Written and submitted by John Kluge, Solano Irrigation District, Division 1 Director:
Dear Dixon-Solano Water Authority Customers:
Since 1983 the City of Dixon and the Solano Irrigation District (SID) have partnered as the Dixon Solano Water Authority (DSWA) in a Joint Powers Agreement to provide residential water to the majority of the City of Dixon (everyone not served by Cal Water).
This partnership has resulted in the lowest residential water costs in the area (as compared to Davis, Vacaville, Woodland or Fairfield).
On August 6, 2012, the Dixon City Council voted 3 to 2 to dissolve the existing DSWA Agreement with SID and take over operations of the water system.
Prior to voting to dissolve the agreement, numerous comments were made by the City Council regarding concern for the customers getting the “best deal,” the City “doing it cheaper” and the City “needing to take responsibility of running this water system.”
All statements from the City Council were based on the assumption of being able to provide the same level of quality service as accomplished by the Joint Powers Agreement with SID, but at a lower cost to the customer.
It is interesting to note that in 1983, the City of Dixon approached SID to provide water to proposed new residential construction at that time.
The reasoning was the small customer base number did not provide the economies of scale to make it economically feasible for the City to operate the water system. Even with today’s population it remains economically infeasible.
In the last two years, the City reviewed request for proposals for interim operators after the Agreement ends.
Proposals were received from several for-profit private firms. SID submitted a letter reaffirming its commitment to our Dixon customers and requested a side-by-side comparison with the private firms.
When costs for the City of Dixon to operate the system as part of the Public Works Department are reviewed, the City’s annual costs exceeded more than $200,000 over SID’s annual cost of operation.
Looking at the individual expenses the differences begin to add up:
· Administrative Costs, the City is $67,589 higher than SID
· Utility Costs, the City is $22,000 higher than SID
· Legal Costs, the City is $8,000 higher than SID
· Operations Costs (Private Company named Severn Trent), the City is $105,479 higher than SID
· Maintenance Costs are about the same since for both City and SID the costs are time-and-materials to respond to events (i.e. pipe breaks, water leaks, etc.), however the City will be required to purchase additional equipment and vehicles that SID already has.
All told, the City will be running the water system for 20 percent more than it took SID to run the system, a cost that will presumably be passed on the customers. It makes no sense to throw out something that has been working and replace it with something that is questionable at best.
As a former Dixon citizen and the current SID Director, representing the City of Dixon, I remain committed to the Dixon customers receiving the best water service possible, which I believe is provided by SID.
It’s unfortunate that after more than 30 years of a beneficial partnership, the Dixon City Council is choosing a path that will result in the Dixon water customers paying significantly higher water rates.
At this time, I would like to thank the DSWA customers and as your SID Division 1 representative, express my appreciation for allowing SID to be your preferred water provider for the past 30 years.
Through August 10th and beyond, SID remains committed to providing safe domestic water at the lowest water rates of the other neighboring cities in both Solano and Yolo County.
I sincerely wish the City of Dixon the best in taking on this responsibility and in being able to fulfill all of the customer’s water needs in the coming years.
Signed, John Kluge
SID, Division 1 Director