Fact Check: Opt-Out Rates Overstated by Proponents of Measure P

water-rate-iconIn their argument for Measure P, Sue Greenwald and Mark Siegler in their op-ed last week argued, “The City Council has made the incorrect claim that two-thirds of people will be paying less under this new system (when compared to the equally unfair Bartle-Wells rates). This false claim relies on the assumption that big summer irrigators like the city, school district and some large-lot neighborhoods will pay massively more.

“The council knows, however, that these users are planning to opt out of irrigation by digging their own wells, further shifting the costs back to remaining ratepayers. Thus, most people actually will be paying far more since this opting out has not been adequately calculated into the current rate estimates.”

Sue Greenwald largely repeated this claim last Wednesday during her debate with Matt Williams.

“The city council has made the incorrect claim that two-thirds of the people will be paying less under this new system,” Sue Greenwald said. “It’s not true. It relies on the false claim that the big summer irrigators (the city and school district) will pay massively more. But they’re opting out.”

But are they indeed opting out? There was a story about a year ago where Village Homes was considering drilling a well to provide non-potable water for Parque Grande and the southern community vegetable gardens. However, the estimates are those two amenities account for just 20 percent of the association’s irrigating costs.

So even that endeavor would only reduce the Village Homes outdoor water use for the Homeowners Association, which would not include either residential homes or outdoors uses for the residential homes, by 20 percent or less than the conservation assumption tied into CBFR.

Moreover, it is not accurate to state that the school district is opting out either. On Thursday night, the Vanguard was informed that the district was looking to move to limited use of wells in some areas, however, they were not overall opting out of the system and would remain large water users.

According to Superintendent Winfred Roberson, there have been one-by-one discussions between the city and district staffs regarding a mutual interest in utilizing existing wells to water our joined turfs. He said, “The most practical location was at F street where the DHS and North Davis fields connect to the City park.”

He noted that, “This option has not been presented as a formal proposal to the District.”

The use of existing city wells is not going to take either the city or the school district off the grid. If you recall, the summer water supply is a bit different than the winter water supply. During peak use, specifically in the summer, the surface water will be combined with small amounts of groundwater to meet demands.

By relying on well water for irrigation, the city and other water users would be able to allow more of the summer water to be a higher quality surface water rather than ground water.

Bottom line is there do not seem to be plans for big users to get off the grid, which would result in the higher prices that Sue Greenwald warns about in her op-ed and her Measure P comments.

Looking at Measure P Proponents’ 40% Claim

Sue Greenwald and Mark Siegler argued, “Homeowners and tenants of single-family homes soon will be paying 40 percent more for each gallon of water than other residential users under the new water rates adopted by the City Council. Not only is this unfair, it ultimately will result in higher costs for most ratepayers and lead to adverse unintended consequences.”

They continue, “Residents of single-family homes will pay 40 percent more per gallon than other residential users, and far more than commercial users, for two reasons: 1) reliance on summer-month peak use to determine two-thirds of the bill year-round and 2) using meter size to determine a portion of the bill.”

Using that 40 percent term, they continue, “Mayor Joe Krovoza and the council claim that it is fair to charge the median homeowner 40 percent more for each gallon of water used because they say the cost of the surface water project is dictated by ‘peak’ summer use.”

The question is really how accurate is that 40 percent claim.

Matt Williams, however, argues, “As stated by Sue in her closing remarks the Yes On P claim that ‘Homeowners and tenants of single-family homes will be paying 40 percent more for each gallon of water than other residential users’ is calculated by taking the Median Single Family Home value ($4.281/ccf) and dividing it by the Median Multi-Family Home value ($3.639/ccf).”

He writes, “That calculation described by Sue only provides a 17.6% difference. The claimed 40% is actually calculated by dividing the Typical Family Home value from the Prop 218 Notice ($4.73) by the Small Apartment Building value from the Prop 218 Notice ($3.33).”

“An examination of the actual data for 2011 shows that the illustrative examples provided in the Notice overstate the 132 ccf per year Single Family Residence value and understate the 1,764 ccf per year Apartment, with the net result that even in the tortured comparison that Yes On P puts forward, the difference is only a 15.2% difference,” he concludes.

We would also be remiss if we don’t point out the obvious false assumptions in the next term: “Similarly, they argue that it is fair to charge one household less per gallon than its neighbor year-round if that household can afford an extended summer vacation.”

Here they are largely failing to recall why summer peak use is critical. The reason, of course, is the higher demand on the water system for irrigation and watering plants and gardens.

According to the city, outdoor water use accounts for 60 to 70 percent of all residential water use. So yes, someone who is able to afford extended summer vacations will be able to cut down on their indoor water use during those months, but unless they let their gardens and lawns die, they are not going to reduce their use by nearly as much as Sue Greenwald and company are arguing.

And, of course, whatever they manage to save on water during that time, they more than offset by the costs of their vacation.

—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. Matt Williams

    The graphic below gives readers and voters the provenance on the $ per ccc numbers David cites in his article. They are using the 2015 rates … the first year of CBFR.
    The discrepancy between the Yes on Measure P numbers prepared by Mark Siegler and argued by Sue Greenwald is that they use two hypothetical example water ratepayer accounts from the Prop 218 Notice. The $ per ccf values from the due diligence analysis above use actual data from 1,617 accounts that match the criteria. When one performs a due diligence analysis (as Yes on P has told the Davis voters they have done) it is important to maximize the confidence level of the data points used. The confidence level from over 1,600 real life data points (10% of all the accounts) is considerably higher than the confidence level from 2 accounts … especially when those 2 accounts contain hypothetical data rather than real data, as the 1,617 do.

    That leads one to ask, “Why didn’t the Yes on Measure P do any due diligence data analysis before they began spreading their gospel?”

    Rather than being “40% higher” as they claim:
    — the average $ per ccf at 132 ccf per year (the SFR hypothetical example) is 4.4% higher
    — the average $ per ccf at 150 ccf per year (the true SFR median usage) is 0.9% higher
    — the average $ per ccf at 508 ccf per year (the true MFR median usage) is 5.8% higher
    , and the average $ per ccf at 1,764 ccf per year (the small apartment hypothetical example) is 21.6% lower for the SFRs that have that volume than the MFRs that have that volume.

    Bottom-line, none of those calculations from data that is in the public record come anywhere close to the 40% more claim.

    Selecting a specific a data point to support an argument is easy. Doing due diligence when you are exposing the Davis ratepayers to tens of millions of dollars of default liability may be a bit harder, but it is the responsible thing to do.

  2. hpierce

    If anyone thinks that they can develop a new well [within the city limits], they do not understand the likelihood of finding decent (even non-potable) water at any given site in sufficient quantities to make a difference, the reliability of such a well, and the regulatory requirements by public health agencies. Any water from a private well would also have to be physically ‘isolated’ from the city’s water supply. Even using an existing well (like the one @ F and Fourteenth) would need to be isolated from the main system if it was used for irrigation (school and City only). Then the users of the well would have to be fully financially responsible for its maintenance, repair, energy costs and eventually, replacement.

    Thank you, Vanguard for exposing some non-sense from the Yes on P folks.

  3. Tia Will

    A different perspective onset another bit of non-sense from the Yes on P contingent.

    “Similarly, they argue that it is fair to charge one household less per gallon than its neighbor year-round if that household can afford an extended summer vacation.””

    As was noted earlier, the largest contributor to the water use of single family households will be yard and garden maintenance. The homeowner is unlikely to make the decision to let their yard die in their absence. This has already been noted. However, what I have not seen criticized is the mantle claimed by the Yes on P folks as the role of “champion of the little guy”. In a college town, I would like to point out that many, many of the students leave for the summer not to their vacation homes, but to their parents homes, thus not contributing to the summer water usage at all since they are gone. Their absence does not reflect one way or the other on the decision of their landlord to maintain the property.

    This is not an issue of the “affluent” vs the “non affluent ” regardless of how much the proponents of P would
    like to portray themselves as looking out for “the little guy”.

  4. Ryan Kelly

    Sue is engaging in repeating campaign “talking points” – say it over and over so people will eventually believing that is true. She doesn’t really engage in a discussion of facts. Thank you to Matt for his tireless work in informing us of the factual data even though reading his explanations makes my head hurt.

    1. Matt Williams

      LOL Ryan. Unfortunately with Sue, and lots of other people, you are only as good as your first mistake. So I dot my I’s and cross my T’s

  5. Pam Gunnell

    Fact Check: Here is the agenda item where the council discusses the city opting out for irrigation because the water rates for irrigators will be so high.

    The No on P campaign says the city is not opting out.

    http://city-council.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/20131217/05A-City-Water-Conservation-Plan.pdf top of page 5

    “With the identification of the new rate structure for water, staff has been looking for ways to
    mitigate the cost to the City’s general fund for water use. Another methodology included in the Integrated Water Resource Study was the
    conversion of existing city wells for parks irrigation to offset potential impact of future
    water bills”

    Opting Out Plan City Park Conversion To Intermediate Wells

    1. First conversion will be Well 11 for Community Park.
    2. Goal is to have this one complete by May 1, 2014.
    3. Other parks to pursue include Northstar and Walnut Park in 14/15.
    4. Arroyo, Playfields, and Mace in 16/17.
    5. Other parks identified will be post 2018.

  6. paul Brady

    City reports indicate that it and the schools will opt out. The reports indicate this will take 4-5 years as the money rolls in from the new higher rates. It need funds from the rate increases to pay for all the costs of connecting the parks and schools to the intermediate wells. Is it fair that this water should be free for the City? Ratepayers paid for these wells and pipes, etc. ; and who will operate and maintain these older wells?

    BTW: On average summer water will be about 50% river and 50% from the deep aquifer.

    1. Matt Williams

      Paul, there you go again. What City reports? Can you provide links? What School District reports? Can you provide links? Plus your BTW is pure conjecture on your part. What is your source? What links can corroborate your fantasies?

  7. hpierce

    It should be pointed out that the City and DJUSD, if they ‘opt out’, will still responsible to pay for the costs of producing the water, maintaining/repairing/replacing the wells used, accounting for those costs and distributing the costs. Not a “free ride”, but likely a lower rate, as they are not using going to be using the ‘surface water’. This doesn’t give me grief.

    1. Davis Progressive

      it’s not clear how much of a savings it will be. what i think the city wants is less strain on the surface water usage during the summer. there has to be an inducement there. will it be more than the 20% conservation assumption that the city has built in? only if the city is really stupid.

    2. paul Brady

      All those things you say are true. Water users paid for these wells, pumps and other infrastructure, as well as the power costs. And the City paid nothing for water all those years since metering and before. THey owe users much back-pay! However, the City reports on these conversions – see above by Gunnell and me – do not mention water costs to them, but mainly water costs to users to pay for the City to make these conversions. This is a pro-CC court, and the judge has to run for reelection, so the results of this case of the City not paying remain unknown, altho the facts are clear!

      1. Davis Progressive

        paul: whether or not the city paid nothing for the water, you’re basically suggesting that the city tax payer reimburse the city rate payers for the water costs, which probably washes out.

        1. paul Brady

          DP – they are different pockets – the Water Enterprise Fund and the General Fund.
          Yes, the total may be a wash as money flows to Water, but large users such as the schools and large irrigators would be net gainers if the water fund made refunds. The latter paid more because the City did not pay for its water use. Paul

          1. Matt Williams

            Paul, what evidence do you have that the City did not pay for its water use? You have no such evidence. Stop making unsubstantiated claims.

            In the process of working closely with Bartle Wells and Staff performing the underlying cost of service analysis for the rates, I know for a fact that the City General Fund transferred $450,701 of billing and administration services to the Water Enterprise Fund in the 2010/2011 Fiscal Year, and similar amounts each year before and after 2010/2011. In addition, a substantial proportion of the 26 well sites reside on General Fund property, and the Water Enterprise Fund credits a fair market site rental amount against the General Fund’s water bill for the General Fund facilities (buildings, parks, pools, etc.).

            Your throwing spit balls at the wall approach to water arguments is getting a bit old.

      2. Matt Williams

        so the results of this case of the City not paying remain unknown, altho the facts are clear!

        The facts are indeed clear … the City has indeed been paying for its water all along the way.

        1. paul Brady

          Matt – For the first time, water costs are – probably a line item – in the City’s General Fund budget. And the CC discussed that additional water costs could approach 2 million a year in 2018+ if nothing was done – such as the proposal to have the water users pay for switching to purely shallow or intermediate wells, now in place, for irrigation! Paul

          1. Matt Williams

            The reason for that is very straightforward Paul. Up until now the cost of water was so low that the amount owed by the Water Fund to the General Fund for services and rentals exceeded the amount owed by the General Fund to the Water Fund for water use. The cost of the services and rentals provided by the General Fund to the Water Fund is experiencing very modest annual price inflation consistent with the national CPI, but as we all know the cost of the water provided by the Water Fund to the Enterprise Fund is set to experience double digit annual inflation in the next four years. Thus the addition of the line item.

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