Yesterday’s completion of the ballot count formalizes what was believed previously: Measure P has prevailed. The question is what happens next and the answer is not clear.
Last week, the City’s General Manager of Utilities Herb Niederberger backed off more doomsday predictions and told the URAC that he was told as recently as Thursday morning that, as long as the city has rates in place with no pending legal challenge by October 1, the city would get low interest loans from the State Revolving Fund through the Clean Water Act.
The timetable is narrow and tonight the URAC will work toward completing a rate comparison chart to assist the council in weighing their options. There will be a brief discussion next week at what was previously scheduled as a parcel tax workshop before the council makes their final decision on rates on June 24, a week before the July 1 deadline.
The emerging consensus, whether it is accurate or not, is another story – that the Measure P vote was a rejection of CBFR rather than the higher rates overall. One councilmember told the Vanguard that the inclination may be something similar to the Lemongello-Williams model without the CBFR name – relatively low fixed rates with the rest being variable.
City staff has expressed concerns for such a formula. In an email, Mr. Niederberger noted that the proposed Lemongello-Williams modifications “effectively transform CBFR into a conventional water rate design with a fixed component of $8.25/month (3/4-inch meter) and two variable rate tiers, 0-20 ccf/mo @ $4.34/ccf & >20ccf/mo @ $5.74/ccf.”
“This results in the fixed component of the water bill generating approximately 13% of the total revenue and about 87% of the total revenue relying upon consumption. While this is a very conservation based rate, it is also a recipe for disaster,” he writes.
He states, “Even minor fluctuations from historical demand result in catastrophic losses in revenue.” He adds, “Staff would never recommend such a structure to City Council.”
While council will have to sort out the rates issue very quickly, Michael Harrington has his own ideas as to how the process ought to work.
In an email to legal staff on Tuesday, Mr. Harrington wrote to Harriet Steiner, “I think there is a possibility that the City acted outside of its legal and voting authority of Measure I when the City signed the JPA/Woodland/C2m Hill contracts to build the plant.”
He added, “If so, I don’t think the city will get stuck with the tab, since the other signing parties knew about the ‘subject to’ clause and the YRAPUS litigation and the pending initiative that I drafted and qualified and put on the ballot, aka Measure P.”
He writes, “The City did not have to put Measure I on the ballot, but once it did, the City is firmly bound by the language that the City drafted.”
In a Wednesday email to the city council, Mr. Harrington wrote, “As you probably know, County Elections just posted the final results, and P passed 51% to 49% percent. It’s a great win for the ratepayers. We will have a formal communication soon, but in the meantime I know you are all planning on how to proceed with new rates.”
He added, “We want the City to know that the new rates simply have to be on a citywide vote ballot, as an advisory measure. If it passes, and it should if the rates are greatly improved in Version 3.0, then the City can run the Prop 218 process with no hindrance.”
He argued, “The voters have twice said they want to vote on the rates, and we have to honor that for the third try at rates. The most likely ballot for this could be November, but I am sure you are having many discussions as to new revenue measures, too.”
“My understanding is that the old rates go into effect ten days after when the election is declared, which should be this Friday, or does the CC have to put it on the agenda for CC approval?” he continues. “We appreciate that the CC really wants to try a fast Prop 218 process and slam in some new rates, but we ask for your patience so there is a public process that all can get behind.”
The city has not formally discussed the possibility of putting the rates on the ballot, however, at least one councilmember dismissed the notion and indicated that Mr. Harrington could collect signatures if he were so inclined.
Tonight’s URAC meeting, and council meetings on June 17 and June 24, should clarify where things are headed.
—David M. Greenwald reporting