measure J scenario for water.

Will the public support that?  Hard to know.  But at the very least it codifies the sense that a lot of people who actually signed the referendum had – namely, they believed that the people who got to vote on Target, for crying out loud, should get to vote on the water project.

—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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10 Comments

  1. E Roberts Musser

    [quote]The remedy is simple and it actually fixes the problem with the Prop 218 approach: require a direct vote by the people in order to undertake major capital projects. You can define what those projects are, but this is essentially a Measure J scenario for water.[/quote]

    What is a “major capital project”? Drilling more wells if the surface water project is voted down? The remedy you suggest is fraught with much the same problem as the initiative’s, because “major capital project” is not well defined…

  2. davisite2

    This initiative has its origins in a very serious lack of trust in our Council Majority and staff on this issue, both in the past under Saylor’s “leadership” and now continuing with the least politically damaging explanation for the new Council Majority being the tsunami-like project momentum that they faced as new members of the Council.

  3. Ryan Kelly

    Protesting a steep rise in water rates is one thing. Equating that to a “serious lack of trust in our “Council Majority” is another. This is just a narrow-minded viewpoint from someone who wants to stop all peripheral growth in Davis. The majority of Davis citizens voted for the members of the current City Council and I would say that the majority of Davis citizens feel that they are much better than Councils of the past. They have faced head on the looming problem of our water system and have made the best decision they believe that they can, under the circumstances. Previous councils punted this and, I know this for a fact, did so with making peripheral growth difficult in mind. Now we are in a pickle and you decry the City Council’s efforts to resolve the problem that they have been handed.

  4. Matt Williams

    davisite (and anyone else that wants to jump in), I think the best way to address that tsunami-like momentum is to (as a community) step back and relook at our water/wastewater conundrum from the very beginning.

    One way to do that is to put out of our minds any preconceived specific “solutions” and see if we agree on 1) the conundrum we face, and 2) the high level goals/objectives that we are going to judge any possible solution against.

    [b][u]For the purposes of discussion[/u], here’s a first-pass draft. Please jump in with reactions, thoughts, comments, suggestions, additions, etc.[/b]

    [i]The City of Davis Water/Wastewater system is facing challenges in meeting the present and future water quality and water supply needs of its customers. In this first draft of a community discussion, we believe those challenges are:

    1) Providing a reliable water supply to meet existing and forecasted future needs.

    2) Improving the quality of water dispensed from the “inside” water fixtures inside each customer location, including, but not limited to drinking water.

    3) Improve the quality of treated wastewater effluent discharged by the City of Davis Wastewater Treatment Plant to meet the current and anticipated future requirements of any and all discharge regulations and/or operating permits, including, but not limited to requirements associated with public health and environmental responsibility.

    4) Address the above three issues with a maximum of fiscal responsibility.[/i]

  5. Matt Williams

    While we are talking about the above draft of the conundrum, here’s a possible “background statement” that could serve as a companion/supplement to the above. What thoughts does anyone have about this draft?

    [i]Initially, the City of Davis was able to meet its drinking water needs from relatively shallow wells, but a variety of water quality concerns resulted in the need for deeper wells. From the 1950s through the 1980s, water needs were met by tapping into the intermediate portion of the groundwater basin. For the past 20 years, water supply challenges — the aging of existing wells, and the tightening of State (SWRCB and RWRCB) and Federal (EPA) water quality requirements — have continued to require new well construction, with new wells going even deeper into the groundwater basin, some up to 2,000 feet below ground. Since 1987, the City of Davis has had to retire eight intermediate wells, and several more will need to be taken out of service in the next few years.

    Further, the long-term withdrawal of groundwater has resulted in significant ground subsidence (sinking of the surrounding land) such that damage to some well casings has occurred and several of the well pumps can no longer be pulled to the surface for repair or replacement.[/i]

  6. Rifkin

    David, I am confused by how the story you are reporting today squares with your report a few days ago that Harriet Steiner “prepared” Mr. Head’s and Judge Stevens’s initiative: [quote] “The Vanguard checked in with City Attorney Harriet Steiner. Ms. Steiner does not have a definitive answer on the question. She informed the Vanguard, ‘We are in the process of looking at the legality of Mr. Head’s initiative.’ However, she added, ‘Generally, most lawyers conversant on Proposition 218 issues believe that an initiative that caps future utility fee increases is not valid.'” [/quote] I can understand this report. But what did you mean when you said she had “prepared” the initiative a few days ago? I assumed you meant that it met the legal standards. But now that assumption makes no sense.

  7. jimt

    Yeah, I wish Santa Claus and his elves could help us out with our Davis water supply.
    Otherwise, I don’t see any way around more expensive water–either more deep wells or the surface water project, maybe a bit of both.
    From what I understand about the initiative, it does strike me as unrealistic and possibly irresponsible.

  8. Mr.Toad

    In a confirmation of the arbitrary censorship that Dr Wu describes my post confirming his remarks was taken down for no reason other than they were critical of the censor’s failings.

  9. David M. Greenwald

    “David, I am confused by how the story you are reporting today squares with your report a few days ago that Harriet Steiner “prepared” Mr. Head’s and Judge Stevens’s initiative”

    I was clarifying what it meant to “prepare”

  10. Ryan Kelly

    Hey – the deadline to file financial disclosures for the initiative and the referendum was 10/31. Did anyone get copies who could let us know who financed these ventures?

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