Council Puts Water Rates on the Ballot in June; Judge Orders City Briefing in YRAPUS Case

Vote-stock-slideThe city council in the wee hours of the morning on Wednesday, in a motion by Lucas Frerichs and seconded by Mayor Pro Tem Dan Wolk, voted unanimously to put the water initiative on the ballot.

Council approved a resolution: “Resolution Ordering an Initiative Entitled ‘An Initiative Petition to Repeal Water Rates Applicable to the City of Davis Water System’ to the Ballot for the Previously Called June 3, 2014 Municipal and Special Election, Directing the City Attorney to Prepare an Impartial Analysis, and Providing for the Submittal of Primary and Rebuttal Arguments.”

The initiative has now been placed on the June 3, 2014, ballot along with the sales tax and the council election.  A report will be returned to council on March 11.

Mayor Joe Krovoza said, “I am of the mind that the voters have gone through the initiative process, as it’s played out there is an initiative, it’s valid certainly at this time, there’s an election coming up and I think we go forward and put it on.”

At the same time, the mayor believed that the city was working hard to work the rates down through a variety of mechanisms.

City attorney Harriet Steiner’s view was that all this initiative does is repeal the ordinance that the council passed last year.  She told council, “You can in effect repeal or modify the ordinance and reduce the rates without any additional (Proposition) 218 process.  Once you do that, the initiative would still be on the ballot, if you set it to be on the ballot, but the action of the council would in my opinion have mooted it, because you would have adopted new rates.”

“But the voters would still be voting on whether or not they want to repeal an ordinance,” she added.  “We’re not in a place to do that at this time because we do not have an action.”

Back on July 23, 2013, the city received a “proposed initiative measure to repeal Ordinance No. 2405, which authorized increases in the City’s water rates over five years.”

After receiving the title and summary, the initiative proponents published the title and summary and then began circulating the petition for signatures. The proponents had to submit signed petitions within 180 days of receipt of the title and summary,

On January 23, the initiative gatherers returned 2243 signatures, and last week the Yolo County Elections office confirmed more than 1800 were valid, leaving it in the hands of the city council to decide what to do with it.

There is some question of Ms. Steiner’s belief that the city could reduce the water rates and therefore moot the initiative.  Initiative proponents told the Vanguard they have legal authority that they believe that once the initiative is qualified they can only adopt the initiative or put it on the ballot.

lawsuitJudge Orders Defendant Briefing in Yolo Ratepayers Case

Judge Dan Maguire on Tuesday ordered the city to respond in the water case, Yolo Ratepayers for Affordable Public Utility Services (YRAPUS) v. City of Davis.

In January, Yolo County Judge Dan Maguire denied the claims of the Yolo Ratepayers for Affordable Public Utility Services (YRAPUS).  He wrote, “The water and sewer rates adopted by the City of Davis meet the proportionality standards of the California Constitution, and therefore plaintiffs’ claims are denied.”

However, that ruling was tentative and the parties had 15 days to comment and make objections.  After receiving and considering the parties’ responses, the Court will enter a final Statement of Decision and Order.

On Tuesday, Judge Maguire noted that on February 6, 2014, the plaintiffs submitted Comments in Response to Court’s Tentative Decision and Proposed Statement of Decision. The city did not respond at that time, but now have been ordered to do so, based on the plaintiffs’ argument.

Judge Maguire wrote, “The Court hereby solicits the defendant’s written response to these comments, and the defendant may file a written response, not exceeding ten pages, by February 25, 2014. The plaintiff may then file a reply, not exceeding five pages, by March 5, 2014. In addition to service by mail, the clerk shall send a courtesy copy of this order to all counsel by facsimile, to ensure that the briefing is received in time.”

The plaintiffs argued that the court’s ruling that “proportionality may be established by ‘grouping similar users together’ and then charging members of the group according to their usage” – “is inconsistent with Proposition 218.”

They argue, “Proposition 218 clearly and unequivocally requires a parcel by parcel analysis and not a class by class analysis of the costs to be charged to a property owner.”

The plaintiffs note that the court cites two decisions which in essence rule “that Proposition 218 does not mean what it says.”

They argue, “Plaintiffs do not accept the idea that a Court of Appeal can so cavalierly ignore the plain words of a constitutional provision or that the two cases cited actually support the conclusion that one can ignore the literal mandate not to impose upon any person or parcel more than the proportional cost of service attributable to the parcel.”

They add, “A close reading of the two cases cited by the Court in this case shows that neither actually supports a construction which would justify ignoring the plain words of the constitutional provision at issue.”

During oral arguments in December, Judge Maguire himself would note the discrepancy between case law and the plain language of Prop 218.  In the question as to what the relevant level of comparison was – person by person, parcel by parcel, or class by class, Judge Maguire would note, in response to the city’s argument in favor of a class by class comparison, “I understand that argument. I understand the case support for it, and there is case support for it.”

He would add, “What I’m struggling with though is how to square that concept with the language of Section 6 which says, ‘The charge shall not exceed the proportional cost of the service attributable to the parcel.’ So that seems to suggest a more granular analysis than class by class.”

In reconciling that issue, he wrote that the language of Proposition 218 would appear, “at first blush” to require the city to demonstrate on a per-parcel basis, that the rates are “proportional to the costs for that parcel.”  However, “The Court of Appeal, which this Court must follow, has rejected this interpretation, and found instead that ‘proportionality is not measured on an individual basis,’ but instead is ‘measured collectively, considering all rate payers.’”

The plaintiffs also object that the water rates “illegally discriminate among Single Family Residence (SFR) properties based on the size of the water meter.”  The plaintiffs write, “It makes no sense to suggest that potential use is a rational, much less reasonable, basis on which to base the fixed charges to be spread over all the SFR properties.”

“The Court has cited the water rate study (W9392-9393) for the proposition that ‘parcels with bigger meters do in fact tend to use more water,’ the plaintiffs continue.  “While this may be true for all parcels, this is not shown to be so for SFR parcels. The Court may recall that during oral argument, the City cited this portion of the record to show that the bigger meter parcels consume more water than the smaller meter parcels. However, the figures show nothing as to the SFR properties, but rather combine the SFR properties with all other properties. Plaintiffs pointed this out in reply, and the City had no response.”

Finally, the plaintiffs object that the “Water Rates impose a tiered rate structure which the City has not justified on the record.”

They write, “As the Court notes, Plaintiffs do not challenge the concept that the City may consider the need for water conservation in setting rates…  However, this does not excuse the City, in setting tiers, from complying with the proportionality requirements of Proposition 218. Absent such compliance, the rates are illegal and unconstitutional.”

The plaintiffs argue, “Plaintiffs challenge the tiered rate structure imposed by the City’s Bartle Wells rate structure on several grounds, and the City has not come forward with evidence to meet these challenges.”

The plaintiffs also challenged that the decision regarding the sewer rates is inconsistent with the facts and the law.  In particular, the plaintiffs note, “The Court states that the winter water use does not correlate well with sewer use and that Plaintiffs rely on a study that analyzed water use in El Macero, near Davis.”

They argue this is only partly correct, “It is correct to state that the El Macero study supports Plaintiffs’ position because the study showed that El Macero residents use significant amounts of water in the winter for irrigation…   It is also true that the City’s own data graphically demonstrates that winter water usage is not even close to a proxy for indoor water (i.e. sewer) usage.”

The further note, the City’s sewer rates have a variable charge based on winter water usage which is subject to a cap.  The plaintiffs argue, “While the concept of a cap makes some sense to attempt to avoid charging a homeowner for outdoor water use, which does not burden the sewer system, the alleged ‘cap’ in this case has no basis in reality.”

The city now has, as noted above, until February 25 to respond and the plaintiffs have until March 5 to reply to the city.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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  1. Day Man

    I’ll vote to defend the water rates, if allowed, but I agree that it was the right thing to do. Proper initiative process, and the CC ought to honor that. Based on what the attorney was saying, it sounds like there’s a chance it’ll be a meaningless ballot item though (if the CC adopts new rates between now and June), right? Even if it’s moot, I would think its presence on the ballot might affect the sales tax measure too. Very interesting.

    1. John Baldry

      The Council and staff would be very foolish to respond in 2014 to a better bottom-line by reducing the rates. It would be much more appropriate to either reduce the amount of any borrowing for the suface water plant or increase the wear fund reserves or fund some of the capital repairs that the current water system needs.

      None of those three alternatives would require a new rates ordinance and all three would be fiscally wise policy.

      Lowering the specific rates in the ordinance would require the passage of a new ordinance and the voiding of the existing ordinance. If the Council does that we will be in a Groundhog Day scenario, with the initiative proponents arguing that once again the City is using a sidestepping maneuver in order to deny the citizens their legitimate right to vote. As much as I like Bill Murray, I don’t want to emulate the rebirth cycle story line of Groundhog Day.

      Leave things in place until June. Let the people vote. When the 60-40 landslide vote is in the books putting an end to this water soap opera, then consider whether a fourth option should be added to the fiscally wise options. For now, either

      — Reduce the amount of any borrowing for the suface water plant, or

      — Increase the wear fund reserves, or

      — Fund some of the capital repairs that the current water system needs, or

      — Some combination of those three.

  2. paul brady

    Old Willowbank does not get to vote, but we do have large lots and considerable greenery of all sorts. Present water costs are close to $1000 per year. City gave us numbers indicating 2018 costs will be close to $4000/yr. We did conserve when rates were more than doubled from 2002/3 to 2012. We are mostly on drip and have no lawn so additional conservation means giving up something – roses or veggies or fruit trees.
    I think we will have to revive our old well-water system for irrigation. We went on City water about 12 years ago.

    The revenue the City will raise from the proposed rates is close to $40 million a year. This as nearly twice what it costs to fund the river project, via water revenue muni bonds or state loans, and to support the City system and needed upgrades. [ Most of the present 15 intermediate wells will be shut down with savings there.] So I feel proposed rates are too high and will do economic and environmental damage to Davis and environs.

    In years like this it is not clear we will receive much river water in the summer. As a geophysicist in my younger years I have been able to determine that the Tehama deep aquifer is huge in capacity and is [many-times-over] recharged from 3 feet of precipitation over 2 million acres in Tehama Co, where it is exposed, as well as from coastal range precipitation and run-off. Pumping tests tell us how fast recharge can be and that there is no connection to the intermediate aquifer which is high in nitrates and Selenium and higher in hardness. So we are very fortunate to have many years of supply to back up the river in an extended drought, as well as in normal years!

    1. Matt Williams

      Paul, the fact that the lots in Old Willowbank (and El Macero) are large and have considerable greenery is the result of a discretionary decision on the part of the owner. The costs of water to maintain the greenery is no different that putting oil in your car. The greenery and large lot size increases the capital value of the home. Why should you get increased value with no commensurate increased maintenance costs? Any decision you face with respect to roses or veggies or fruit trees should be a simple Return On Investment (ROI) calculation based on the impact of the removal of the roses or veggies or fruit trees on the capital (resale) value of your home. The water costs are the investment that will produce a return in the form of the avoided home value loss.

      Where did you get the $40 million a year revenue figure? As confirmed in the March 19, 2013 Public Hearing conducted by the Council, the maximum annual Revenue based on the fees in the Prop 218 notice is $25 million per year. Further, the current groundwater-only water distribution system costs in excess of $13 million per year, and that number needs to be increased by $37 million of Capital Maintenance costs identified by the System optimization Report performed by Kennedy/Jenks and Brown and Caldwell in 2011. $13 million plus $6 million ($37 million divided by 6 years) equals $19 million. The surface water project costs bring the total to $25 million, not $40 million.

      Shutting down the 15 intermediate wells will indeed save the variable costs (electricity for pumping and chemicals for water treatment) associated with those wells. The Bartle Wells Cost of Service Analysis calculated those electricity and chemicals costs as being only 20% of the total costs, with the remaining 80% being fixed costs. Shitting down the wells will not save any of the fixed costs, only the variable costs, and the water that used to come from those 15 wells will still be pumped and treated and consumed. it will just come from another place in the system, so the variable costs really won’t be saved, only redistributed.

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