The Consumption Based Fixed Rate system has been attacked mercilessly in the last few weeks, by voters who are uncertain as to what it means and how it is derived, and by columnists who have concocted, at times, wild scenarios to show how on the margins it might be unfair.
Last week Bob Dunning used it to show how much more people will be paying for summer water than they will for winter water.
Just yesterday, Michael Harrington, leading the opposition to the water project, argued that we return to the Bartle Wells rates.
He writes, “Yes, please, go back to BWA and show the voters how the City can be trusted to get it right.”
It is a strange argument and demonstrates why opponents of projects are probably not the best advisers on how to fix problems. For if the city were to suddenly change up their rate structure, you can with no doubt bet that Michael Harrington will be leading the way to show how they bent in the face of pressure.
Lost in this debate, however, is the fact that the Loge-Williams CBFR water rate system actually attempts to remedy a problem. The problem is that currently $10 million are generated by water rates, and of that, $2.9 million of it was essentially a subsidy by low-end users – seniors, low-income people and even conservationists- to high-end water users in this community.
There are, in fact, fixed costs to the system – costs that would exist even if magically no one drew any water at all. In December the city’s bond consultant, Mark Northcross, explained that the city would not be able to get bonding for a project without a showing that they could produce a certain amount of venue even with no water usage. In other words, financiers would frown and effectively disallow a system that is based only on variable usage.
Under a traditional rate structure, where the fixed rate is approximated strictly by meter size, the people who end up with the unfairness are the low-end users. Under the Bartle Wells Fixed Rate with an inclining block rate proposal – the more fair of the two – a user who only uses 5 ccf per month would have had to pay $60 by 2018 – for using almost no water.
In fact, the chart shows that up to about 70% of the ratepayers are advantaged by CBFR over Bartle Wells.
No wonder Michael Harrington wants this change so much, as he can show the voters that not only did the city cave, but that most of them will be worse off – some far worse off having the Bartle Wells system.
This chart is really the most telling of the charts. It shows the extent to which under the current rate structure, the low-end users are subsidizing the high-end users. Low-end users under the current rate system are paying $3.80 per ccf. At the midrange that number drops to $2.46 and by the top 75% of users at 18 ccf, the number plummets to just over $2 per ccf, nearly half the cost that the bottom end pays.
The system becomes even worse under Bartle Wells, where at the low end you are looking at $5.50 per ccf compared to $2 at the highest usage. And in five years, that number flies to $12 per ccf compared to just under $5 at the top.
Is this really the system that Michael Harrington is offering as fair?
CBFR still favors the top-end users, but the number flattens considerably. In year one, the low-end users – almost half of them – actually pay less than they do now. Unfortunately, in years one and two, council made the political compromise of adopting Bartle Wells. Most people, except at the top 25% of water users, are disadvantaged by the political compromise.
In five years, the rates go up, as they will under any scenario, but they only go up to $8 per ccf at the bottom (compare that to the Bartle Wells figure of $12/per ccf). And the top-end users are at $5.82 per ccf – still a lower per unit rate than at the bottom but instead of nearly a 3 to 1 advantage, they have about a 25% advantage.
Michael Harrington and Bob Dunning seem to want to argue that this is a fairness issue. The fact of the matter is that the most fair way to go about this is by going to CBFR.
If the top-end users are disadvantaged under this system it is only because this system moves the rate structure closer to an equitable split.
What I want to know is how do Michael Harrington and Bob Dunning justify keeping the current inequities in place?
—David M. Greenwald reporting
The current rate system is deficient So is the two year BWA
I was pulling their leg yesterday
David, did you ask Michael if he was being sarcastic with his sarcastic comment before you spent time calling him out? As you’ve observed, a lot of this election revolves around trust. Spreading distrust and confusion apparently trumps education as a tactic in this election. Political genius, you’ve said before. Another “No” coup!
So, why don’t we each pay our share of the cost of the system plus a per gallon (or per ccf) charge? No tiers. No rates based on past usage.
The way I see it is that those of us with vegetable gardens are being priced out of our gardens.
Keithvb
I think that you totally have it right with your statement ” the way I see it….”
I encourage your gardening efforts. I see this is a wonderful way to spend time, grow food and generally live a healthier life. I highly recommend it, and…..
Another perspective might be, is it “fair” to expect a now disabled senior ( perhaps even a past gardner) on a fixed income to continue to subsidize your irrigation needs, or should we all be expected to contribute, knowing that no system is perfect, as close as we can come to our own usage needs ?
medwoman
Perhaps you can explain to me what is unfair about paying for the water we use.
When I go to the market I buy apples by the pound. If my family eats more apples than yours I simply buy more apples. The cost of the apples plus costs of the store, delivery, etc are all included.
keithvb – Your response is similar to many I have heard. I agree with you. CBFR is absolutely not fair in this respect.
The Vanguard’s analysis of fairness is incomplete and biased here. First, it fails to address the point you are making. I detect a level of economic classism in the focus of this piece. It is a strange one too because water use and household income do not correlate. Who pays for all that water used at Village Homes for all their grassy common areas and the large garden area? Are those people wealthy water wasters?
Second, it fails to incorporate the added benefits derived by the surface water project. If low income residents are most hurt by rate increases then they also most gain from the benefits (as a percentage of their discretionary income). No more bottled water. No more water softeners and expensive salt pellets. No more expensive plumbing repairs and appliance replacements. No more expensive harsh cleaning chemicals. Less soap is required. The environment is protected.
Keithvb
Yes, and the full, hidden costs of delivery are not covered. For example the costs of the roadway maintenance,
regulations and enforcement for transport of goods, inspectors, and any number of other components of our extremely complicated delivery system are not covered. It is much more complicated than a simple I will pay for each gallon of water I use.
Frankly
[quote]Who pays for all that water used at Village Homes for all their grassy common areas and the large garden area? Are those people wealthy water wasters?[/quote]
As a frequent former visitor to Village Homes, I agree that these people should not be considered “wealthy water wasters”. However, just because they are not wealthy does not mean that they could not identify areas of more responsible water usage. For example, as a group they might choose to decide that they value their gardens over the grassy areas and they might choose to convert at least some of the grassy common areas to areas landscaped with less thirsty plantings. I think perhaps you are seeing “classism” where it does not exist. One does not have to be wealthy to reconsider whether one is optimally using what is likely to become and increasingly expensive commodity. Just because we have enjoyed relatively inexpensive water for a long, long time, does not mean that we should not address this usage responsibly regardless of our income.
medwoman
It’s obvious to me that we need a complicated, difficult to understand system of paying for our water. That way we will all be hoodwinked together.
Non-transparent, complex systems pushed by government are designed to hide the truth. This is just another example.
CBFR is just the tip of the iceberg. The entire water project is a collection of hidden or undisclosed or unexplained pieces.
One of the reasons the rate system is all screwed up is the City was falsely implying, if not reporting, throughout the WAC process that city water usage was part of the income calculations to the water fund, when we now know that the City has been — basically — stealing our rate money to subsidize city water usage.
I have heard that the city water should have cost about $550,000 per year, and now the city admitted it’s about $775,000 per year. However, the city also admitted that it has not yet installed meters on some “larger” sites (parks, greenbelts), so I think the $775,000 is way way too low.
The lawsuit includes legal causes of action challenging the current, proposed BWA, and proposed CBFR systems. City staff have already admitted, on tape, at the WAC that the current system violates Prop 218.
The evidence in front of the WAC and the CC clearly shows that the current and the BWA two year structure violate Prop 218.
The CBFR, as currently written, clearly violated Prop 218. Have any doubts? Read Dunning’s columns on the vast differences between each half year usage.
Also, the look-back feature of the CBFR, where your current bills are set by water usage conduct on the same parcel up to 22 months ago, in my mind violates Prop 218, if not some sort of due process. What if I did not live in that house two years ago, or last year? Why am I stuck with their usage? We haven’t directly put a cause of action in the complaint on this public entity rip-off of the current house dweller due to conduct by past dwellers, but I think it has merit.
The CBFR proponents like to talk about the city setting up a complaint process, so you can have your bill adjusted to be based upon current residents and conduct, but to me that seems like a rate structure that basically steals money from our wallets, and we have to go down to the police station and complain, then get an adjustment at the counter. It’s not right or fair.
In any event, I am looking forward to the Yolo County Superior Court helping all parties sort this out so we have a sound, lawful, and fair rate system for the current well supply system, and whatever additional project might be approved by the voters.
Keithvb,
You say above it would be more fair to simply pay by the gallon because all the rate systems above charge more total if you use more water. But the point of the article is that in all the rating systems above, the more water you use the less you pay per gallon. It’s the low water users who should be complaining. It is the low water users who do not pay as much more per gallon under CBFR, but even under CBFR they still pay more per gallon.
As for a garden, mulch, mulch, mulch will lower your water usage tremendously.
Frankly,
I do not use water softeners, harsh chemicals, a lot of soap or need new plumbing fixtures. I do buy drinking water for some uses. I am not suffering. Under CBFR I would “suffer” from even more fair water rates.
Mike Harrington:[i] “[b]The lawsuit[/b] includes legal causes of action challenging the current, proposed BWA, and proposed CBFR systems. City staff have already admitted, on tape, at the WAC that the current system violates Prop 218.”[/i]
Have you served the city yet?
We had between 7-10 volunteers staffing our No on I booth on Saturday at the Farmers Market, and all of them were busy with voters stopping by for information. Many grabbed signs.
Sue’s hat was fabulous, as usual.
The tide is turning, and it is not exactly headed towards Woodland.
Have you served the city yet?
One more thing before I go back to work. I have heard rumors that the Yes on I Committee is seriously looking into seeing if they can charge Dunning with providing “in kind services” to No on I for his publishing columns that criticize the rate structures.
“Yes, please, go ahead and formally make those allegations.”
Don: no, the Complaint is not yet served. “Strategic reasons.”
[quote]The CBFR, as currently written, clearly violated Prop 218. Have any doubts? Read Dunning’s columns on the vast differences between each half year usage. [/quote]
Now this is interesting. On an earlier thread, a poster had cited Dunning’s down to earth nature and use of humor. I do not dispute either of these opinions. Dunning is a gifted humorist and should be recognized as such. What he is not is an expert on aquifers, conjunctive use, water quality, environmental regulations, or utility rates. And yet what we have here is Michael Harrington urging that those in doubt use Dunning’s column as their source of information. A very apt illustration of a previously made point about favoring the views of a humorist whose opinions are aligned with one’s own over a variety of experts, members of the WAC, city council members and others who have spent a great deal of time researching and analyzing all aspects of this project. To me this is a classic case of “don’t confuse me with the facts”. After all snarky, amusing, if baseless comments are much easier and more fun to read than is dry evidence and data.
[quote]Don: no, the Complaint is not yet served. “Strategic reasons.” [/quote]
Was this ever in doubt ?
If you have not served the lawsuit to the City, please stop talking to the media and posting on blogs about your lawsuit in the context of your campaign. Just filing a lawsuit does’t count. It just adds to your ugly, reprehensible campaign behavior, Mike. Doesn’t the news about Parrish’s campaign give you any pause?
I know that the campaign is feeding your narcism and you are having a good time with this. I know that this is filling a hole left when you lost your election for City Council, when you were discovered taking campaign contributions from Guidaro and other developers. I do believe that you have no real intention running for office, despite hints that you are dropping around town. Your behavior in public life alone precludes this, without any scrutiny of your personal irresponsibility.
Unlike others here, I do not think that you care one iota about this community. You love the chase, but the day to day aspects of taking care of the community put you to sleep or your attention wanders and you seek another stage where you can be the center of attention, the most important person in the room.
Ryan: sorry you are so angry. Guess I am doing something effective to stop the water project rip off of our little community.
If you want to know why the suit is not served, go talk to a civil litigator and he or she will tell you.
Maybe an attorney here can help me out. If a complaint, or whatever it is called, has been filed with the court, but not served on the other party, is there actually a lawsuit? Has there been a process of setting a court date? Is any part of the actual court proceeding underway?
Someone said: Who pays for all that water used at Village Homes for all their grassy common areas and the large garden area? Are those people wealthy water wasters?
Having lived in Village Homes for almost ten years, I can say that the monthly homeowner’s association fee pays for water for the common areas (the greens, the landscaping, and the ag strips) as well as the upkeep of the orchards, the pool and community building, as well as other costs associated with the development. Village Homes owners also agree to the upkeep of their common areas in lieu of additional fees tacked on to the homeowners. Fees have risen in recent years to cover costs such as replacing the fence along Arlington, replacement of a tractor (if I remember correctly) and other “fixed costs” – sort of the same as paying for fixed costs of infrastructure improvements like water and wastewater plants.
[quote]“go talk to a civil litigator and he or she will tell you.”
“You’re here. You could tell us.”[/quote]The true “strategic reasons” are apparent to non-litigator observers. Rate-setting charges and counter charges have pretty well taken center stage in campaign strategy after Michael filed his politically genius law suit.
David’s longtime battle about the early-year rate steepness had about exhausted itself and arguments about the project itself were getting resolved for most of us.
Then the lawsuit rejuvenated the weak “No” side. What better way sow distrust about our elected leaders? What better way to kill a project than to charge official malfeasance on a somewhat related matter?
The suit already has done its primary job. David reads the landscape as having gone from the poll’s 89-11 to 45-55. Michael’s lawsuit is going nowhere if he’s correct that the “No” side has overwhelming support now.
Justsaying”
“the poll’s 89-11”
I seriously doubt those poll numbers were ever a true indication of reality. I actually took the poll and felt it was set up in a way to lead the person being polled to say that they were voting yes on Measure I.
JS: “[i]David reads the landscape as having gone from the poll’s 89-11 to 45-55.[/i]”
You have a professionally performed poll, which undoubtedly had some bias that may or may not have been controlled in the design, and you have David’s finger in the wind. Now I’m certain that David chose a very nice finger to use, but is anyone surprised by the results of his ‘poll’ considering his commentary over the past two years?
It is not the non-filing of the lawsuit that is ticking me off here. It is Mike talking about the lawsuit here and in other media as though a lawsuit exists, though he hasn’t had it served yet. He is using this as part of his campaign against Measure I – that a lawsuit has been filed. This has nothing to do with litigation strategy. It has everything to do with campaign strategy. And it stinks.
[quote]Ryan: sorry you are so angry. Guess I am doing something effective to stop the water project rip off of our little community.
[/quote]
I find it a little sick that Mike measures the anger he incites as a measurement for his success.
Excuse me… non-serving of the lawsuit…not non-filing.
keithvb
A brief disclaimer. I hate dealing with numbers. I find them difficult to understand and manipulate. I avoid looking at graphs, charts or any calculation more involved than deciding how much to tip. Having said that please explain to me how the relative rates as shown in the chart that David has posted multiple times comparing current, future Bartle Wells and future CBFR comparative rates are in any way confusing.
For those of you who actually like playing around with numbers, have you actually read Matt Williams explanations ?
Ryan and Mark: The city is certainly worried about the suit, as they should be. They have done a press release.
They even paid the same attorney who set up and blessed the rates for the January 15 CC meeting and adoption, to write the stellar post-litigation opinion that ….. her original opinion was spot on! I love this town.
How much did she charge to defend her own work product? Reminds me of Steiner, and her charging us for years in the DACHA litigation to defend her own work product.
The Davis Enterprise certainly thinks the suit is newsworthy: they did a full article last Friday, big headlines, above the fold. That paper knows to cover important community events, and the litigation is certainly one that they are going to closely follow.
Like I said, whether Measure I wins at the polls, or not, the City should adopt constitutionally valid water rates, and the legal case is geared to do just that. We are helping all of YOU ratepayers to ensure your water bills are lawful and fair.
I see two obvious purposes for the lawsuit. The first, and the one we see playing out now, is to boost Michael H’s ego (and as a side benefit, the flagging ‘no on everything’ campaign). I think this aspect has been an unqualified success as Michael’s ego (even to his standards) has expanded by an enormous extent. For this purpose, serving the lawsuit is counterproductive as it would require Michael to actually do some work.
The second purpose of the suit, and the reason it was filed as a ‘class-action,’ is to extort the largest settlement possible from the City. Regardless of Michael’s comments to the contrary, there is no expectation that this suit will ever be in front of a judge. This is designed to be settled, thereby maximizing the amount of money transferred from the taxpayers to Michael’s (and his friends’) pocket, while minimizing the amount of work required. Whether or not the City is ever served with the suit I think depends on the outcome of the vote. If Measure I passes, especially if it does so handily, then I expect this suit to end up in the dustbin as there is little reason to believe that the City would agree to a settlement.
keithvb wrote:
> When I go to the market I buy apples by the pound.
> If my family eats more apples than yours I simply
> buy more apples. The cost of the apples plus costs
> of the store, delivery, etc are all included.
Then Michael wrote:
> the city also admitted that it has not yet installed
> meters on some “larger” sites (parks, greenbelts),
> so I think the $775,000 is way way too low.
If the city ran the store and gave free apples to city employees the store would need a super complex cost structure for apples so people would not realize that they are paying for other peoples apples…
[quote]If the city ran the store and gave free apples to city employees the store would need a super complex cost structure for apples so people would not realize that they are paying for other peoples apples…[/quote]
If Michael ran the store, he would claim that the citizens apples were being stolen by the city despite no evidence presented, and if the city did decide to settle to save the taxpayers apples, Michael would pocket the apples obtained from the citizens….
oops…. the city, and claim he had done it all for the citizens.
Michael, once again, please, please do whatever it is you feel you must do, but don’t claim that any of it is being done on my behalf.
Medwoman: “no evidence to the contrary” ?? The City already admitted to what they have been doing for years. I had the city documents in my hands before I added that cause of action.
If any of you actually would care to see the Complaint, please email me at avialaw@mikeharringtonlaw.com, and we will send you a pdf of it.
Medwoman: if you are a ratepayer, you are going to be assisted by this case.
Just as you where by my referendum in the Fall 2011. The City saved over $135 million in project costs and financing.
I’m not wasting my time with the legal case.
Mark: “extort the largest settlement possible”?? If there is a settlement or award, the lump sum goes into a pool where ratepayers who were defrauded by the city can claim a share. Since it’s a class, all members benefit, including you if you are a ratepayer.
Mark or any of you readers are all welcome to stop by and discuss the suit at any time. There are no secrets here.
I am working for the class, and the Court must approve any settlement and certify that the settlement is in the best interests of the Class. Meaning: the ratepayers.
The ratepayers were not represented in the political decision on the rates. My comments and concerns were completely ignored or dissed.
You can try to argue the political and business elites represent “ratepayers,” but they really dont represent the bulk of the ratepayers in town, who are the average resident who are low to moderate income. The CC members are all working professionals with advanced degrees and fancy letters after their names.
That’s why Nancy Price and others formed the Yolo Ratepayers for Affordable Public Utility Services. It gives ratepayers a seat at the table.
It certainly will give them a seat at the table in Court when this rate mess is straightened out, as I am confident it will be.
Without the rate case, all of your water account rights would continue to be violated, as they have for many years.
Mark, Ryan, Medwoman and friends: I have an open door here; stop by and let’s read the Complaint together. It’s not difficult.
But Mark, Ryan and Medwoman: I have invited all of you to call, email or stop by, and you have not. BTW, other DV readers have stopped by and discussed issues, and seemed to go away satisfied.
Don’t expect me to believe that you and your aviation attorney friend from Southern California are doing this pro bono, including expenses. If you are actually serious about the lawsuit, I’m sure you are looking forward to your standard 30% plus expenses. I’m counting on the Court to protect us from you. I would support the City never settling on this and allow it to drag through the Court. I would be willing to submit to the Court that I suffered no harm and I bet I could find many others that would do the same.
Don’t expect me to understand why you would file a class action suit “on my behalf” which is designed to fatten your wallet. I’ve read the complaint that was posted on this blog. It is hogwash.
As a lower income ratepayer, I do better with the CFRP than I do with the BW rate plan that you are calling for. No thanks, Mike. I know that it is really hard for you, but don’t pretend that you are doing anything on my behalf. You aren’t.
“If there is a settlement or award, the lump sum goes into a pool where ratepayers who were defrauded by the city can claim a share. Since it’s a class, all members benefit, including you if you are a ratepayer.”
I’ve never run into a class action settlement/judgment that didn’t reward the attorneys far more handsomely than the class members. I just received Farmers Insurance settlement check for $8.76. The attorneys got millions.
The city already has explained how it’s changing in order to meet the requirements set by the court finding. This suit breaks no ground that wasn’t established by the earlier finding. If it proceeds, it will cost us money. But, one has to guess that the real timing planned for this case to see a courtroom is: never.
keithvb said . . .
[i]”It’s obvious to me that we need a complicated, difficult to understand system of paying for our water. That way we will all be hoodwinked together.
Non-transparent, complex systems pushed by government are designed to hide the truth. This is just another example.”[/i]
Actually keith, the current two-part tariff is where there is a total lack of transparency. When a new well is added to the system or a new above ground storage tank is added, how do you personally know what that system addition is costing you personally? [u]You can’t[/u].
With a three-part tariff like CBFR you will know exactly what those supply infrastructure additions are costing you. It will be there right on your bill in the Supply Charge. [u]That is transparency[/u].
if you want to know just how much cost the water system would avoid if you didn’t use any water, it is right there on your bill because the incremental costs the water system incurs because of your usage are exactly equal to what you are being charged in the CBFR Variable Use Charge. [u]That is transparency.[/u]
You can not do any of those very transparent things in the current rate structure. All the costs are comingled. CBFR very simply fixes that and gives you control over your Variable Use Charges and your Supply Charges. If you reduce your usage in any month, your Variable Use Charge in the next bill will be lower. If you reduce your usage in May, June, July, August or September your Supply Charge in [u]all 12 months[/u] of the next year’s bills will be lower. That is very simple [u]control of your own water bill[/u].
—————-
You want complicated? Try explaining why your current water bill is equal to the amount it is? You are paying $1.50 per ccf right now in Tier 1 and $1.90 in Tier 2. How do you know whether those charges are fair? Why do you want to perpetuate a non-transparent billing rate structure that you can neither understand nor explain?
MH: “[i]If there is a settlement or award, the lump sum goes into a pool where ratepayers who were defrauded by the city can claim a share.[/i]”
Nope. The largest portion of the settlement (50-60%) will go to the attorney (your pocket) and the named plaintiffs (your friend’s pocket). Any other funds may well be distributed to the ratepayers, but any monies they will receive will be less than the costs that they will pay out as taxpayers. As I said before, this is simply a way to take money from the taxpayers and put it into your pocket.
“[i]Mark or any of you readers are all welcome to stop by and discuss the suit at any time.[/i]”
I won’t waste my time talking with someone who is suing me.
“[i]Since it’s a class, all members benefit, including you if you are a ratepayer.[/i]”
Nope. Even though I am a ratepayer, I will receive no benefit from your action. You are suing me (taxpayer) to take my money and put it in your pocket, and even if I receive some share as a ratepayer, I will still end up with a net negative result. This is all about making money for you and your friends (oh yeah, and stroking your over-sized ego).
As I understand it Michael it is contrary to the Bar’s ethical standards for the plaintiff’s attorney to speak with anyone involved in the case except for the opposing council. Is that why you haven’t served the City yet, because you would have to shut up?
MIchael
I will continue to be very direct about my intent.
You have graciously invited me to communicate with you in private about concerns I have about your actions.
I have expressed to you that since this is a public issue, I believe that all communications including my questions, your responses, and any points of agreement or disagreement should be communicated in an open forum.
I also would appreciate it very much, if since I do not agree with your actions or tactics, you would stop falsely portraying that you are representing my interests in any way whatsoever. I do not need or want your help.
As a matter of fact, what would be most helpful to me is if you were to stop the attack ads, stop making claims of fraudulent actions, stop accusing city officials for errors areas in which you know they are already acting to rectify past mistakes, and address the questions that have been put to you many times. I’ll simplify and ask again.
I) If you feel that this project is too expensive, how much money do you feel the city should pay for a permanent surface water source? Please explain breakdown of costs.
2) If you feel that surface water is not needed, please site sources for how much it will cost over time to maintain a viable well system ?
3) How will you propose funding fines for environmental breeches and deleterious effects in the future ?
Its not difficult to throw stones, it is far more difficult to come up with viable alternative solutions. I eagerly await yours.
Thank you, medwoman. , for explaining why Michael’s approach has been so frustrating and offensive for the last couple months. I swore off letting his sniping and flip non-responses get me worked up any more. You save all of us the effort. I can’t decide whether this whole business is a joke to him or he just sees an opportunity to even up some old scores.
Michael is playing you all like a fine violin. It’s interesting to sit back and watch him work.
For keithvb and others frustrated by CBFR –
Your analogy is inappropriate because the city delivers the water to you via system with very expensive fixed costs. If you went to the store to bring home all the water you use in your household, then you can pay exactly the same for every gallon and pay for only the gallons you use. But if you want the water delivered to your doorstep, you have to pay for the cost of delivery system.
This type of system is in place for many things that are delivered to you. For example, if you have gravel or concrete delivered to your property, you pay the same delivery cost for a full load or a quarter of a load. Why – the delivery cost is the same, regardless of the the amount in the truck.
Michael, Sue and the rest of No on I don’t deal in facts …only innuendo and accusing others of trying to mislead. They refuse to answer any questions for which the answer would hurt their cause. Most Davis voters interested in doing the right thing for the community will see through the charade, although there is certainly a group who will simply vote for whatever cost the least amount of money in the short term, regardless of the long term impacts on water costs and housing values.
Rusty49: how dare you say that about moi ?! Please apologize!
Mark and Ryan and Medwoman: why don’t you Google class action rules in California, and read up on how it works? I re-read your fears above, and it’s clear to me that you don’t understand the process.
I am not suing Ford in a class action to recover for the Pinto gas tank defects, for example. I am not going to get 50% of a billion dollars or anything else like that.
Heck, I am not even asking for 40% of the $135 million project costs and financing that I saved all you ratepayers by spending $9,000 to collect signatures in Fall 2011 to qualify the referendum.
I suggested to the Mayor that I get 10% of those savings, and he suggested I am owed some good wine. So for $9,000, I might get a bottle of wine.
(I am still waiting for some wine from the Covell Village partners for playing a substantive role in defeating Measure X in Nov 2005; if X had passed, those guys would have mostly gone bankrupt in 2008 with the infrastructure in, but few homes sold or sellable.)
The Court completely controls the award of attorneys fees, if one is requested. Fees are decided after full briefing, and the reasoned decision by the Court. So, your elected CC reps may have a closed session sometime to decide on the City’s position as to fees issues. I am not concerned about it; the point is to fix the rate system mess.
rusty49: And I do enjoy my work. The Complaint was interesting to research and draft, and filing it feels like pulling an arrow back in the bow and siting the target.
Service of the complaint is a little like launching an arrow at a down-range target that moves around. Attorneys serve the summons and complaint on the target at the right time for the case, under all the facts and circumstances existing at that time.
When I serve it, I will send a copy to the local media.
Money in your own pocket Michael. That is what you are working for. Nothing else.
medwoman & Adam Smith
The table is clear. The reasoning is pure obfuscation.
I don’t mind paying delivery costs,etc. I object to paying rates based on summer use.
Simply charge us for the infrastructure and delivery charges plus a non-tiered per ccf used rate.
Why not?
Here’s a thought… once Mr H filed the lawsuit, I’m assuming it’s a “public record”… so, it seems that I, as a member of the public, why cannot I “serve” the City with the lawsuit?
Am checking into this tomorrow, and ‘goodbye’ to “strategic reasons”…
Those who “use” the laws, are subject to them
Feel ‘hoisted by your own petard’, Mr H?
Rusty, You are right. This is how Mike H. works. This is a huge game for him. I imagine this is all he thinks about right now. Remember, he has never answered a question, or explained himself, or provided an alternate with evidence that it would be better. He lies, and lies, and lies. Now we are hearing that the rates are unfair (but no explanation), the water is polluted (with no scientific evidence), that people are corrupt (with no evidence), and on and on. This is who he is.
Keithvb, there have always been tiers of rates. The challenge is to set the rates so people who use very little aren’t subsidizing the use of people who use a lot. Matt Williams can explain it better than me, but personally I found that I did better with the new system than I did with the existing system.
Thank you Don, Medwoman, and davisite2 for the feedback earlier [Ref] ([url]http://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176665[/url]). I will be brief.
The following is not a question to anyone. It is expressed as a fact to highlight a piece of misinformation.
The choice of billing rate is not logically associated with [b]transparency[/b]. All rate structures can share the same level of transparency if the incremental additions to the costs are listed on the bill. The argument that the choice of billing rate would somehow make the system less transparent is an illogical stereotype.
CBFR is not the fairest rate. It has issues. Compared to Proportional or Tiered rates, CBFR has issues that those rates don’t have. (And proportional and tier rates have issues that CBFR does not have.)
It is possible to fix the issues in CBFR.
But there is no commitment to fix them.
When someone replies to this, it is not because I asked a question, but that they are defending their position, and I will be obligated to reply because it is part of the ethics to remain in the discussion to let someone who has been spoken negative about to defend themselves. When that happens, details will be required. In light of the feedbacks I will redirect all details to links.
A fair billing structure has a built-in mechanism to reimburse the payers. [Ref] ([url]http://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176685[/url])
keithvb said . . .
The table is clear. The reasoning is pure obfuscation.
I don’t mind paying delivery costs,etc. [b]I object to paying rates based on summer use. [/b]
Simply charge us for the infrastructure and delivery charges plus a non-tiered per ccf used rate.
Why not?
Keith, y[u]ou are not paying rates based on summer use[/u]. You are paying rates based on what proportion of the entire system’s summer is yours.
The implication of your comment is that somehow using summer makes your rates astronomically higher. That is a 100% inaccurate misconception that has been put forward by the No On Measure I team. Here is a calculation that will no doubt make your eyes glaze over . . . but it clearly shows how wrong No On Measure I’s “heavier burden” assertion is.
In 2015, the first year of the CBFR rate structure the water system’s annual mortgage payment for the whole system’s supply components (all the wells, the two storage tanks and the 12 mgd of surface water) is $12 million. What proportion of that $12 million is paid for by Single Family Residences if you use the summer peak values to allocate the $12 million?
The answer is $6,768,540. The way you get that is to divide the Single Family Residence peak consumption by the total system peak consumption and then multiply that by the $12 million. (1,723,219 ccf divided by 3,055,110 ccf times $12 million)
If you use annual consumption to calculate your proportions the answer is $6,674,233. The way you get that is to divide the Single Family Residence annual consumption by the total system consumption and then multiply that by the $12 million. (2,530,612 ccf divided by 4,549,938 ccf times $12 million)
The key is that we are always comparing an account’s use to the total system use in any period. The $94,305 difference ($6,768,540 minus $6,674,233) represents a 1.4% increase for the Single Family Residences as a group . . . and I can guarantee you that virtually 100% of that $94,305 comes from homes that are outside the City limits . . . in El Macero and Old Willowbank where they are very heavy irrigators. Residential Homeowners in the City limits pay the same amount regardless of whether summer peak is used or the annual monthly average is used.
Are you a residential homeowner living in the City Limits? If you are, then you are going to have the same proportion of the total system usage regardless of whether a summer proportion is used or an annual annual proportion is used. You are making a mountain out of a molehill.
keith, how would you apportion the system mortgage costs to the individual customers?
The following is a list of issues with CBFR in terms of Fairness and Stability.
[ Water Rates Info List ] ([url]http://skylet.net/docs/2013-02-18-2347-WaterRatesInfoList.htm[/url])
This is a persistent list. I will update it if the issue I claim about CBFR is cleared.
Matt, do you object to any statement listed on that page?
If so, could you provide a reason so that I can update the list?
You may also propose new criteria on evaluating the billing methods.
Edgar, you have some very strange statements in your table. I have updated the table as follows with the updates in [b]bold[/b]
A fair billing method is consistent to its principle, and consistent across different scenarios without loopholes that could be exploited.
CBFR does not follow any coherent principle. [b]CBFR follows the principle of cost creation accountability. If you created the cost you are responsible for the cost.[/b]
CBFR subsidizes winter users. [b] CBFR does not subsidize winter users. Winter users pay the exact same variable rate per ccf as every other users. Since no incremental system capacity is built in Davis to accommodate any winter users, there are no fixed system construction costs associated with winter use, only variable costs.[/b]
Equal Discount follows a coherent principle
Incremental Cost Assignment is an unfair billing method. [b]Why? Is that statement correct just because you state it? If a person charges something on their VISA bill do they expect someone else to pay for it?[/b]
CBFR does not follow Incremental Cost Assignment. [b]Yes it does. If incremental system capacity is created for a customer’s load then they pay the cost. If no incremental system capacity is added then there is no cost to assign.[/b]
A fair billing method for shared equipment does not drive the payers to compete against one another. [b]There is no competition. Where do you se any competition? The principle of cost creation accountability means that if you are personally responsible for the addition of incremental system capacity then you pay for that incremental system capacity. Each customer is responsible for their own actions in terms of adding incremental capacity.[/b]
CBFR pits its payers in competition against one another. [b]How? Is that statement correct just because you state it? Again, if a customer uses their VISA card to add incremental system capacity then they pay. The bill doesn’t go to anyone else. Each customer is responsible for their own actions in terms of adding incremental capacity.[/b]
Equal Discount does not pit its payers in competition against one another.
A fair billing method has a way to reimburse the payers
CBFR has no built-in mechanism to repay payers. [b]The annual Supply Charge adjustment is exactly that kind of mechanism. [/b]
Equal Discount reimburses the payers even after the capital cost is paid off.
A fair billing method would not result in a user who pays $0 for the capital cost. [b]If the capital item is fully depreciated and completely paid for there are no capital costs to pay for. In addition, you are ignoring connection fees, which are separate from the rate structure.[/b]
CBFR allows a user to pay $0 for the capital cost. [b]Only if there is no capital cost that needs to be paid for. Enterprise Fund accounting rules forbid charging customers fees for which there is no matching cost.[/b]
Equal Discount does not result in a user paying $0 for the capital cost
A stable billing method will not cause an increase in capital responsible when some users suddenly decide not to use the equipment.
CBFR results in sudden surge of responsibility when someone decides to stop using the capital. And why is responsibility bad?
Equal Discount will not result in sudden surge of responsibility when someone decides to stop using the capital
A stable billing method will not result in any increase in responsibility if the user maintains the same usage level
CBFR may results in an increase in responsibility even if the user maintains the same usage level. Absolutely correct. In times of decreasing consumption absolutely all billing structures have no choice other than to do that.
CBFR may result in increase in responsibility even if the user REDUCES its usage level Absolutely correct. In times of decreasing consumption absolutely all billing structures have no choice other than to do that.
Equal Discount does not result in an increase in responsibility if the user maintain or reduce its usage level. Absolutely false.
An accountable billing method does not intentionally collect excess from the payers
CBFR does not collect excess from the payers
Equal Discount does not collect excess from the payers
(continued . . . )
A stable billing method will not cause an increase in capital responsible when some users suddenly decide not to use the equipment.
CBFR results in sudden surge of responsibility when someone decides to stop using the capital. [b]And why is responsibility bad? [/b]
Equal Discount will not result in sudden surge of responsibility when someone decides to stop using the capital
A stable billing method will not result in any increase in responsibility if the user maintains the same usage level
CBFR may results in an increase in responsibility even if the user maintains the same usage level. [b]Absolutely correct. In times of decreasing consumption absolutely all billing structures have no choice other than to do that. [/b]
CBFR may result in increase in responsibility even if the user REDUCES its usage level [b]Absolutely correct. In times of decreasing consumption absolutely all billing structures have no choice other than to do that. [/b]
Equal Discount does not result in an increase in responsibility if the user maintain or reduce its usage level. [b]Absolutely false. In times of decreasing consumption absolutely all billing structures have no choice other than to do that. [/b]
Re: Matt
As prompted by medwoman and Don Shor earlier, I will try not to flood the forum. I have logged your reply and I will address them one by one. If you want to prioritize one of them, please specify. My intention is to address each principle one by one first, then look at the details on whether CBFR or Equal Discount follows the principles.
This is the first one:
[quote]A fair billing method is consistent to its principle, and consistent across different scenarios without loopholes that could be exploited.
CBFR does not follow any coherent principle. [b]CBFR follows the principle of cost creation accountability. If you created the cost you are responsible for the cost.[/b][/quote]
For the first sentence, I will mark you as “Accept”. This means that you agree that a fair billing method should be consistent to a principle.
For the second sentence, could you explain the difference between “Cost Creation Accountablity” and “Incremental Cost Assignment” as described in here:
[ On Incremental Cost Assignment ] ([url]http://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176558[/url])
[ Vacation Home Analogy ] ([url]http://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83#comment-176526[/url])
Tuesday is a long day for me, so I can’t reply until late night.
Sorry folks, I’ve been very sick the last few days and unable to participate.
A couple of quick responses, it is inaccurate to say the poll was 89-11, the poll was 60-11 with the rest undecided. I doubt that was accurate, but I suspect some of the leaners towards the project are now leaning against the project. I suggested for the sake of accuracy, 50-50 or 45-55. Just Saying holds me to the letter of what I say, I find it a bit troubling that he doesn’t take the same precautions to insure that he’s accurately reflecting my point.
“The Davis Enterprise certainly thinks the suit is newsworthy”
They also believe that Granda and Randall’s suit is newsworthy, is that really the mark you shoot for?
“The second purpose of the suit, and the reason it was filed as a ‘class-action,’ is to extort the largest settlement possible from the City.”
If you look at the suit and the case law, there is no money really going to come in a settlement. The Sacramento law suit on non-payment simply agreed to create a system whereby Sacramento paid for their water. If the court finds the system disproportional, they don’t award damages to the suit filer, they simply throw out the system.
“The City already admitted to what they have been doing for years.”
What the city has admitted to doing is not balancing the books between the General Fund and the Enterprise fund which is somewhat different than your charge.
“Don’t expect me to believe that you and your aviation attorney friend from Southern California are doing this pro bono, including expenses. “
They probably are because there are no damages in these cases and no attorney fee provisions.
Edgar Wai said . . .
[i]My intention is to address each principle one by one first, then look at the details on whether CBFR or Equal Discount follows the principles.
This is the first one: A fair billing method is consistent to its principle, and consistent across different scenarios without loopholes that could be exploited.
Edgar’s staement: CBFR does not follow any coherent principle. Matt’s reply: CBFR follows the principle of cost creation accountability. If you created the cost you are responsible for the cost.
For the first sentence, I will mark you as “Accept”. This means that you agree that a fair billing method should be consistent to a principle.[/i]
Yes, your question was rhetorical.
Edgar Wai said . . .
[i]”For the second sentence, could you explain the difference between “Cost Creation Accountablity” and “Incremental Cost Assignment”?
The correct definition of fairness is universal and impartial. A person does not get to pick and choose a definition of fairness as they see fit. To show that a billing rate system is unfair, it only takes one scenario where the framework does not apply. The correct definition of fairness is objective, and is applicable to all situations.
Incremental Cost Assignment of costs is unfair. To prove that it is unfair, it is sufficient to show one scenario where the believer uses Incremental Cost Assignment, while in another scenario, the believer would rather NOT use Incremental Cost Assignment. When that happens, it is exposed that the believer picked and choose the method, that the believer.”[/i]
The simplest definition of “cost creation accountability” can be described as follows:
The engineers who are designing a new water system ask themselves a simple question that the Davis Water Advisory Committee spent a whole lot of time pondering, “How much capacity should the system have?”
The first step is to study system-wide aggregate usage history to determine when the peak usage period for the system will be. For the Davis water system design the result of that initial step is that the peak usage period is from 4:00 AM to 8:00 AM during the summer irrigation period. That answer determines how many bricks should be in the “bricks and mortar” of the system.
The second step is to effectively “interview each” and every customer to determine what their individual usage needs to be during the peak usage period. In effect we are taking all the bricks that were identified in the first step and purring them in a big pile on the floor, and at the end of each customer interview the customer walks up to the pile and takes out of the pile the number of bricks that are needed to meet that customer’s peak usage period needs. After the engineers complete their 16,400 “interviews” there will be no bricks left in the pile.
The third step is for the engineering/construction team to assign an overall design/construction cost to the system. That is the cost for the sum total of all of the bricks that were identified in the first step. Determining and incurring the overall design/construction cost is the “cost creation” part of the principle of cost creation accountability. Now lets look at the “accountability.”
The fourth step of the process is to mathematically allocate the total costs of the system identified in the third step to individual bricks. Each brick gets the exact same proportional amount of the costs, not a penny more, not a penny less.
The fifth step is to ask each customer to pay for the bricks they hold in their hands. They are accountable for their purchase decision, just as customers who walk up to the cash register in a store are accountable for the items they are purchasing. They hand the cashier their VISA card and the store owner knows that VISA will be accountable for providing the store with cash, and the customer knows that s/he will be accountable for the VISA bill payment when it arrives in the mail. The customer at the store can not tell the store owner that someone else in line will pay for the items, just as each water system customer can not tell the water agency that some other customer will pay for the bricks they hold in their hands.
The sixth step is for the water agency, just like VISA does, to send the customer a monthly bill for the cost of their bricks . . . and then hold the customer accountable for paying that monthly bill.
That is a step by step description of how the principle of cost creation accountability works.
—————————————-
(continued . . . )
Once the system is built, cost creation accountability works just as well for the creation of variable costs. When a customer uses water it takes electricity to pump that water through the system and chemicals to treat the water used. The water agency’s accounting system keeps track of those costs and determines what the variable costs are for each ccf of water, and then holds each customer accountable for the costs of the actual water they use.
The nature of a water system is that day by day, month by month the customers will use the system built throughout the year. Each time a customer uses the system they are effectively asking the question, “Can I please have some water?” A reliable system always responds, “Yes you can. Here it is. We will send you a bill for the variable costs associated with the water you are requesting.”
The system will also be asking itself a question each time that a customer request for water comes in. That question is, “Do we have enough system capacity to satisfy this request?” As long as the answer to that question is “No” the only incremental costs incurred are the variable costs for electrical power and chemicals. Charging an existing system customer for capital design/construction costs that the agency has no intention of incurring would not only violate the principle of cost creation accountability, but also the provisions of Proposition 218, and the GAAP rules for Enterprise Funds.
Re: Matt
According to Cost Creation Accountability, suppose once the system is built and while the debt service is being paid in the following split for the following usage pattern:
[b]Year 1[/b]
o Winter: A:20 B:20
o Summer: A:40 B:60 (Excess=0)
CBFR: A:40% B:60%
[b]Year 2[/b]
o Winter: A:20 B:20
o Summer: A:40 B:40 (Excess=20)
CBFR: A:50% B:50%
When B reduces his use, according to Cost Creation Accountability, what is the reason that A now pays? Structurally, there is no incremental cost during Year 2. Why does the distribution of the fixed capital cost change?
You have previously referred to this as “Supply Charge Adjustment”. What principle does that follow? [Ref] ([url]http://davisvanguard.org/index.php?option=com_content&view=article&id=6126:sunday-commentary-ii-dunnings-campaign&catid=50:elections&Itemid=83&cpage=30#comment-176560[/url])
[Regarding: Item 3] ([url]http://skylet.net/docs/2013-02-18-2347-WaterRatesInfoList.htm[/url])
Edgar, what your scenario is is the conservation scenario. What A has done is free up system capacity so that it is available for other customers to [u]incrementally[/u] use. That incremental use could be from a family having a new child and needing another brick during peak use times, or having grandparents move into a “granny flat” on the property with again the need for an additional brick of peak use capacity for that customer, or a marriage brings home a second member of a one-person household, or students decide to spread the rent for their apartment over one or two additional residents. You get the picture. If the water system truly has maxed out its peak capacity then the only way to satisfy those requests for additional bricks is to add system capacity, and that will mean added bricks and mortar costs for all the customers in the system.
The impacts of conservation are shared in the same way that the impacts of incremental costs are shared . . . proportionally to the number of bricks each customer originally took when the system was built.
It is worth noting that your scenarios assume that the system has no “head room.” All water systems have some head room and all the customers proportionally share in the capital costs associated with the creation of the capacity in that head room. In your year 2 scenario, all you do is add the 20 ccf to the existing head room inventory.
So when you say, “Structurally, there is no incremental cost during Year 2” you are only right if you look at incremental cost creation in Yer 2 only, but that ignores the long view. A good planner does not solely make decisions “in the moment” but rateher also with an appreciation of how a current period decision affects costs over time.
Matt, for a logical statement to make sense, it is necessary that there are situations where the logical statement is true, and situations where the logical statement is false. Otherwise, the statement is not a logical statement.
For your argument to qualify for interpretation, please use Cost Creation Accountability to explain the following:
[b]Year 1[/b]
o Winter: A:20 B:20
o Summer: A:40 B:60 (Excess=0)
CBFR: A:40% B:60%
[b]Year 2[/b]
o Winter: A:20 B:20
o Summer: A:40 B:40 (Excess=20)
CBFR: A:50% B:50%
Why should A pay more in year 2?
Please also use Cost Creation Accountability to explain whether the following conclusion follows the principle of Cost Creation Accountability:
[i]A and B decide that they need a new water plant. A believes that together they need a capacity of 80.
B says, “No way! I need 60!”
A says, “I don’t think you need 60. 40 is good.”
B says, “But I think I need 60.”
A says, “Well, in that case, we can get 60 for you, but what if you find out later that you don’t need 60? Who will pay for it?”
B says, “I will pay for it because [b]I told you that I need 60[/b]. If I don’t need it, [b]I take my own risk[/b]. I will be [b]accountable for my decision.[/b]”
And so they built the plant. B used 60 in the first year, but in the second year he only used 40.
A says, “We have an excess of 20. Are you paying for it?”
B says, “I am not going to pay for 60, I used only 40.”
A says, “But you said you will be accountable.”
B says, “I am not going to pay for it, we never wrote it down in writing that that is how we will split the cost. According to CBFR, I am only responsible for 50%.”
A says, “But if you do this, what was it all about ‘reservation’, ‘interviewing the customers’ and so on? You reserved it and now you are not paying for it.”
B says, “In CBFR, every year we recalculate the proportions.”
A says, “But that is incorrect because the decision was [b]already made[/b]. When we made that decision, you already agreed to pay 60%. It doesn’t matter if the mortgage is 1, 10, or 30 year-long. You need to be [b]accountable[/b] for the decision that is made.”
B says, “Not according to CBFR.”
A says, “CBFR is incorrect and does not follow the principle of fairness and accountability.”[/i]
Edgar Wai said . . .
[i]”Matt, for a logical statement to make sense, it is necessary that there are situations where the logical statement is true, and situations where the logical statement is false. Otherwise, the statement is not a logical statement.
For your argument to qualify for interpretation, please use Cost Creation Accountability to explain the following:
Year 1
o Winter: A:20 B:20
o Summer: A:40 B:60 (Excess=0)
CBFR: A:40% B:60%
Year 2
o Winter: A:20 B:20
o Summer: A:40 B:40 (Excess=20)
CBFR: A:50% B:50%
Why should A pay more in year 2?”[/i]
Edgar, one of the core principles of Enterprise Fund accounting is to cover all costs 100%. So the answer to your question is that the sum total of the two percentages have to add up to 100%. From a cost perspective, because there is annual debt service, the fact that the engineer sees a 20% free capacity, the accountant sees no free debt service. You have to think like an accountant, not like an engineer.
Your “I told you that I need 60. If I don’t need it, I take my own risk. I will be accountable for my decision.” scenario is very entertaining. However, if there truly were a two person system like that it wouldn’t qualify as an Enterprise Fund, so the verbal agreement between the two parties would be reduced down into a contract by a couple of lawyers and B would be held legally accountable for his “I insist on 60” decision.
The following would not violate the principle of Cost Creation Assignment, Enterprise Fund rules, and the notion of accountability I demonstrated in my scenario.
[b]Year 1[/b]
o Winter: A:20 B:20
o Summer: A:40 B:60 (Excess=0)
Split: A:40% B:60%
[b]Year 2[/b]
o Winter: A:20 B:20
o Summer: A:40 B:40 (Excess=20)
Split: A:40% B:60%
This is exactly what you would expect if the ‘mortgage’ you have been talking about is indeed analogous to a mortgage. The person who got it has to pay for it regardless whether they end up using it. As long as there is no one else entering the system, they have to pay for their [b]original decision[/b]. From Year 1 to Year 2, there is no reason to change to rates under my notion of Accountablity, and your notion of Cost Creation Accountablity. It also does not violate Enterprise Fund Accounting. CBFR did it [b]wrong[/b], because:
[b]CBFR did the calculation as if the decision is renewed every year while there is no decision being made by A.[/b]
A is forced to take the risk of B’s decision to not use his portion. CBFR is incorrect under your choice of principle: Cost Creation Accountability, and violates common sense of accountability.
In this regard, the “mortgage” analogy that you have been giving [b]misleading[/b]. A person’s mortgage would not go up just because their neighbor vacates.
A billing method that follows the principle of accountability would not need the help of another contract because the billing method itself already implements accountability. CBFR does not serve accountability.
When a new customer joins the system, the accounting automatically allocate the excess responsibility to the new customer.
[b]Year 3[/b]
o Winter: A:20 B:20 C:20
o Summer: A:40 B:40 C:20 (Excess=0)
Split: A:33% B:50% C:17%
When the entire history is collapsed (or expanded), the rate calculation result is the same:
[b]Collapsed[/b]
Max Ever: A:40 B:60 C:20
Split: A:33% B:50% C:17%
[b]Expanded[/b]
Year 1 Winter: A:20 B:20
Split: A:50% B:50%
Year 1 Summer: A:40 B:60
Split: A:40% B:60%
(cont. of the “Expanded” list. Sorry I didn’t know why it was cut off)
Year 2 Winter: A:20 B:20
Split: A:40% B:60%
Year 2 Summer: A:40 B:40 (Excess=20)
Split: A:40% B:60%
Year 3: Winter: A:20 B:20 C:20
Split: A:33% B:50% C:17%
(.. Figured that the message was cut off during to an arrow symbol.)
[b]Expanded[/b]
Year 1 Winter: A:20 B:20
Split: A:50% B:50%
Year 1 Summer: A:40 B:60
Split: A:40% B:60% ( An update. A is reimbursed )
Year 2 Winter: A:20 B:20
Split: A:40% B:60%
Year 2 Summer: A:40 B:40 (Excess=20)
Split: A:40% B:60%
Year 3: Winter: A:20 B:20 C:20
Split: A:33% B:50% C:17% ( An update. A and B are reimbursed. )
Year 3: Summer: A:40 B:40 C:20
Split: A:33% B:50% C:17%
It does not matter how many years the mortgage is. It does not matter how many times the payments are made, or when the calculation takes place. The final split is always the same. This means that no one can cheat the system by joining early or joining late, or by manipulating their use pattern. This also means that the billing method [b]automatically adjusts[/b] its rates as more data and more precision becomes available.
Edgar Wai said . . .
[i]”This is exactly what you would expect if the ‘mortgage’ you have been talking about is indeed analogous to a mortgage. The person who got it has to pay for it regardless whether they end up using it. As long as there is no one else entering the system, they have to pay for their original decision. From Year 1 to Year 2, there is no reason to change to rates under my notion of Accountablity, and your notion of Cost Creation Accountablity. It also does not violate Enterprise Fund Accounting. CBFR did it wrong, because:
[b]CBFR did the calculation as if the decision is renewed every year while there is no decision being made by A. [/b]
A is forced to take the risk of B’s decision to not use his portion. CBFR is incorrect under your choice of principle: Cost Creation Accountability, and violates common sense of accountability.
In this regard, the “mortgage” analogy that you have been giving misleading. A person’s mortgage would not go up just because their neighbor vacates.”[/i]
Your second paragraph is indeed correct. CBFR does do the calculation as if the decision is renewed every year. The reason for that is that each conservation decision provides a valuable capital asset to the system as a whole at no incremental cost to the system. There are two choices for how to handle that, 1) reward the person who conserves or 2) punish the person who conserves, with being paid nothing for something qualifying as a punishment.
So in a perfect world, and we all know there is no such thing as a perfect world, but if there were, how would you reward conservation, if at all?
The math that covers the revenue is a zero-sum math. When you allow a group to pay less, you are also forcing the other group to pay more.
Year 1
o Winter: A:20 B:20
o Summer: A:40 B:60
Year 2
o Winter: A:20 B:20
o Summer: A:40 B:40 (Excess=20)
In the situation above, the system was designed to supply 100 unit because B was a big user. If there is no one new joining the system, B is solely responsible for the excess. When there is someone joining the system…
Year 3
o Winter: A:20 B:20 C:10
o Summer: A:40 B:40 C:20
… the hypothetical saving becomes reality.
At this moment, the weights are recalculated. In Equal Discount, whether B is an [b]Asset[/b] to the system depends on whether someone joins the system. If no one joins, B is held accountable for the capital excess caused by him.
B is ‘rewarded’ for conserving only if it leads to a new member joining the cooperation.
I suppose the loophole with CBFR is more pronounced if the numbers are these:
Year 1
o Winter: A:1 B:1
o Summer: A:1 B:99
CBFR: A:1% B:99%
Year 2
o Winter: A:1 B:0
o Summer: A:1 B:o (Excess=99)
CBFR: A:100% B:0%
In this scenario, B’s made his money in the first year, and left in year 2. A is left with the water plant with 28 more years to pay it off.
CBFR only looked fair because the number I gave you looked nice. CBFR didn’t protect the people.
Another context showing how the issue above is a loophole:
Year 1
o Winter: A:20 B:20
o Summer: A:40 B:60
Year 2
o Winter: A:20 B:20
o Summer: A:40 B:40 (Excess=20)
Year 3
o Winter: A:20 B:20
o Summer: A:40 B:60
In this sequence of pattern, the story is that B didn’t intentionally conserve any water. He simply went out for summer vacation in Year 2. While he is gone in that summer, A is taking care of half of the excess.
This is like your neighbor left for vacation and not using his cable service, and the cable service provider bills you for half of that.
Edgar, to centralize our continuing discussions of this topic a Message Board thread has been created. Using that thread means the the discussion does not have to jump around from place to place. The link to that thread is [url]http://davisvanguard.org/index.php?option=com_kunena&func=view&catid=2&id=996&Itemid=192#996[/url] which can also be reached by going to the bottom of this screen and clicking on the [b]Bulletin Board[/b] link