Sunday Commentary: Time to End This

The other day we published an article with an update on the Prop. 218 process, which will come to a close at the Davis City Council meeting on Tuesday.  While the No on Measure I side has been continuing, at least to some extent, their efforts, it is starting to look like they are simply going through the motions.

Perhaps it is because the Prop. 218 process does not offer much hope, perhaps it is because, as of earlier this week, they were at only 2000 protests, 6000 short of the number needed.

At some point, democracy is about accepting defeat.  It is about letting the people speak and when the people speak, the leaders need to follow their lead.  On March 5, actually in the month leading up to March 5, the people spoke.  It was not a unanimous voice.  It was not even necessarily a resounding voice.  But they spoke nonetheless.

Democracy is about accepting defeat on one issue or one candidate, so that one is willing to accept the defeat, and accept the legitimacy of the winning issues.  Without that fundamental trust, democracy would not be possible and would devolve into warring factions.

The opposition of the surface water project can certainly drag this on well past Tuesday.  Michael Harrington has boldly proclaimed that the JPA and the surface water project will never get enacted in the current form.

His unfiled lawsuit has two critical parts.  The non-payment of water by the city of Davis is a real issue.  The city has acknowledged that they have not tracked the balance of the payments from the general fund to the enterprise fund and vice-versa.

Davis Mayor Joe Krovoza told the Vanguard, “In a strict and narrow sense, the City has not been paying for its water, but to report that and that alone is a distortion of the issue.”

“True too is that the city has not been billing the Water Utility for costs associated with city water use, nor billing the Water Utility for certain items that should be billed to all ratepayers,” he said.  “We’ll see in the coming months how these two sides of the balance sheet work out.”

“This is fundamentally an accounting issue between the General Fund and the Water Utility, he argues. “There hasn’t been any deception here.”

But that issue is not going impact the surface water project.

The precedent here is a 2010 suit against the City of Sacramento with regard to non-payments for municipal water use.  That settlement put all cities on notice for changing their accounting and the city of Davis is slowly moving in the right direction.

But all that the suit in Sacramento did was force the city to do what the city of Davis is moving toward – paying for their water explicitly.

According to the nine-page settlement agreement, “All City buildings, lands and facilities receiving flat rate water service or metered water service from the City’s water distribution system and not currently paying the standard flat rate or standard metered rate charged to similar retail water service customers, will pay the standard flat rate or standard metered rate charged to similar retail water service customers beginning July 1, 2010 and thereafter.”

The other part of the lawsuit is the Prop. 218 challenge on proportionality.

Mr. Harrington’s suit 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.”

However, attorney Kelly Salt, an expert on Prop. 218 argues otherwise.

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.

Ms. Salt explains both the fixed distribution charge, which is established based on the size of the water meter, and the variable charge that is the “basis of the cost of providing water.”  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.”

Kelly Salt, Harriet Steiner, Doug Dove and others have poured over the CBFR rate structure to make sure it will pass constitutional muster.  They believe it will.  We believe it will, as well.

Michael Harrington somehow believes that the court is going to come in and fix whatever problems still remain with the rate structure, but we believe that is unlikely.  The court is going to be loath to overturn the will of the majority of voters in Davis, absent some sort of glaring inequity.

As we pour over the numbers in CBFR, we see that CBFR actually closes the inequity that currently exists in Davis where low-usage customers are subsidizing higher usage customers.

Mr. Harrington has yet to serve the suit on the city.  In the interest of this community, he should file it in his back pocket and let the city get on with other issues.  The city is already fixing the tracking of their own water usage and the CBFR will likely pass constitutional muster.

In the meantime, the city has other priorities.  Steve Pinkerton took over as City Manager in September 2011.  His first meeting was the fateful September 6, 2011 meeting in which the council made critical errors in passing an untested rate structure without community input, a rate study, or sufficient scrutiny.

Mr. Pinkerton was thrown into the proverbial fire and, while the city has been able to focus on other issues, there is a huge and looming fiscal crisis that remains.  We need to figure out how to fund roadway improvements, park infrastructure repair and critical city infrastructure, how to finish off contracts with the Firefighters and DCEA, and how to move the city onto better fiscal ground.

The next three months will demand full staff attention, as well as community engagement, that has frankly not been there due to the enormity of the water issue.

Unlike some in this community, I believe that Michael Harrington and those who pushed for the water referendum have done us a great service.

While we do not subscribe to the by any means necessary mantra, the personal attacks and deception, there is no doubt that we are better off with what we have in place now than what we would have had on September 7, 2011.

Those who diminish this fact because they do not like Mr. Harrington and/or the manner in which he conducted himself and the level of public discourse need to step back and look at things objectively.

In a recent conversation, Matt Williams, not only a member of the WAC and the designer of CBFR, but also a member of the Vanguard editorial board, noted that he probably knows this project as well as anyone in the community.

Those who believe that the only change to the project had to do with the size and cost-sharing, miss out on just how poorly the rates were designed following the September 7 vote at 3 am.

The staff may have understood the rates that were passed that day, but it is not clear that the council did.

Councilmember Wolk told Davis Enterprise columnist Bob Dunning, “The motion I voted for calls for maximum rate increases of 14 percent per year. Your math (which looks right to me) shows that is not necessarily the case for some.”

In fact, as Mr. Dunning would point out, “14 percent has absolutely no relation to reality. The actual figures are much, much higher. Worse yet, the city made the conscious decision to balance the water project budget on the backs of larger families through an onerous ‘tier’ system.”

However, as it turns out and was never adequately explained, the 14 percent figure was based on an “assumption” of a 20 percent conservation rate.  The actual implementation of the rate hikes would depend on future consumption patterns.

It did not help that the Enterprise got the story wrong, reporting, “Hours of discussion that began Tuesday night culminated in the Davis City Council’s 4-1 decision at 3:20 Wednesday morning to raise water  rates by no more than 14 percent annually over the next five years.”

The public was confused.  The council was confused.

The staff report clearly indicated, “These estimated monthly water bill impacts assume an overall 20% reduction in single family residential water consumption over the five-year period. Customers with below average water use now will experience lower-than-average monthly water bill impacts, while customers with above average water use would see higher than average monthly water bill impacts. The individual water bill impact will vary depending on a customer’s current water use and their future conservation efforts during the five year period.”

Nevertheless, even supporters of these rates would come to question their wisdom – the lack of an adequate rate study and, worse yet, the lack of effective public outreach.

In the end, we not only have a better outcome, but with a year of study, we have a better process.  These rates have been scrutinized by staff, legal counsel, the city council, the WAC and now the public.

Are they perfect?  No.  But the previous rates would have likely not survived a challenge in the courts.

So, we are in far better shape now than we were in the early hours of September 7, 2011.  While we can deplore the means, we should not allow that to take away from the fact that we have a better system in place now, and the public has spoken.

But now we ask Michael Harrington to do one more service to the public, and let this go.  The people of this community have spoken – it is time to move on.

—David M. Greenwald reporting