Ironically for critics of the council pushing the rate setting discussion to the Utility Rate Advisory Committee (URAC), they got exactly what they wanted when the body failed on three consecutive votes on various substitute motions to get majority support for any of the options.
The critical issue that divides the URAC is, frankly, the critical issue that will divide the council and possibly the community – the seeming tradeoff between social equity versus the need for revenue certainty and drought resilience. If this meeting was any reflection, these issues will not easily be resolved.
In the end, the URAC was unable to bridge this gap, despite efforts by Frank Loge to craft a motion that would have the council attempt to implement a rate that has an 87 variable charge and a 13 percent fixed charge, finding a way to create the cash reserve that Mark Northcross stated on Tuesday that council would need in order to get approval from bonding agencies.
However, Mr. Loge attempted to hedge the bets by having bonding agencies evaluate the plan in advance. Rate consultant Doug Dove echoed much of what Mr. Northcross stated on Tuesday – that the rates could work, but they would require a cash reserve and may result in higher interest rate charges.
Donna Lemongello, in a comment yesterday, explained how the process could work: “Initially [the $4 million reserve fund’s starting balance] could be borrowed from the Wastewater fund which according to Matt has $29 million in cash at the moment. If we use the same amount of water in 2015 as 2013 our structure will generate a $5.4 million surplus in that one year.” Ms. Lemongello’s idea was that the Wastewater fund could quickly be paid back the $4 million and then the reserve fund would be self sustained by water rate revenues.
Doug Dove would explain that the original CBFR protected against this revenue problem by having the six-month look back that would ensure that there was a fixed reserve of cash each year moving forward. So if revenue suddenly diminished, then the look back would supply the fixed portions of the charge. However, he stated that, while this worked in an extended drought situation for years 1 and 2 of the drought, a third year of a drought was problematic.
Sandwiched around Frank Loge’s motion were two motions that were similar to one another, one from Elaine Roberts Musser and one from Greg Clumpner. Both Ms. Musser and Mr. Clumpner were of similar minds for the need of a conventional 40% Fixed and 60% Variable rate structure, believing that the difference between 60-40 and 87-13 was not sufficient money to make a huge difference, but the need for revenue certainty was critical.
Ms. Musser pushed Option 3, a conventional with uniform tiers, and Option 1, a conventional with tiers, in her case breaking at 18 (rather than 10) ccf. Mr. Clumpner pushed 3, 1, 2 in that order. All of these were conventional, the only difference was tiering at 10, 18, or uniform tiers.
Both of those motions would fail 2-4-1. Ms. Musser and Mr. Clumpner were the only supporters of those motions.
Mr. Loge’s motion fared only slightly better, but he could not get a fourth vote, either from Richard McCann or Lorenzo Kristov.
In the end, Mr. Loge, Mr. Troost, and Mr. Bourne supported the 87-13. Ms. Musser and Mr. Clumpner supported a conventional structure. Richard McCann held out for a seasonal summer-winter rate, which he put forward as a substitute-substitute motion, but he could not get a second for that motion and it died as a result. Mr. Kristov abstained on all three votes. Some of the people who attended the meeting wondered if in abstaining all three times, Mr. Kristov wasn’t really saying that this was really a decision of the Council rather than a decision of the URAC.
While the members of URAC seemed to take their impasse all right, there was a conversation that followed the third failed vote. The conversation was led by Johannes Troost and, to a lesser extent, Frank Loge, that wanted to be sure that the voting that had just been completed was reflected in the minutes of the meeting, so that council would understand better both the concerns of URAC and the positions that had been advocated for and against during the motion and voting process.
This conversation actually dovetailed back to the meeting’s opening salvo where Mr. Niederberger refused to make an audio recording of the meeting despite the URAC members’ clear desire to have such a recording made. At the council meeting on Tuesday, Mr. Troost had expressed his concern at the lack of video or audio recording and the unavailability of minutes for the meeting. He argued strongly that there have been periodic misconceptions about direction given and discussion at these meetings that he believes these misconceptions are detrimental to the process.
As a point of comparison, the WAC was both audio and video recorded. In fact, the Vanguard made a very strong play for the meetings to be recorded – at that time over the objections of people like Chair Elaine Roberts Musser (she has chaired both the WAC and URAC).
During the discussion about recording the meeting last night, Frank Loge noted that members of the Measure P committee actually went back through the WAC meeting recordings to discover discrepancies between beliefs about what was stated and what was actually stated at particular meetings.
As the discussion with Mr. Niederberger of recording the meeting evolved to impasse, Mr. Troost moved to adjourn the meeting when Mr. Niederberger emphatically stated that the meeting would not be audio recorded for the purpose of minutes. Mr. Loge seconded Mr. Troot’s motion. The vote would fail 5-2, but the point was made.
Ironically, during last night’s discussions, the issue of accuracy came up at multiple points in time, when members were trying to reconstruct comments made by Mark Northcross on the viability of the Williams-Lemongello model. This happened when URAC Chair Musser departed from normal meeting protocol where the Chair waits for all the members to speak. She called on herself to make comment, and then selectively quoted only the beginning of the comments made by Mr. Northcross on Tuesday. Members of the public and some on the URAC members themselves noted that Mr. Northcross actually hedged his bet later in his remarks on Tuesday, stating that achieving fiscal resilience in the eyes of the financial markets might be possible after all.
There were also remarks that recollections from the WAC were recalled incorrectly, along with questions about Elaine Roberts Musser’s comments about the Williams-Lemongello model where she indicated that specific changes had been made to the model where no such changes had been made.
It was an evening that was full of drama, including a point in time where Chair Musser gavelled down Sue Greenwald for exceeding her 3 minute public comment time limit. The rapid fire sound of the gavel striking the block in one second intervals for close to a minute was so loud that the members of the Parks Commission meeting in the next room stuck their heads in the door of the URAC meeting room to see what all the commotion was.
Ultimately now, the council will be asked on Tuesday to act on a rate structure. They will have to wrestle with these precise issues – all the while, opponents are licking their chops at the possibility of running another opposition campaign against a 60-40 structure that quite clearly asks the lower user classes to subsidize higher usage classes.
—David M. Greenwald reporting