The staff report for Tuesday’s council meeting, the final council meeting prior to the election, includes an update of the URAC (Utility Rate Advisory Committee) discussions and recommendations on water rate design, but that information seems to omit any newly-revised rates and only includes a discussion of the May 8, 2014 URAC motion.
At its last meeting on May 8, 2014, the URAC approved a motion to instruct the rate consultant to compare the following three rate structures with the primary focus on quintiles for residential water use, with additional information. Those include a Bartle-Wells three tiered rate, a seasonal pricing utilizing winter/summer rates, and CBFR.
Staff notes, “All three of the rate designs would incorporate the favorable financial changes discussed during the April 22nd Council meeting: a) reduction in the project costs of the Davis Woodland Water Supply Project (DWWSP) and b) the reduced cost of financing Davis’ share of the DWWSP. Preliminary analyses of these changes were presented to Council on April 22nd and indicate that they could result in a reduction in the revenue requirements necessary to fund the project of up to 8%.”
URAC is scheduled to meet next on June 5 and staff will return to council to discuss further water rate actions on July 8, 2014.
However, that seems to go against the specific requests from two councilmembers. Lucas Frerichs specifically requested, on Tuesday, an item regarding water rates and the discussion of rates.
Brett Lee on Tuesday specifically wrote, “The ability to discuss the rates, the rate structure, and possibly requesting a new 218 process; pretty much the full monty.”
As Mr. Frerichs wrote to Bob Dunning, “As you can see by the emails below, Brett and I have each requested that a water rates item/discussion be agendized for next Tuesday’s Council meeting. We would like the opportunity to discuss, take action on the concerns being expressed by the community re the water rates. Time is of the essence.”
When we published on Thursday, it was believed at least three and probably four councilmembers agreed.
However, what has emerged is a much more limited discussion. As Herb Niederberg, the city’s General Manager for Utilities, Development and Operations wrote to Matt Williams, “The report is limited to the current URAC activity.”
He added that the Council is unaware of the revisions to CBFR and “this path is outside the scope of the direction the Council made to the URAC.”
The Vanguard on Thursday reported on a compromise CBFR that would eliminate the prior year look back, base the supply charge on 12 months of consumption, and reduce the fixed fee on single family residences from $19.68 down to $8.25 from the current model.
Matt Williams, in a comment early this morning, noted that “the real driving force behind this was not the naysayers, but rather a woman who is totally committed to achieving the best for the community … Donna Lemongello. Donna has been tenacious in pursuing a solution to the look-back issues caused by the high percentage of renters in Davis. That tenacity paid off when she came up with an idea that would allow ‘pay as you go’ and at the same time preserve the fiscal resilience that (along with social equity) is one of the cornerstones of CBFR.”
He noted, “Once it became clear to me that her idea was not only feasible but brilliant, then the two of us began to put it through some substantial due diligence using the historical usage database that Bartle Wells used to complete the rate study for the WAC. In the process of that due diligence the additional ‘tweaks’ that are central to this solution emerged.”
“The keys to this proposed solution are simplicity, understandability, fairness, responsiveness, and fiscal sustainability/resilience. It is clearly simpler than the current CBFR rate structure,” he added. “What can be simpler than I receive my bill, and pay it, and am done with it? It is easier to understand. No look back to determine what you pay for the Supply Charge. Your usage for the current month is billed at a $ per ccf rate, and that rate is fixed for each 12-month period. As the graph in David’s article shows, it is even fairer than the current structure because the percentages of total water use and total amount paid for each usage level are incredibly close.”
Mr. Williams added, “One of the criticisms of the current CBFR is that it impairs a consumer’s ability to reduce their bill immediately after taking water conservation steps. Because of the lookback they would need to wait 12 months before the bulk of the conservation savings would hit their bill.
“That problem is 100% gone if these proposed changes are adopted by City Council. Because of the inclusion of the pay as you go feature, if you reduce your water use through conservation this month, the results of that reduction will appear in both the Variable Use Fee and the Supply Charge on the very next bill. If consumers choose to conserve, they will not have to wait 12 months for their reward for achieving that conservation. With that said, let’s give credit where credit is due. Bob Dunning has been asking for that kind of improved responsiveness from the water rate structure for eighteen months. Throughout that 18-month period, Bob was saying ‘this is good policy’ and he was/is right.”
“All of the above is achieved while preserving the fiscal sustainability/resilience that has always been a central feature of CBFR,” he concluded. “One of the keys to the emergence of this proposed solutions is that it has been a collaborative effort … and another key is that there has been a lot of due diligence applied to it in order to ensure that it is an even better solution than the one we currently have.”
However, it appears with City Hall closed today and with Memorial Day on Monday, it would be difficult to amend the item to enable the council to hear about this new rate proposal prior to the election.
At 1:35 pm on Thursday, Mr. Williams and Ms. Lemongello attempted to submit their report as a “this Citizen Submission for Inclusion in the Staff Report for the water rates item on Tuesday’s Council Meeting.” At press time, there is no such submission.
—David M. Greenwald reporting