Newspapers around the Golden State have focused on this seeming contradiction.

This story is from this week’s Orange County Register:

It’s a conundrum statewide: Officials demand that people conserve water. People respond, and water use goes down. But less water sold means less money flowing into public coffers, so prices rise to make up for lost revenue.

 

Folks feel that they’re being punished for conserving. But what else can the water agencies do to cover fixed costs, which don’t fluctuate like the rain? …

 

Southern California cities and water districts are selling less water now than they did back in 2003, but are bringing in much more money nonetheless, a Register analysis found. Rising rates are an integral part of that equation … . The cost of water has doubled and rates at most agencies have risen in recent years, and is expected to rise even more.

‘The financial logic is inexorable’

Last week saw a similar piece in the San Diego Union-Tribune:

Whenever drought hits, Californians invariably do their part to save water. They cut back on watering lawns, shorten showers and fix leaks.

 

This conservation ethic has taken hold quickly during the current drought. Ratepayers in San Diego County and elsewhere in the state are meeting or often significantly exceeding their state-mandated reduction.

 

Now for the unpleasant but predictable sequel. As water use goes down, the rates charged are going up. And many of those good citizens, who are dutifully pitching in for the public good, are outraged. But the retail water agencies, who directly supply residential, business and agricultural customers, say they have little choice.

 

The financial logic is inexorable. If you sell less of something, to balance the budget you must either cut costs, raise the price, or a combination of both, the agencies say.

The Los Angeles Times also reported on sharply rising rates in areas served by the L.A. Department of Water and Power, but without the context of recent conservation drives.

Agencies ‘uncomfortable’ with conservation

David Sedlak, a professor of civil engineering at UC Berkeley and a water infrastructure expert, suggested this issue is a little bit more complicated in an op-ed for the San Francisco Chronicle:

Water utilities have an uncomfortable relationship with conservation. They prefer that we consumers gradually reduce per capita water use as our region’s population grows so they don’t have to make costly investments in new supplies. When we abruptly start cutting water use during a drought, the utilities fear the resulting plunge in their revenue. They have good reason to worry: During the last drought, the Los Angeles Department of Water and Power had to lay off workers when it experienced a $70 million revenue shortfall after customers answered the city’s call for conservation by decreasing water use by 30 percent.

 

Some of the blame for the misconception about the relationship between water consumption and the cost of providing water lies with how we are billed for water. To incentivize conservation, California’s utilities have created complex billing schemes in which rates go up when consumers use more than a reasonable baseline allocation of water. This is an effective way of rewarding conservation and making life a little easier for low-income families, but it feeds into the mistaken idea that water is a commodity rather than a fixed-price service.

But to consumers shocked by higher bills, just about any justification is likely to produce a sharp response or be dismissed as double-talk. Here’s how San Diego resident John Oliver responded to a Union-Tribune story about conservation forcing higher costs:

“And this is yet another reason why I refuse to cut my use below the level I want to use water at,” he wrote on Facebook. “Anyone who falls for this ‘There’s a drought, it’s terrible, we all have to do our part, but not the smelt or the almond farmers or the developers or the poor or the sick or the elderly or the illegal aliens’ nonsense is a fool.”

It must sound crazy in the middle of an epic California drought to say empirical studies show raising water rates to spur water conservation is not likely to result in water conservation.

But a study by CalWatchdog.com of comparable water rates in Orange County indicates tiered water rates do not clearly result in demonstrably lower water usage. Similar studies in other states show the same thing.

The prevailing notion by water experts is that raising water rates increases conservation. For example, the Pacific Institute is dedicated to “sustainable communities.” A recent Need to Know fact sheet, made in a partnership with the Alliance for Water Efficiency, explained:

“Conservation pricing provides a price signal to customers to use water efficiently, and can be achieved through a variety of volumetric rate structures,” including “Tiered rates in which the volumetric rate increases as the quantity used increases.”

Tiered rates increase the cost of water with higher usage.

Higher rates — higher usage

A recent study of long-term water rates, “Urban Water Demand and Water Rates Structure Over Decades,” of the huge Edwards Aquifer in Texas, found charging more for water usage ironically resulted in higher water use over several decades:

“The adoption of water pricing structures alleged to promote water conservation (e.g., increasing block rates) does not lead to expected results as in our sample (13,447 observations) consumption increased by 5-6 percent (significant at the 1 percent level) after the change occurred… . The “more water conserving” … exert(s) a counterproductive effect and correspond(s) with higher average daily water consumption.”

Orange County

Different water rate methods in Orange County, Calif. also indicate that tiered water rates do not produce greater water conservation.

Let’s look at water rates and usage in three cities in Orange County with similar coastal climates: Tustin, Costa Mesa and Huntington Beach.

                    Comparison Water Usage by City: Tiered and Flat Water Rates

                                 Ranked by Water Use Per Person Per Day

Tustin, with tiered rates, uses 115 gallons of water per person per day.

By contrast, the Mesa Water District (Costa Mesa) and Huntington Beach, with flat water rates, use 95 and 88 gallons per person per day, respectively.

Lower water use should result in a higher proportion of apartment units (which typically use less water).

Higher water usage should result from a higher percentage of cheap groundwater used (lower prices may induce higher use).

And higher water usage should result from a higher number of persons served per water meter hookup (from master metered apartment buildings).

Yet, considering all these factors, there is no clear evidence that tiered water rates conserve water.

Service or commodity?

At the core of the question of whether pegging higher water rates to greater use saves water is whether water is a service or a scarce commodity.

Those water districts that use punitive tiered water rates justify their higher rates by marketing their water-rate policy as bringing greater water conservation of a scarce commodity. Conservation is used as a marketing strategy to raise water rates, not necessarily as a real way to save water. A study by the UCLA Anderson School of Management in 2010 found that water conservation was due to social norms, not water rates.

Conversely, those water districts that use flat water rates tend to see themselves as providing a basic service at the lowest cost possible.

On Tuesday, election officials certified that the petition drive spearheaded by former Fresno County Supervisor Doug Vagim has enough valid signatures to place the referendum on the November ballot. More than 5,500 registered voters signed the petition, which was circulated by Citizens for Lower Water Bills, to repeal rate hikes approved by the City Council in August 2013.

“We’ve got the people behind us,” Vagim told the Fresno Bee. “They’re ready to have their voices heard.”

But the fight is far from over, and the petition certification now puts the onus on the City Council to address the issue at its next meeting scheduled for July 17.

Will city play more games?

The City Council could avoid an election by voting to rescind the higher rates, or it could follow the will of residents and place Measure W on the November ballot. The biggest question: Will the city play more games and continue to thwart the will of the people?

As CalWatchdog.com previously reported, the city of Fresno has gone to great lengths to block the referendum from reaching the ballot. When the taxpayers tried to circulate a petition to overturn the mayor’s plan, the city took the extraordinary step of refusing to grant the petition a title and summary. Without a title and summary, the group couldn’t collect the necessary signatures to get a referendum on the ballot.

Not content to block the initiative, the city went a step further — it sued the taxpayers. Eleven judges have disagreed with the city’s frivolous lawsuits, which have cost taxpayers nearly a quarter of a million dollars.

City could delay or decrease rate hikes

That history of bully tactics and obstruction has taxpayers fearing more gamesmanship from the city.

It’s within the city’s authority to refer the initiative to city staff for further study and to report back to the council within 30 days. That would, in the process, cause the referendum to miss the August 8 deadline for placing measures on the November ballot. The referendum would then be up for the June 2016 election, or an earlier special election.

In addition to this delay tactic, another option floated by Councilman Lee Brand would be to approve a 5 or 10 percent reduction in the water rate increases.

Vagim says a slight reduction is dead in the water. “It’s not legal,” he told CalWatchdog.com. “The people signed a petition that stated ‘Repeal’ water rates — not reduce them.”

City: “Not about Doug Vagim’s ability to collect signatures”

A spokesman for the city said that the water rate increases are vital to Fresno’s future.

“This is about Fresno’s future, not about Doug Vagim’s ability to collect signatures,” said city spokesman Mark Standriff. “The city of Fresno is looking forward to answering the real question posed by this measure – and that’s whether or not our citizens support the city’s plan to improve our water infrastructure, replenish our dwindling water supply, and provide safe, clean, reliable water for everyone.”

Mayor Ashley Swearengin, a vocal proponent of the water rate hikes, said the rate increase on 134,000 water customers is necessary to fund a $410 million upgrade to the city’s water system. According to the Fresno Bee, “The typical monthly home water bill could (based on consumption) go from $24.49 at the time to $48.34 by mid-2016.”

Swearengin is running for state controller in November.

Vagim’s group shifting public opinion

Vagim’s group collected 715 more signatures than they needed to qualify the measure for the ballot. In the process, they’ve also shifted public opinion on the water rate hikes. The Fresno Bee editorial board, which previously backed the water rate hikes, is now having second thoughts.

“City Hall might have reached too far with the size of these rate increases,” the Bee editorialized. “Though some households can easily absorb them — or afford to invest in water-saving technologies — many households will have to spend less on such things as groceries, clothing and transportation to pay their water bills.”

The paper concluded, “We suggest that the City Council take a hard look at reducing the increases. This can be done by trimming the cost of the new water-treatment plant and scaling back or even delaying some of the other improvements.”

This morning, shortly after 10:30 a.m., the group Citizens of Lower Water Bills — Yes on Measure W will turn in thousands of signed petitions — nearly four weeks before the deadline — calling for a public vote to overturn the city’s controversial water rate hikes.

“It feels great to have the support from fellow citizens as we move forward in our attempt to get on the Nov. 2014 ballot,” said former Fresno County Supervisor Doug Vagim, who spoke exclusively with CalWatchdog.com. “The city did everything they could to prevent us from our goal but in the end we will prevail.”

City of Fresno: Rate hike needed to fund aging water system

As CalWatchdog.com has previously reported, the battle in Fresno over municipal water rates has become a much larger fight over citizens’ rights to petition their government. Last August, the city of Fresno approved a controversial plan pushed by Republican Mayor Ashley Swearengin to raise the city’s water rates. The additional revenue was intended to go toward a $410 million upgrade to the city’s aging water system.

Under Swearengin’s plan, most water users, including city residents and some unincorporated parts of Fresno County, would see their average monthly bills rise to $48, double what they were last year. That didn’t sit well with a group of taxpayers, led by Vagim, who mobilized a grassroots effort to overturn the rate hikes.

But when the taxpayers tried to circulate a petition to overturn the mayor’s plan, the city took the extraordinary step of refusing to grant the petition a title and summary. Without a title and summary, the group couldn’t collect the necessary signatures to get a referendum on the ballot. The move appeared to be a direct violation of the California Constitution. Section 3 of Article 13C states that “the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.”

Then, the city sued the taxpayers to preventtheir initiative from entering circulation. The city says that action was necessary in order to fulfill its “legal obligation to supply a service.” In the city’s opinion, the rate hikes are “necessary to pay for that service (and) are not subject to initiative.”

But court after court disagreed with the city’s argument. On April 28, Superior Court Judge M. Bruce Smith reaffirmed his preliminary ruling granting Citizens of Lower Water Bills — Yes on Measure W the right to move forward with their referendum on the city’s controversial water rate hikes.

“Even after the most extraordinary and unreal battle the City of Fresno caused through the courts, the citizens of this community have shown their resilience to all the obstructive tactics by Fresno city leaders,” Vagim said.

‘The most extraordinary and unreal battle’

Although Vagim’s group is celebrating their signature-gathering achievement, they’re still expecting a fight from city leaders.

“We still have to get past a city council and mayor who basically continue to thumb their noses at us, treating us as bunch of disobedient numskulls,” Vagim said. “We’ll need all the support we can get in order to get our city leaders to take their choke hold from our throats.”

More than a quarter million dollars in taxpayer funds has been spent by the city of Fresno in its ongoing lawsuits to keep the water rate referendum off the ballot. As of May 6, the city had spent $232,254.28 to sue Citizens of Lower Water Bills — Yes on Measure W. The figure was obtained through a public records request filed for all city funds expended to date in Doug Vagim vs. City of Fresno and City of Fresno vs. Doug Vagim.

Even supporters of the water rate hike have become disgusted with the city’s hardball tactics. Shortly after the first ruling, the Fresno Bee editorial board, which backs the water rate increases, chastised Swearengin for her involvement in the political games.

“We support the water-rate increases; they are vital to the city’s future,” the paper wrote. “But with these stalling and blocking tactics, Swearengin sends a message that she doesn’t trust Fresno voters to do what’s best for the city.”

Swearengin now is running for state controller.

But for some on the right — and for lots of people who believe in direct democracy — that probably would be fine by them. Regular CWD contributor John Hrabe explains what drives the phenomenon in which Swearengin’s biggest detractors come from what should be her base:

“The battle over Fresno’s water rates began last August, when the city approved a plan supported by Mayor Ashley Swearengin to increase the average water bill to $48 per month. The city says that the additional revenue is needed for a $410 million upgrade to the city’s aging water system. But, some residents of the city and unincorporated parts of Fresno County balked at the prospect of higher water bills, which are expected to double by 2016.

“When taxpayers attempted to circulate a petition to overturn the plan, the City of Fresno denied the taxpayers a title and summary for their referendum. Then, the city sued the taxpayers to prevent their initiative from entering circulation. The move appeared to be a direct violation of the California Constitution. Section 3 of Article 13C states that ‘the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.’

“The city says that the lawsuits were necessary in order to fulfill its obligation to deliver an essential public service to residents. … Yet, 11 judges have disagreed with the city’s arguments in the case. Most recently, the California Supreme Court denied the city’s petition for review of a 5th District Court of Appeals ruling, which held that the city has a legal obligationto issue a petition title and summary.”

Not up to task of persuading Fresno residents?

On this issue, I started out thinking Swearengin was dead wrong. But the more I think about it, the more I understand the peril of having a state in which citizens can vote on their utility rates. Of course that’s likely to lead to chaos.

But, I’m sorry, Swearengin is still dead wrong. Whatever the circumstances, an elected leader shouldn’t defy clearly written state laws, as she did. Instead, you make your case to voters.

Swearengin chose dirty pool over taking the high road. She either …

A) … didn’t think the voters she would have to convince were bright enough to understand that utilities which have fixed bills and obligations aren’t the same as local governments which often tolerate bad status quos because of political influence or an acceptance of incompetence; or …

B) …. didn’t think she was enough of a leader to win over voters to the logic of her argument.

I am slightly more understanding of why Swearingen did what she did than I used to be. I also think her critics on the right need to cogitate more on the difference between utilities and local governments.

But ultimately I think the liberal Fresno Bee editorial page pretty much nailed the right way to characterize the Fresno mayor’s actions back in November:

“We support the water-rate increases; they are vital to the city’s future. But with these stalling and blocking tactics, Swearengin sends a message that she doesn’t trust Fresno voters to do what’s best for the city.”

She also doesn’t seem to trust her own competence at a politician’s most basic skill: the ability to win over people who disagree with you.

On April 28, Superior Court Judge M. Bruce Smith reaffirmed his preliminary ruling granting the “Citizens of Lower Water Bills — Yes on Measure W” the right to move forward with their referendum on the city’s controversial water rate hikes. The ruling clears the final pre-election hurdle for the group of taxpayers, although it could still be appealed to the California Supreme Court.

Last year, the City of Fresno denied the taxpayers a title and summary for their petition, and then sued the taxpayers to prevent their initiative from being circulated. The move appeared to be a direct violation of the California Constitution. Section 3 of Article 13C states that “the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.”

Pre-emptive strike: City sues taxpayers

The Superior Court ruled against the city.

“Measure W moves on as we complete our gathering of signatures,” said former Fresno County Supervisor Doug Vagim, the leader of the taxpayer group and a named party in the case. “It’s estimated the City’s lawsuit will cost the taxpayers of this community over a third of a million dollars, and to date they have lost at every court, Superior and Appellate. Their next step is the California Supreme Court.”

To qualify their referendum for the regularly scheduled November 2014 election, taxpayers would need to submit 4,846 valid signatures to the City Clerk by May 8.

Petition circulation time cut short

Opponents of the water rate increase say that the protracted legal battle was little more than a stalling tactic to make it more difficult for them to collect the necessary signatures.

“As a result we were provided a window of only 10 weeks from the normal time of 26 weeks to circulate our petition and make the Nov. 2014 election cycle,” Vagim said.

Even supporters of the water rate hike have become disgusted with the city’s hardball tactics. Shortly after the first ruling, the Fresno Bee editorial board, which backs the water rate increases, chastised Mayor Ashley Swearengin for her involvement in the political games.

“We support the water-rate increases; they are vital to the city’s future,” the paper wrote. “But with these stalling and blocking tactics, Swearengin sends a message that she doesn’t trust Fresno voters to do what’s best for the city.”

Tactics backfired — both parties oppose water rate hikes

Yet, the city’s hardball tactics appear to have backfired and united the public against the water rate hikes. In April, Vagim and his fellow taxpayers convinced the local Democratic and Republican central committees to support putting the issue on the ballot.

“Democrats and Republicans don’t often see things the same way,” the Fresno Bee’s City Beat columnist George Hostetter noted. “But both have embraced Vagim.”

Vagim downplays the achievement of bringing Republicans and Democrats together in opposition to the city’s lawsuit.

“Remember, the City of Fresno sued its own citizens in an attempt to stop them from exercising their franchise of the initiative guaranteed by the California Constitution,” he said.

City of Fresno: Rate hike needed to fund aging water system

As CalWatchdog.com has previously reported, the battle began last August, when the city of Fresno approved a controversial plan pushed by Swearengin to raise the city’s water rates. The additional revenue was intended to go toward a $410 million upgrade to the city’s aging water system.

Under Swearengin’s plan, most water users, including city residents and some unincorporated parts of Fresno County, would see their average monthly bills rise to $48, double what they were last year. That didn’t sit well with a group of taxpayers, led by Vagim, who mobilized a grassroots effort to overturn the rate hikes.

But when the taxpayers tried to circulate a petition to overturn the mayor’s plan, the city took the extraordinary step of refusing to grant the petition a title and summary. Without a title and summary, the group couldn’t collect the necessary signatures to get a referendum on the ballot.

In January, the city complied with a court order and issued a ballot title and summary that allowed taxpayers to circulate their petition. The case is City of Fresno v. Doug Vagim.

Budgeting, at least at the local and state level, where spending plans have to be balanced, is literally a zero-sum game. Yet it is inexplicably rare for a California journalist to note that political influence is driving compensation and regulatory decisions and to then link these decisions to this result: that there is less money available for the broader good or for the needy.

In Saturday’s Los Angeles Times, liberal pundit Steve Lopez offered strong proof that he had been mugged by reality and had figured out this dynamic. The topic: the city’s Department of Water and Power, which is every bit as out of control as the Metropolitan Water District of Southern California with its employee-first priorities.

Lopez notes that Angelenos’ water and power …

“… rates wouldn’t be going up as much if DWP employees joined the rest of the world and contributed, out of pocket, toward their healthcare premiums. The new deal does not require that for current or future employees. They’ll pay more toward their retiree healthcare costs, and 2% of the savings generated from a delay in pay hikes will go toward healthcare.

“But there will be no reduction in an employee’s paycheck.

“With healthcare costs rising, he said, and private sector employees bearing more of the burden, it was all the more reason to bring public employees on board. And what better time to extract such a concession than the year in which IBEW spent a fortune backing Wendy Greuel for mayor, only to see her crushed by Eric Garcetti.

“With other city employees set to negotiate new contracts soon, what incentive is there for them to pay for healthcare now that DWP employees have been spared? None.”

Now, after that display of common sense, Lopez has what amounts to an epiphany: linking compensation decisions driven by political clout to headaches for the general public caused by inadequate government funding.

” … you can look for the mayor and council members to go hat in hand to the public next November with a bond measure to pay for street repairs, if not sidewalk repairs. This despite Garcetti saying during his campaign that he didn’t think we needed a sales tax increase.

“But we need a $3 billion bond, or bigger?   

“The ‘back to basics’ mayor, as Garcetti calls himself, apparently has no other way to pay for streets and sidewalks without that bond measure.

“Will you be inclined to vote yes while your water and power rates are going up in a city that doesn’t require DWP employees to contribute to healthcare premiums? A city in  which 70% of all employees pay nothing for healthcare premiums?”

For good measure, Lopez also refers to another stress factor on DWP rate payers: the city’s “increasingly expensive mandate on securing renewable energy,” environmental trendiness that may thrill Westside enviros but that does nothing for most L.A. residents but reduce the money they have to spend on their families.

The travails of San Jose, Stockton and other troubled cities in California have kept the spotlight off Los Angeles. But it is headed into decades of budget pain because of its generosity to unions. As I noted in a post earlier this year, more than one-third of the city’s budget goes to pay for retirees’ pension and health care — and that percentage is going up, not down.

At least with the election of Garcetti as mayor, L.A. voters have chosen someone who grasps this is a problem. Greuel, the loon Garcetti defeated, wanted to add 2,000 police and 800 firefighters to the payroll — a 20 percent increase even though L.A.s crime and fire problems are near historic lows. Why? To win the support of the police and fire unions.

But Greuel’s defeat will only buy L.A. a little extra time in staving off its decline. It’s not just the city’s permanent budget nightmare. L.A.’s private-sector economy is also in the middle of a broad, long-term decline that only occasionally gets the attention of its large daily newspaper.