Contentious Hearing on Water Still Leaves Rate Options Unclear

water-rate-iconIt was contentious hearing, at various points along the way, on the water rates on Tuesday night. After hearing the staff report, Councilmember Brett Lee decided to attempt to end discussion of an 87-13 rate.

“I think we ought to clean up this mess before the new council is seated next week,” Brett Lee stated. “I think we all agree we should have some rates to replace the ones that have been rescinded. There’s a timeline issue.”

He stated that, while the URAC (Utility Rate Advisory Committee) has attempted to make recommendations for the council, “it’s too much time to compress” and “they need a little bit more time.” He said that they were put into place to perform checks and examinations on the rate structure, and “I don’t think they were constituted to do something as controversial as this.”

“I think it is enticing to want a customized rate structure for the city of Davis, I would share that view at some level,” he said, but if we rush to “find something cute and unique and be Davis, we’ll be in trouble.”

“At this point, I would like to have a very super vanilla rate,” he said. The advantage he said is that Bartle Wells has been legally vetted. In the long view, he said, we can always do a new Prop. 218, “we can do something that is the vanilla rate and we can give the URAC the time and the resources.”

He said that Matt Williams and Donna Lemongello have been working on the rate structure, but he said he cannot in good conscience support it when he doesn’t believe it has been fully vetted.

He wanted an outline for a Prop 218, for staff to come back with a proposal and to get fancy and cute six months down the line. He added that the URAC’s difficulties show “there’s not a clear cut best way to do it.”

Brett Lee proposed some form of the Bartle Wells with a uniform charge.

He said, “We got it wrong last time.” He then added, “I believe we got it wrong but we were set up to get it wrong because we were making the decision with a deadline. It wasn’t really clear how this cute, elegant solution was going to be deliberated.”

Brett Lee moved that staff come back with a proposal based on Bartle Wells rates with a 40 percent, and potentially a 30 percent fixed, with a uniform block rate. Councilmember Lucas Frerichs seconded it.

Earlier in the meeting, Mayor Krovoza took issue with the staff reporting of the rates at several points in time. At one point he stated, “Staff is giving their version again of what they want approved, as opposed to a summary of the different options.”

He would come back to this concern later. He said, “I would like to ask if staff has worked with Williams and Lemongello to understand the rate resiliency of their proposal.”

Herb Niederberger answered in the affirmative, “One of the reasons that it generates such a surplus is they have a different starting point.”

Mayor Krovoza responded, “That’s not my question.”

Mr. Niederberger stated, “Yes we understand the rate resiliency of the Williams-Lemongello.”

Mayor Krovoza stated again, “That wasn’t my question. My question was has staff worked with Williams and Lemongello to understand the rate resiliency and worked with them on the question?”

He questioned him harder, “You’ve worked with them?”

Mr. Niederberger answered that Matt Williams furnished them with the rate resiliency and presented it to the URAC.

“And you consider it not rate resilient,” the mayor continued?

“Again they have a different starting point,” Mr. Niederberger responded. “They put a conservation number in year one, whereas all the other conservation numbers were based over time.”

But Mayor Krovoza disagreed. “Everything I have heard, you have not worked with them to try to make it rate resilient. Everything I have heard is they have an idea, an idea I believe that matches our community’s values so much better and for weeks and weeks they’ve been stonewalled in being able to work with quality staff to figure out if they can make it workable.”

He argued that at this meeting they once again received the staff’s 60-40 presentation and “in my mind not getting a good faith effort to see if this rate structure could work for us.”

“I am terribly disappointed, I think that this is decision making at almost its very very worst at this point in time,” he said. “I am not going to support this. We are moving forward toward a rate structure that is less conservation oriented than we have at this point in time.”

He would add that we are only at this point because staff has stonewalled for months and “it is absolutely equitably unfair and even unconscionable.” He added, “This a huge step backwards for this city.”

Mayor Pro Tem Dan Wolk argued against the motion, noting that while he thought there was a lot to the conventional rate model, “I’m just hesitant to foreclose looking at these other options.”

Mr. Wolk suggested that Measure P’s passage wasn’t about adopting a conventional model, a lot of it was about adopting a uniform rate model.

Mayor Joe Krovoza suggested a friendly amendment to allow Matt Williams and Donna Lemongello to sit down with Doug Dove and Mark Northcross to go over rate resiliency and see if they can reach an agreement.

While Lucas Frerichs was willing to accept that, Brett Lee, the motion maker, was not. He stated, “I’m not willing to accept that. I want to stick with a tried and true rate. This doesn’t preclude Williams and Lemongello from moving forward… it simply gives them more time to work out the bugs.” He added, “I’m not ready to go with an experimental rate program for Davis. I would have thought we would have learned our lesson by now.”

Mayor Krovoza stated, “I don’t agree with your premise that it’s an experimental rate structure.”

There was a lot of back and forth between Councilmember Lee and Mayor Krovoza. The mayor pointed out that the URAC did not support a 60-40 rate. Councilmember Lee pointed out that Williams and Lemongello showed where the traditional rate structure was weak.

Councilmember Frerichs made a substitute motion to consider Williams and Lemongello.

“Why are we doing this? Why are we prolonging the misery here? Staff time’s valuable, our time’s valuable, we have other things we need to be doing,” Councilmember Lee quipped. “Three of us up here are not planning to vote for such a rate structure, so why are we prolonging this?”

Herb Niederberger jumped in with an alternative. He said, “I think I can come up with a compromise that meets everyone’s intent. Let us evaluate a fixed at 13 and a variable at 87. But quit calling it Williams-Lemongello because I’ve already identified problems with their cost of service analysis. Have Bartle Wells plug it into their model because they can change the different components.”

He said staff can come back, he hopes within a week, with the 60-40, 70-30, 87-13 with Bartle Wells running the rate model. “We can come up with a comparison of those three,” he said.

Council was willing to take up that alternative, with Lucas Frerichs making the motion and Rochelle Swanson seconding the motion.

Earlier in the discussion, there was also contention. URAC member Johannes Troost had asked during the URAC meeting – supported by his fellow members – that the votes on the rate structures be presented to council. Herb Niederberger merely told council, “The URAC did not reach a decision on any rate structure to forward to council.”

Mr. Troost took exception to this, stating, “We had requested that he give you, in this report – specifically – we voted on it – he was supposed to report that tonight.”

When he asked for the numbers, Mr. Niederberger stated, “They’re in the staff report.”

Mayor Krovoza jumped in and stated, “I want them reported.”

“We had asked for that and this is a consistent issue that we’re running into with this committee, with staff not following requests or direction from you or requests from us,” Mr. Troost continued. “It’s very frustrating.”

Next week, Herb Niederberger will bring forth sample Prop 218s for the three breakdowns of rates and the new council will deliberate.

—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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8 Comments

  1. Michael Harrington

    Fascinating. We are looking forward to seeing what the City Council does with this next week.

    Never a dull moment in Davisville.

    I still think they don’t need to charge ahead so fast, and that the October 1 deadline for rates is artificial, is being jammed down the throats of CC members by the same staff that set up this rates mess to begin with, and the rush is likely to make more controversy with a poor product in the end. I’ve said this since August 2011, and here we are again: an artificial deadline jamming through a complex issue.

    Dear Mayor: thank you for calling the Public Utilities Manager out for his errors; he acts like he has nothing but contempt for his employer. Those URAC meetings have to be recorded. And staff should work with Matt and Donna, two hard-working citizen volunteers.

  2. Ryan Kelly

    “But quit calling it Williams-Lemongello because I’ve already identified problems with their cost of service analysis. Have Bartle Wells plug it into their model because they can change the different components.””

    I wonder if it is important that the rates have the name Bartle Wells attached? It was such a curious comment.

    A 15% fixed and 87% variable is better for low water users and more equitable for large users. It also allows for people to see a real advantage for conservation at all levels of use and it addresses all the issues that Measure P raised.

    This whole process is messy for many reasons. The finger-pointing needs to stop. It is so tiresome and unimportant. We have a timeline. Let’s keep to that timeline. This timeline has the first billing on the rates starting in Dec. 2015. We don’t want to be still talking about the rates into 2016.

    1. dlemongello

      What is really UNFORTUNATE is that what I essentially begged, on June 17th (or was it the 10th?), for the Council to have done, an analysis for the comparison of all the water rate structures side by side, will most likely never happen. As I said that night, if we had that, and if the URAC had had that, the decision would have been made much easier. The decision could have then simply moved to differences of opinion on policy and how these structures fit into policy. We were never allowed to combine all the information into a comparable, accurate and consistent format to simply make these numerical graphic comparisons. Instead what we got was a presentation by the consultant to council and to us citizens, of incorrect, misleading and therefore meaningless graphs, that cost money for the consultant to make. Anyone who thinks for just a moment realizes how senseless and frustrating that scenario really is.

  3. Mr. Toad

    Going slow costs the city $200,000 a month because of P. Time is of the essence. Of course since you think layoffs and pay cuts are the answer I’m sure you’re fine with that.

  4. SODA

    Good coverage David but believe Mr Troost also expressed concern that the negative staff report on 87/13 had never been presented to the URAC nor Mr Dove’s negative reaction to it.
    We will all miss Joe’s sincere assessment of community values and historical perspective along with his absence of pandering.

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