Vote NO on Tuesday!

I am going to vote NO in the Jan. 13 water rate election. I hope this blog persuades at least some of you to do the same.

The proposed water rates are part of a ongoing subsidy deal for new development. The City says it will cost $12 million to get 2 million gallons per day (GpD) in new water capacity - $6/GpD. The water rates proposed include $9 million for up to 1.5 million GpD for current ratepayers, which works out to be at least $6/GpD for new capacity. The price for new development, on the other hand, was set by ordinance at $3.14/GpD in 2015 and $3.92/GpD in 2016 (and potentially beyond) without any quantity limits. If new development buys $3 million worth of new water capacity at these prices, they will end up with 835,655 GpD capacity.* $3 million from new development and $9 million from customers still only buys 2 million GpD, however, so current customers only get 1,164,345 GpD, for an effective price of $7.73/GpD. Higher or lower actual well costs don't help current customers - at best, we get 1.5 million GpD a for $9 million. New development pays less than full cost for new water capacity; current water customers make up the difference.

This water-capacity subsidy is a problem, not only as a matter of principle, but also as a matter of practice and precedent. Norman has very limited access to new potable water. Subsidizing new development leads to overuse by the most resource-intensive users - at least until the water is gone. New development needs to pay its own way, both as a matter of fairness and as a matter of providing appropriate incentives for conservation. The water rate election is a crucial test of this principle. Norman is at a point where new development is increasingly costly. According to the 2060 Strategic Water Supply Plan, new well water capacity will be $13/GpD if the EPA adopts proposed Chromium 6 regulations. Further, it calculates that new development will be responsible for well over half of the $415 million cost of supplying water in the future. Drinking water isn't the only issue either - wastewater and stormwater issues are on the horizon. If we can't hold new development accountable for its costs with the power of an election behind us, we will be unlikely to do better without any direct influence on the outcome.

Rejecting this water rate proposal is not to reject any rate increase. Water rates will need to go up in order to pay for legally mandated improvements for current users. The Jan. 13 election is, however, a crucial opportunity for citizens to negotiate a better deal for both this set of water system improvements and future cases where developers try to leverage a subsidy. The City Council can end the water-capacity subsidy at any time by raising water connection fees for new development, so there is no reason why we can't get a better deal quickly.** Or we could adopt a real 'trigger mechanism' that raises the connection fee as soon as costs are known. Or we could vote on the mandated water treatment issues as soon as possible and leave the contentious capacity issues for a later vote. The smart vote on Tuesday is NO until the water capacity subsidy ends. If we can't get new development to pay its own way in this case, we will have little chance to influence the inevitable subsidy fights of the future.

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* Assumes no acceleration in new connections to take advantage of 2015 prices.

** The City has already certified that $3 million is a legally appropriate cost for 500,000 GpD capacity in Section 10 of Resolution R-1415-60 adopted on Nov. 25, 2014 (https://norman.legistar.com/View.ashx?M=F&ID=3383535&GUID=4F934AAC-E43B-4242-9383-215FBCEB4C4A).