Plaintiffs File Motion for Additional Evidence in Water Lawsuit

Share:

lawsuitOn August 26, Attorney Michael Harrington filed a motion arguing that “it is appropriate, in resolving the issues involving this Proposition 218 challenge to the City’s actions and omissions, that extra record evidence be used (and) that plaintiffs have an opportunity to provide Expert Reports, both to support its position and to refute the City’s position.”

He argues, “The City is attempting to hamstring the Plaintiffs by limiting the evidence which can be used to challenge the City.”  He argues that the city has “seemingly deliberately” left out a critical email report by Matt Williams, submitted to the city in January.  He adds, “The City even objects to having Plaintiffs present Expert Reports for the Court’s situation.”

Mr. Harrington argues this is not an attempt to seek “unlimited discovery” but rather include critical expert reports.  He argues, “The City failed to put into the Admin Record the Bartle Wells Cost Study until the last hour, at the March 19, 2013 Rate Hearing, when the public had no opportunity to respond and analyze these very complex financial matters.”

The city responds that it has already prepared a comprehensive record of well over 11,000 pages on the water rates alone, but the “Plaintiffs seek to augment this record with items that are (1) already contained in the record which Plaintiffs have already overlooked, (2) purportedly new ‘expert’ declaration by two individuals (Matthew Williams and Mark Sigler) who are, and since its creation in December 2011, have been members (or alternate members) of the WAC, [Water Advisory Committee] and (3) unidentified records sought in additional discovery.”

The city argues, “The WAC conducted extensive hearings analyzing the rate options and advising the City Council on setting the water rates at issue.  Plaintiffs and their ‘experts’ were actively involved in the rate-setting process and submitted comments to the City Council – no further expert reports are necessary nor warranted.”

The city continues, “Plaintiffs are not permitted to propound new expert evidence or propound discovery in an attempt to generate new evidence not previously brought forward to try to defeat the City’s water rates.”

On May 1, 2013, the city’s new water rates took effect, established in Ordinance 2405, which will fund the voter-approved Davis-Woodland Water Supply Project.  The ordinance includes two rate structures.  The first has been “described as a traditional rate structure and is effective from May 1, 2013 – December 31, 2014,” and has been dubbed the Bartle Wells Rates.

The second rate structure takes effect January 1, 2015 and has been described as “the Loge-Williams Rates” or “Consumption Based Fixed Rate” or CBFR.  Two WAC members, Frank Loge and Matthew Williams, helped to devise this rate structure.

The 360-page filing in Mr. Harrington’s declaration includes the report of Matthew Williams which addresses the Proposition 218 proportionality issues of a number of components of the project.

For example, he cites four potential problems with the variable charge (VC).

Mr. Williams argues, “Issue #VC-1 . Proportionality disparities exist for Multi Family Residence (MFR) class customers, specifically because some, but not all, MFR customers have installed dedicated meters to serve their landscaping irrigation needs.”  The Proposition 218 proportionality question generated by the above rate differential is, “If irrigation water costs and charges are proportional, how can some Multi Family Residence class customers be paying a 31% higher per ccf rate than other Multi Family Residence customers for irrigation water?”

Second, “Issue #VC‐2 ‐‐ Proportionality disparities exist for Commercial class customers, specifically because some, but not all, Commercial customers have installed dedicated meters to serve their landscaping irrigation needs.”  The Proposition 218 proportionality question generated by the above rate differential is, “If irrigation water costs and charges are proportional, how can some Commercial class customers be paying a 57% higher per ccf rate than other Commercial customers for irrigation water?”

Third, “Issue #VC-3 – Because virtually all of the monthly water consumption over 29 ccf per month is for irrigation, the Tier 3 rate is the $2.53 per ccf. Proportionality disparities exist between SFR irrigation charges in Tier 3 and the Irrigation Meter class charge per ccf of $2.58.” He asks, “If irrigation water costs and charges are proportional, how can some Single Family Residence class customers be paying a 2% higher per ccf rate than other Single Family Residence customers for irrigation water?”

Fourth, “Issue #VC-4 — In its comprehensive rate study Bartle Wells recommended that Tier 1 cover 0-10 ccf and that Tier 2 cover 10-29 ccf with the $1.34 and 1.49 rates per ccf set proportionally based on the underlying cost of service analysis. At the 12/18/2012 City Council meeting, on the basis of political considerations, City Council reset Tier 1 to cover a 0-18 ccf range; however, the $1.34 rate per ccf was left unchanged.” The Proposition 218 proportionality issue generated by the above rate differential is, “The City needs to provide evidence that the rate per ccf in the reconfigured Tier 1 and Tier 2 are consistent with the underlying Bartle Wells cost of service analysis.”

He also identifies a number of key issues with the fixed/distribution charge, writing, “Arguably, the system of setting fixed fees by meter size fails Proposition 218’s proportionality test by requiring low-water-use customers to pay fixed costs for water they have the theoretical potential to use, but do not have the actual capacity to use, while giving those customers who use a larger ‘share’ of the water infrastructure (based on meter size) an incentive to do so.”

In other words, he adds, “Thrifty and extravagant water users pay the same fixed fee, but derive entirely different benefits from the system they fund with their fixed fees. The thrifty user’s fixed fees cover some of the fixed costs the wasteful user imparts on the system, in effect subsidizing the water waster.”

He then goes on to identify five specific issues here.

He goes on to argue that “it is important to examine proportionality issues as they affect individual customers.”  Mr. Williams argues, “Across all meter sizes there is substantial difference between potential demand (which can be imputed to be the median value of the consumption values) and actual demand as represented by the water use value in each decile for a given meter size.”

He then argues that the proportionality issues can be fixed: “Differentiating between fixed rates and fixed revenue by introducing flexible, annualized fixed fees based on metered use of a prior time period would obviate many of the problems mentioned above. Introducing the element of time supports the generation of fixed revenues (for the agency) and fixed fees (for the consumer) from consumption-based statistics.”

That analysis is then supplemented by the analysis of Mark Siegler, who examined the Loge-Williams Consumption-Based Fixed-Rate Structure on August 26, 2013.

He argues, “The Loge-Williams water rate structure… adopted by the City of Davis almost certainly exceeds the proportional cost of the service to thousands of accounts, with single-family residential and irrigation accounts paying roughly 40 percent more on average… than apartment building accounts.”

“Available evidence strongly suggests that these differences in charges per ccf are not proportional to the cost of providing the service,” he continues.  “There are large differences in water bills across households that do not appear proportional to the costs of providing the service.  Because the Loge-Williams water rate structure is a new and untried method for charging water customers, it is critically important for courts to examine the legality of such a structure before implementation in Davis or any other jurisdiction.”

In his analysis, Mr. Siegler argues that the City “has drastically underestimated the decrease in water use that will take place during the peak months, and as a result, throughout the year.  While the City assumed different conservation assumptions across user classes, overall they predict a 20 percent decrease in per capita usage.”

He goes on to note that many subdivisions are considering opting out of the water system by drilling their own shallow wells, and he cites Village Homes and El Macero as possibilities.

He adds that the city and school district are likely to do the same.

He argues, “Since the vast majority of the costs are fixed costs, Davis residents cannot conserve their way to lower bills if the vast majority of residents decide to conserve.  Instead, we may end up with lots of artificial grass, gravel, cacti, and a diminished tree canopy, but overall bills still in excess of $100 a month…”

The hearing on the admission of these reports as evidence will be September 12, 2013 at 8:30 am in front of Judge Maguire.

—David M. Greenwald reporting

Share:

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.

Related posts

23 thoughts on “Plaintiffs File Motion for Additional Evidence in Water Lawsuit”

  1. Ryan Kelly

    Weren’t the arguments being made by Mark and Matt addressed in the WAC meetings? Weren’t these ideas addressed through the democratic process? I wonder how much this is costing us?

  2. David M. Greenwald

    “Seems like a bit of a stalling tactic on the part of Harrington. But, why?”

    Why is that? It seems to me he believes that Matt’s document undermines the city’s case – frankly these are points that were made by me and others when CBFR was first posed.

  3. David M. Greenwald

    ” Weren’t these ideas addressed through the democratic process?”

    A constitutionality issue is never addressed through the democratic process.

  4. JustSaying

    It seems like stalling since he’s asking for something he already has–as you point out that you pointed out. What is he gaining by asking for these documents except a lengthening of the process?

  5. Practical

    [quote]Ryan Kelly

    Weren’t the arguments being made by Mark and Matt addressed in the WAC meetings? Weren’t these ideas addressed through the democratic process? I wonder how much this is costing us?[/quote]

    The arguments being made about the proportionality of traditional rate structures like the one Davis had for the past five years and the one we now have from 5/1/2013 through 12/31/2014 were presented by Matt to the WAC in October 2012 and are thus part of the administrative record that the court will be using to make its decision. Those arguments about the Prop 218 proportionality of traditional rate structures were one of the main reasons that caused the WAC members to motion and pass a formal decision that they would like to hear more about CBFR. Then on December 11th and December 18th the WAC recommended CBFR in large part because of those arguments.

    So Ryan is correct that the arguments made by Matt were indeed addressed in the WAC meetings. Further, my inspection of the Administrative Record submitted by the City to the court shows that Matt also submitted a written public comment at the January 15th Council meeting on this same issue. The first paragraph of that public comment reads:

    “Council Members, I realize that the decision you have made regarding the 2/3 hybrid rate structure was not easy and involved tradeoffs because of the many, often conflicting voices. For the record I would like to point out some legal concerns that I have regarding all traditional rate structures, and specifically the rate structure that will be in place in Davis from May 1, 2013 through December 31, 2015”

    One of the problems with the democratic process is that sometimes the voters make decisions that run afoul of the law. The risks of illegality appears to be what the public record shows in both 2012 (at both WAC and Council meetings) and in the 2013 Council meeting. Harrington appears to be taking information that is in the public record and highlighting it for the court.

  6. Practical

    [quote]JustSaying

    It seems like stalling since he’s asking for something he already has–as you point out that you pointed out. What is he gaining by asking for these documents except a lengthening of the process?[/quote]

    I don’t believe that the process is being lengthened by this request. The court date has been set and this appears to be legal maneuvering that is intended to be sure the judge is as aware as possible about the most important documents in the rather lengthy Administrative Record.

  7. Ryan Kelly

    It is a tactic to bring a particular piece of information to the Judge’s attention. But, at the same time accuses the City of hiding information and dishonesty. I would still like to know how much this is costing us.

  8. Davis Progressive

    one of the standard tactics of obstruction is hide key information in a dump of obsolete and useless info. so if they dumped 11,000 pages on a judge, who is going to read that?

  9. Ryan Kelly

    How much were they supposed to give Mike. Are you saying that they should have held stuff back? It doesn’t matter. He has the information and sounds like he never looked through it. He’s had months to do that. He accuses them of not including it – not that they didn’t put a sticky note on it for him.

  10. Practical

    [quote]Ryan Kelly

    It is a tactic to bring a particular piece of information to the Judge’s attention. But, at the same time accuses the City of hiding information and dishonesty. I would still like to know how much this is costing us.

    How much were they supposed to give Mike. Are you saying that they should have held stuff back? It doesn’t matter. He has the information and sounds like he never looked through it. He’s had months to do that. He accuses them of not including it – not that they didn’t put a sticky note on it for him.[/quote]

    They are supposed to give the plaintiff the entire Administrative Record of events and communications that led up to the rate ordinance passage. In this case that means a whole raft of WAC meetings and a handful of Council meetings and all the supportive e-mails and documents associated with those events and meetings. That is the law. That is also a boat-load of files to review, and the vast majority of those files are not central to the case. I would seriously doubt that Mike never looked through the documents. He would have done that just to get a sense of the process that the court was going to have to go through itself. Helping the court help itself is a good strategy for establishing the court as a receptive audience. Not helping the court help itself is a good way to create a potentially hostile court. Lawyers prefer a receptive court to a hostile court.

    I agree with Davis Progressive. There are legitimate legal points here, even if you don’t like the messenger who is making those points.

  11. David M. Greenwald

    ” I would seriously doubt that Mike never looked through the documents. “

    In fact, the first hundred pages of Mike’s declaration chronicles the documents received from the city.

  12. Ryan Kelly

    I am anti-this lawsuit. The fact that Mike is leading the charge doesn’t make me like it less. I don’t believe that the plaintiffs are victims and need relief from the Court. I believe that they want to stop the water project, pure and simple.

    However, I think that Mike is costing the City millions of dollars and he’s hoping that a future settlement will solve his personal financial problems. I would give details, but the information, which speaks to his character, is off limits here.

  13. biddlin


    biddlin

    10/06/11 – 09:22 AM

    The most expensive components of this project could be the egos !”

    02/17/13 – 09:32 AM
    “… there is no depth too deep for some Davisites to delve, in their quest to keep a few bucks, at the expense of millions . While this makes for some great mockery at your expense, and goodness knows your mockery account, of late, overfloweth, you seem to be close to starting what is late to begin with .[i][b][u] Whatever deals this project could screw up for various property interests and those providing them services, [/u][/b][/i]the health of the community,its economy, infrastructure and environment are in greater jeopardy if you delay even longer .”
    Biddlin ;>)/ .

  14. Michael Harrington

    I think the ratepayers derserve constitutional rates for the sewer and water services they pay precious money for. The business owners mostly can pass it down to customers, so the only real ratepayers actually paying for the new surface water plant are the Davis homeowners.

    If the Court strikes down the rates, the CC only has itself to look at in the mirror. They were provided the 1/15/13 email by Matt Williams, and chose to ignore it in the rush to not miss the “train is leaving Woodland” artificial deadline.

    This is similar to the CC knowing about the water rate challenge when the CC entered into that 2/26/13 JPA Agreement with Woodland, and then on 3/3/13 intentionally letting the off-ramp deadline pass by.

    These are complicated matters, and hundreds of millions of dollars in ratepayer money is at stake. Expert reports could be very helpful to the Court’s analysis.

  15. Ryan Kelly

    As I said, important information about this lawyer is edited off of this blog, that speaks to his character. Some day it will come to the surface and people will be clucking their tongues and shaking their heads, and saying that they wished they had taken the time to look at true victims in the community.

Leave a Reply

X Close

Newsletter Sign-Up

X Close

Monthly Subscriber Sign-Up

Enter the maximum amount you want to pay each month
$ USD
Sign up for