Just when it seemed likely that the council would fold its efforts to put forward a Publicly Owned Utility (POU), Mayor Joe Krovoza and Mayor Pro Tem Dan Wolk stepped up with a strongly-worded defense of the public power initiative and a new way forward that clarified that, while the city has not made a decision to go forward, it needs to engage the public in renewed public outreach over the next year.
The council heard impassioned pleas from the public power and energy conservation community to stay the course and not lose this opportunity. In fact, of the public commenters, only one member of the public urged the council to pull back on the initiative.
Still, it seemed that the council had the votes to delay, shelve or otherwise kill the POU for the time being, with concerns about issues such as public outreach, bandwidth, and the loss of City Manager Steve Pinkerton.
The city explained that the $600,000 loan from wastewater “would be immediately repaid at that time financing for the proposed acquisition of electrical utility assets is secured.” The city stated, “If the city does not acquire the electrical utility assets, then repayment would be incremental not to exceed 10 years from the date the decision is made not to acquire the assets.”
The city added, “This is an investment opportunity for the Wastewater Fund. The loan would bear interest at a rate that is higher than the rate current received under the Local Agency Investment Fund (LAIF).”
It was Councilmember Brett Lee who led the way arguing against this initiative. “When we approved this not too long ago, we had a city manager, we had some other items that were not on our plate,” he said. “Our city manager has quit. He’s serving out the rest of his time here. We’re now in the process of trying to find an interim.”
This comment drew some chuckles and pushback from the council. He responded, “He quit. He’s serving out his contractual obligation. He left Davis to go somewhere else. He wasn’t asked to leave, he was gainfully employed here and decided to go somewhere else. He quit.”
“Several of you are running for office this June, your bandwidth is fairly full,” he continued. “We’ve also since the time we voted on this, decided to put a revenue measure for June. So I’m curious which of my colleagues have the time, energy and bandwidth to lead the effort on the ballot measures and which ones have the time, energy and bandwidth to lead the effort to lead on this public power pursuit?”
Councilmember Lucas Frerichs said that Councilmember Lee made a reasonable point about the hiring process and “the additional point about ongoing budget issues which we’ve made good efforts in addressing those budget issues thus far.”
“There is no question that there’s a promising future for a POU in this community,” he continued. “I strongly believe in the notion of public power. I think that we will get there, but I personally, I personally am in the position where we need to get to adjust the timing and sort of hit the pause button, not only hit the pause button but slow it down a bit.”
“The other part is the issue of the public outreach component,” he said, “these items get out in sort of dribs and drabs in terms of what we’re doing.” He would add, “There is a real need for community outreach on this item regardless of whether we pull all funding tonight or whether we move full steam.”
Rochelle Swanson would state, “I think there is a way to address both the concerns because sometimes a decision is made and we have a change of circumstances, that’s why we have representative democracy to be able to have some flexibility and take some responsibility.”
“We’re in a period in my mind of due diligence,” said Mayor Joe Krovoza, noting that the city has two outside reports who have noted that there is promise here from a sustainability perspective and from a monetary savings perspective. He said, “As council, I think we have a fiduciary duty to investigate that promise. I see us as embarked upon a one year or so, very methodical consideration of this question in as careful and deliberate a way as possible.”
“The decision on going forward as a POU has, in my mind, not been made,” he said. “I think that is where this council, and I will take responsibility, certainly didn’t do a good job of its messaging. I think it became communicated to the public that a decision had been made.”
Mayor Krovoza then responded to Brett Lee’s point, “We have so many huge issues going on in the city and I don’t think this is one where the councilmembers need to be the leaders or even should be the leaders.” He added that as he sees this as a gradual, year-long process, “I don’t think it’s one where we have to have one or two council leaders dedicating a large amount of time.”
He continued, “So to me unless the staff is pushing back on us saying we just don’t have the capacity, I’m not inclined to self-limit.” He added, “The best time to plant a tree was fifty years ago and the second best time to plant a tree is today.”
Brett Lee responded, “Steve (Pinkerton) has been a pretty strong advocate for this and has been providing a lot of the work behind of the scenes on this and so him leaving is definitely a loss and we have to be realistic on that.”
He added, “I also think the public outreach piece will perhaps be more challenging than we anticipate.” He noted that while we use the SMUD vote as a proxy for generalized support for public power in the community, “The SMUD vote was slightly different, it was who would you like to run your utility – PG&E or SMUD essentially. SMUD was going to do the heavy lifting in terms of coming up with the assets, in terms of acquiring the funds to do that.”
He expressed concern about getting caught up in a legal process prior to the city issuing bonds, “and if that happens, the city of Davis could lose a substantial amount of money. Or will have spent a substantial amount of money with nothing to show for it.” He added, “I think it’s important that we’re realistic to ourselves and also to the public. So this community outreach is not sort of the slam dunk that people think it will be.”
It is not just about like or dislike for PG&E, but also a recognition of the city’s current fiscal challenges.
Mayor Krovoza responded, “We’re borrowing $600,000 from ourselves which, in the worst case, we don’t go, we pay ourselves back $60,000 at a time at a rate of return. I think that it should be possible to communicate to the public that we’re going through a very gradual process of due diligence. We’re not making that go-no go decision right now.”
He then put a motion on the table to direct staff on March 25 to bring back a revised resolution “that clarifies that the city of Davis has not made a decision to go forward or not with a publicly owned utility, to emphasize that we are in at least a one-year period of careful evaluation of the public and private benefits to moving forward with a publicly owned utility or other options that help meet our cost-saving goals.” He added, “To include in that some consideration of the role of the local URAC [Utility Rate Advisory Committee]… and to clarify the important different stages of public outreach.”
Dan Wolk seconded it. “I think we do need to keep going on this,” the Mayor Pro Tem stated. “I think that the feasibility report presents a really compelling case for a POU. It’s hard to ignore that. I’m comfortable with that.”
He agreed with the need for community outreach prioritized above determining the fair market value of community assets. He added, “I think we really need to focus the public’s attention on the SB 43 process. This is a bill that we sponsored. This is a bill that would provide renewable energy for our community which is one of the main goals of the POU.”
“This is an issue that PG&E is fighting us on,” he said very pointedly and emphatically. “Very publicly fighting not just Davis but us and I think it’s critical that our community for all of these reasons get very attuned to what’s happening there.”
In the end, the council voted 5-0 to, as Mayor Pro Tem Wolk suggested, stay the course.
View the video below to see public comments:
—David M. Greenwald reporting