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BLOG: Some Thoughts About Dixon's Water-Rate Situation

Is it wise to hire a consultant?

Now, the city’s water controversy has replaced Measure N. I’m one of those getting their water from the partnership between Dixon and the Solano Irrigation District (SID), so I’ve been following the story.

As I understand it, SID has wanted to raise rates considerably because it says the well-based water system is operating at a deficit. Mayor Batchelor and council member Fuller were willing to continue the partnership and OK the fee increase, while a majority of the council members (Ceremello, Besneatte and Bogue – expressing a distrust of SID) voted to end the partnership. If that happened, the partnership would officially end in 2014.  

One mystery in this mix is that the other water supplier in town, Cal Water, charges rates that are much higher than the Dixon/SID partnership.

Anyway, after the vote to dissolve, the logical next step was to figure out how Dixon would take over the partnership’s water delivery system and how much it would cost to run (in comparison to the old system). Dixon’s government and public works department could take over the maintenance and any future expansion (with new employees and new equipment), or that work could be contracted out to a private company. There were lots of angles to look at.

This week, the city council has voted to hire a consultant to research the various options and figure out how much they’d cost and how well they might perform. But hiring a consultant may be a waste of money.

I suspect that the new coalition of the council (to be sworn in Dec. 11) – consisting of Batchelor, Bird and Castanon – a new majority – are headed in the direction of overturning the earlier vote and restoring Dixon’s partnership with SID. If that’s the case, hiring a consultant would be a waste of money. Consultants don’t come cheap. If memory serves me correctly, consultants researching a project like this will charge in the neighborhood of $20,000 to $30,000.

However, if these three want to approach the various options with open minds, looking for the best deal for Dixon residents, then a consultant is a good idea. One of the problems with some consultants, though, is that they slant their reports toward what they think their employers want.

Myself, without first-hand knowledge of the Solano Irrigation District, but hearing reports about them, have developed a distrust of them myself, beginning with the large building they bought or built – which is much too large for their own needs. I feel that SID has been under the public radar for so long that they still feel they can do pretty much as they please.

One further thought that others have brought up – if Dixon does finally decide to take over the water delivery system from the partnership – why not go all the way and buy out Cal Water’s delivery system as well? It doesn’t make much sense from an efficiency and cost standpoint to have two different water delivery systems in a small city like ours. And Cal Water’s customers might see a reduction in fees eventually.

And, a new thought – if Dixon stays with the partnership, why not press SID to supply Dixon with water from Lake Berryessa such as Vacaville gets – water that’s much less “hard” than our well water.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Ian Arnold November 17, 2012 at 10:12 PM
For what it’s worth, I think bringing in a consultant is the right thing to do. I understand that some are hesitant to take on the responsibility and added expense of running our own water utility, but I think it’s worth exploring. During my unsuccessful run for City Council, I drove up to Red Bluff and toured their facility and talked to their employees. I came away with a belief that if Red Bluff can do it, I need an expert to tell me why we can’t. Our current City employees are doing so much, so well, that I’m confident that we could overcome all but the most significant obstacles. I understand that some may be hesitant to put the power to set rates in the hands of City government, but we need to accept reality. Regardless of who provides our water, we need to pay for today’s water delivery while building funds for future expansion. Additionally, we need to build a reserve for contingencies as well as an operating reserve. Kicking the can down the road will simply result in much lhigher rate increases when the system fails. Pay a little more now or a lot more later. (Not that I'm suggesting the currently-scheduled increase is "a little," rather an appropriate rate adjustment should have been made years ago.)
Ian Arnold November 17, 2012 at 10:14 PM
On the other hand, given the agreement with SID, it appears we could operate DSWA with another partner and, if we maintain that agreement for ten years, we “own” the infrastructure. This raises some interesting options. An experienced water company with robust finances may be interested in making a lump-sum payment (in the 8 figure range,) to be given the privilege of providing services to our citizens. I’m less enamored of the latter possibility than the former. I understand the latter could help Dixon fix some short-term problems, but we still give up control of rates and long-term planning and income. Finally, we could restore our partnership with SID: Either under the same terms as led to the current problems or under new, more favorable terms. For me, either would be a hard sell. As I say, let’s bring in a consultant. I urge City Council to post the consultant’s report and recommendations on line at least 10 days prior to public comment so we can read it, digest it and ask pertinent, probing questions.
Gary Erwin November 19, 2012 at 09:07 PM
Water is big business and this should give you some insight. http://seekingalpha.com/article/988281-california-water-service-s-ceo-discusses-q3-2012-results-earnings-call-transcript

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