One of the more dangerous public policy moves is to make decisions based on assumptions and partial knowledge of the facts. One of the pieces of partial knowledge that appeared throughout both the URAC and council rate setting processes, following the passage of Measure P, is the assumption that the passage of Measure P was due a to rejection of CBFR. While I wouldn’t want to rule that assumption out as a possibility, an analysis of the numbers suggests a different possibility.
If you look at the results in March 2013 and compare them to the results in June 2014, you realize something very interesting. In March 2013, No on Measure I received 6802 votes. In June of 2014, Yes on Measure P received 7058. It doesn’t take a degree in higher math to see that nearly the same number of people voted for Measure P as voted against Measure I.
What changed drastically is the fact that the side supporting the water project fell from 8000 votes in March 2013 to just under 6800 in June 2014. Fewer people voted in the June primary as voted in a March 2013 special election (14,614 vs. 14,832 respectively overall, but only 13,829 of the 14,614 actually cast ballots for Measure P).
Just as earlier we laid blame for the parcel tax polling numbers on the lack of campaigning by the Measure O campaign, we lay the same blame here. In March 2013, the supporters of Measure I hired a political consultant, Will Arnold, as campaign manager, identified their likely voters and mounted a robust campaign. The result was that 1000 more people voted in the special election than voted in the Measure P election.
That is a point that just about everyone should keep in mind for a number of things, but for our purposes here, it illustrates the point that the reason the water rates went down is not necessarily CBFR – which Bob Dunning campaigned against for sixty days leading up to the Measure I election – but, rather, complacency on the part of the water supporters.
A week ago, we wrote that there was no way to stop the water train wreck. But we didn’t anticipate cooler and wiser heads prevailing. We believe that a deal of some sort was struck last week that enabled the council to put forward 87-13, which we believe was actually their preferred alternative all along, with assurances that they would not be opening themselves up to legal challenge.
This has been spun by some people in the community as a blackmail or nefarious deal, but again, we believe what happened is actually the opposite. We believe that the majority on council preferred 87-13 but feared a number of factors that got brought up: drought protection, bond ratings, and finally a lawsuit filed by Michael Harrington.
One by one, those issues were stripped away and, with some assurance that there would be no lawsuit, the council was willing to take the chance and pass a more equitable split in the water rates.
In public comment on Wednesday Don Price argued that fear of legal action was a red herring. He explained, “The only reason that the council has been plagued with legal action this past year is that people didn’t like the experimental rates that the city council voted for before. I can’t imagine anyone bringing any kind of legal action or challenge to an 87-13 rate.”
On January 15, 2013, there was a letter to the city clerk from Nancy and Don Price writing, “We believe that the current rate system, adopted in 2010, and the new proposed structure unfairly charge some classes of uses differently than others, are terribly confusing and, for the many reasons outlined in the documents submitted to the Water Advisory Commission, city files, and the City Council, the current and proposed rates otherwise do not conform to law.”
So Don Price, who was party to the YRAPUS suit against the city, publicly stated that he could not imagine anyone bringing legal action over an 87-13 rate. That does not preclude legal action, but it would certainly help discredit a future effort.
New Mayor Dan Wolk was instrumental in helping to frame this discussion and we believe reached some sort of an agreement with Mr. Harrington.
In his comments from the dais on Wednesday Mayor Wolk stated, “I think I have been motivated on two things. One is finding a fair and viable rate structure and the second is honestly trying to find a global solution to this water issue. I feel that an adoption of a rate structure 60-40 does not address really either of those. It doesn’t appease a large group of our community and I think there is a real fairness issue about that 40-60 rate.”
Contrary to assertions by some on the council and the URAC Chair, these are not experimental rates. Matt Williams did his homework to demonstrate this. 87-13 fits right in with the rate structures of a number of cities throughout California. San Francisco and Palo Alto are at 90-10, Arcata is at 87-13, Santa Rosa, Anaheim and Santa Ana are at 85-15, Santa Barbara, San Diego and Hayward are at 84-16, and Ventura is at 82-18.
Not only are there 10 examples of variable rates in the 80 to 90 percent range, but these are for the most part not small towns, these are major cities, some of them quite affluent, who all have large variable rate components. The idea that several million people live under these rates naturally takes some of the sting out from the notion that these are experimental.
Another key play was by someone who was not even at this meeting. At the previous meeting, outgoing Mayor Joe Krovoza dressed down Herb Niederberger for working contrary to the best interests of the city that employs him.
Mayor Krovoza told the utilities manager, “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 were, “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 [the motion by council member Lee to approve the 60-40 alternative]. 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.”
This was critical because it opened the door for the first time for real analysis to occur.
May Krovoza’s comments caused Herb Niederberger to state, “We used all the same assumptions (for the rate comparisons), it’s just the revenue split (that’s different).”
That was his way of reluctantly stating that the rate structures and the assumptions were all the same, the revenue split was the only difference.
Doug Dove deserves a lot of credit here because, while he clearly supported a 60-40 split, on Wednesday night he gave a <u>fair and honest</u> presentation of all of the rate structures, which both complemented and fleshed out the presentation that followed by Matt Williams on the equity and financial strength of all three alternatives, and ultimately council was armed with enough truly comparable information that they were comfortable that they could put this to rest.
The key is that, now, this issue is likely coming to a close, we have a fair rate structure that even the Yes On Measure P opposition seems willing to live with. Hopefully the city really can get the state revolving loans and Davis can focus on economic sustainability rather than this divisive water issue.
There still is considerable concern as to whether city staff, who has not only opposed an 87-13 rate but has openly attempted to sabotage it, will attempt to stop this from going forward to a Prop 218 measure, but for the most part it appears that the writing there is on the wall and that once the Prop 218 Notice is finalized, we can finally put this issue to bed.
—David M Greenwald reporting