54.1 to 45.9 margin, deceptively comfortable. The reactions: polar opposites.
“The citizens of Davis have spoken,” Yes on Measure I campaign manager Will Arnold told the Vanguard on Tuesday night. “Our community deserves a secure and sustainable water future.”
“This has been a long and complex decision making process over the past several decades,” he added. “Now is the time to move past our divisions and make the critical investments necessary to ensure a cost effective and sustainable future for our community.”
But, despite the win by surface water project, that hardly seems possible, at least judging by the response from Michael Harrington on the No on Measure I side.
“Round two now over,” Mr. Harrington said cryptically. “The score is tied.”
He would offer no response to the Vanguard‘s follow-up question.
We can, however, wager some guesses.
Challenges Still Ahead
There is the Prop. 218 protest process that is still underway.
“Why did the (City Council) strip the water rate increases from the ballot vote on Measure I?” Mr. Harrington asked during the day. “Be sure to send in your rate hike protest to the City Clerk!”
It seems unlikely that a Prop 218 process would succeed in blocking the process, when the No side could not muster a majority to oppose Measure I.
We have noted the problems with the Prop. 218 process in the past. The whole reason that we had a referendum to begin with is that the Prop. 218 process is patently unfair. It allows for people to protest the rate vote through an affirmative step that is far more rigorous than ordinary voting requirements.
It counts all non-responses as a vote in favor of the rate hike. It precludes entire classes of people who will be just as impacted as property owners from participation.
There is also the court challenge filed by Michael Harrington, that has never been served on the city.
Mr. Harrington further claims, “The Current Water Rates violate Proposition 218 and are unconstitutional and illegal in that, inter alia, they impose a fee or charge incidental to property ownership which exceeds the proportional cost of the services attributable to the parcel. The City knows this, and staff and/or paid city water consultants acknowledged such constitutional deficiencies at various meetings of the City Water Advisory Committee.”
He adds, “Plaintiff contends that Current Water Rates are in violation of Proposition 218 and therefore unconstitutional and illegal. The City disputes this contention.”
A January 15, 2013 letter to the city clerk from Nancy and Don Price writes, “We believe that the current rate system, adopted in 2010, and the new proposed structure, unfairly charge some classes of users differently than others, are terribly confusing and, for the many reasons outlined in the documents submitted to the Water Advisory Commission, city files, and the City Council, the current and proposed rates otherwise do not conform to law.”
The suit argues, “The Loge Williams Rates do not comply with Proposition 218 and are unconstitutional and illegal in that, inter alia, they impose a fee or charge incidental to property ownership which exceeds the proportional cost of the services attributable to the parcel.”
But the suit has, to date, not been served on the city, with Mr. Harrington citing strategic considerations.
As Frank Loge and Matt Williams argue in their response column, “Saying rates are not proportional, though, does not make it so.”
They continue, “What would a proportional system look like? The suit offers no specifics beyond Dunning’s column, which argues that every gallon of water should cost the same to deliver to every ratepayer every day of a given year.”
“Reality, however, does not conform to this analysis,” they contend.
Senator Lois Wolk argues, “Davis’ Proposition 218 rates are legal, consistent with the California Constitution and state law and worthy of our support.”
She writes, “Davis’ proposed rates for the following three years are also consistent with this state law. Those rates make certain that each homeowner pays for his/her proportion of the fixed costs. As conservation increases, then costs will decrease. This new rate approach resolves a problem that water agencies have long been struggling to address – how to pay for your fixed costs (the lion’s share) with variable or dropping payments.”
Mr. Harrington has argued that the courts will have to step in and figure out the rates, but the courts are going to be reluctant to tamper with a project approved by the voters that cleared the Prop. 218 process, and will only step in if the rates are egregiously out of line.
Mr. Harrington has argued that the rates fail proportionality requirements, but when Matt Williams and Frank Loge designed the rates, they submitted their rates to Kelly Salt, a Prop. 218 expert with Best, Best and Krieger.
“When we were done, we submitted our work to Kelly Salt, a lawyer who is one of the state’s leading experts on Prop. 218 compliance,” Matt Williams and Frank Loge wrote. “Her legal opinion was that it passed muster, and Davis City Attorney Harriet Steiner agreed. These lawyers work for the people of Davis, are highly qualified and have no ulterior motives or hidden agendas.”
In her legal memo, Kelly Salt concludes, “We believe that the CBFR structure provides with the substantive provisions of [Prop 218].”
She adds, “In fact, it could be argued that when water consumption is priced to capture the costs associated with greater demand, the rates more closely reflect each customer’s proportionate cost of providing water service by ensuring that those who reasonably use water do not pay for costs generated by those who place the most demand on the system.”
She writes, “Together, the rates for the two components of the City’s water service fees are structured to recover the proportionate costs of providing water service to each customer class.”
That leaves us with Michael Harrington’s public utilities initiative, which he believes will be a Measure J/R ordinance for utility projects, and he believes will apply retroactively to the surface water project.
As he wrote, “We will shortly file with the City Clerk our Initiative, which will serve as the Measure J/R for larger utility projects, including both water and sewer utilities.
He argues that the intiative would “require larger projects to be fully vetted by all relevant city commissions,” “require an outside, transparent audit of the water enterprise fund;” “require the City to immediately move to set up the metering, accounting, and payment systems so that the City pays for its own water usage;” “require the City to follow certain California codes concerning the bidding of professional contracts and retention of outside utility consultants;” and ” require a full EIR (not like the rushed, defective EIR that was done in the middle of the night at the end of December 2010, at Don Saylor’s last CC meeting before resigning).”
It would also require specific project design features, and “a stop-lock feature on total project construction costs, so the voters must re-approve the project before the construction costs can exceed the voter-approved amount” and, of course, “require the entire package to be put to a city-wide vote.”
“If the proposed project is approved, then the City will conduct a formal Prop. 218 notice on the rate changes; it should sail through,” he writes. “Never again should a project this large be pushed through planning with such an odd and opaque planning and approval process.”
The Way Forward
The critical question is whether the lawsuit has the ability to block Measure I. The city certainly spent a good deal of effort to vet the rate structure, and so it seems unlikely that this will occur.
The city needs to complete the Prop. 218, but we believe at this point that is mere formality.
In the end, the Yes on Measure I campaign clearly benefitted from the public process that the WAC engaged in, the support of elected officials in Davis, and a clear financial advantage.
However, the closeness of the race suggests that the community remains strongly divided on water, among other critical issues.
The city now must turn to fixing its fiscal house, but also find a way to bring people divided on the issue of water together on other critical matters.
Councilmembers Brett Lee and Rochelle Swanson sounded the right tone in their piece on Tuesday.
They wrote, “Whether Measure I passes or fails, this election has once again reaffirmed the fact that the citizens of Davis care deeply about civic matters. We believe we all want the same thing — continue to foster the wonderful quality of life here.”
“As members of a teeming community of communities, we are asked to sacrifice a small portion of self-interest in exchange for the common good of our fellow community members,” they write. “We face several substantial challenges over the next few months. We must find a way to have a sustainable budget while addressing very large unmet infrastructure costs, such as outstanding road and bike path repairs. Our City staffing costs have been rising due to unfunded pension liabilities and increasing retiree health care costs. Our parks and recreation budget is not meeting the high expectations of the community.”
Optimistically, they offer: “We will meet these challenges. The city council working together with the involved populace will be able to craft solutions to these issues. We will not be able to please each individual on every item as we move forward, but we hope that each individual will recognize what we are trying to do is not for the benefit of a favored few, but for the community as a whole. As such, open and honest community dialog is essential if we hope to develop and implement policies that are for the greater good.”
—David M. Greenwald reporting