You have to love Fresno's poor. They're such loyal patsies for the rich.
I sometimes wonder if this is the only logical way to look at City Hall's controversial water project and how the debate has unfolded.
We all know the water project's context. I'll give a quick summary anyway.
Mayor Ashley Swearengin is proposing a $429 million upgrade to the city's water system. The rate hikes needed to pay for everything go to the City Council next Thursday (Feb. 26).
Fresnans, like all Californians, love water. We use a lot of the stuff. The skies don't always deliver. Fresno solved the problem by putting a straw in the aquifer. Stop it, Mother Nature and Sacramento now say.
Fortunately, Fresno hit the water lottery. The city has entitlements to 180,000 acre feet of river water in a normal rain year. That's more than enough to quench our thirst and replenish the aquifer.
Unfortunately, Fresno leaders over the decades refused to pay for all of the treatment plants and pipes necessary to make full use of this river water.
Swearengin and some council members want to make up for lost time. The project's big-ticket item is a new surface water treatment plant in southeast Fresno. But they must raise water rates to foot the bill.
The typical single-family residence would see its monthly water bill essentially double over five years, from about $25 to about $50.
The mayor's rate plan (and therefore the upgrade) is meeting fierce opposition. Some of this anger is found on the council dais. At the heart of their push-back, some council members and other opponents say, is their concern for Fresno's poor. They say the poor can't afford a doubling of water rates. Therefore, they say, the mayor's plan must die and be born again. (In what manner? No one says.)
The public debate for nearly two years has centered on the poor. The issue has dominated administration attention for the past six months. How, City Hall asks itself, can the poor's water bill be removed as a deal-killer while retaining a rate plan that delivers enough money to pay for the entire project?
A possible answer: Can't be done. That's because opponents don't want to kill the project for the sake of those who would struggle to pay the higher rates. They want to kill the project for the sake of those who can handle the higher rates with ease. But they want the poor to be their cover.
Let's take a look at some numbers.
The city from the get-go had a communications challenge. Water consumption is a tricky business. The variety of homes, property sites and lifestyles is almost endless. That means water bills fit no simple pattern.
Yet, consumers in a democracy have a right to a ballpark idea of what proposed new water rates could do to their bill. They have a right to this estimate without resorting to a high-powered computer to crunch all the variables.
City Hall for two years has responded with a chart. It's a chart for the typical single-family residence in Fresno. We're talking about a house with a yard.
This chart shows what five years of rate increases would mean to the typical house's bill. There are two parts to the bill -- the meter charge and the consumption charge. Each part would see an annual hike.
Swearengin pitched a revised plan (the original plan dates back to summer 2013) to the council late last year. This revised plan estimated that the typical house's monthly bill in five years would go from $24.49 to $52.18.
The estimate was pure gold to reporters. It featured the word "typical." That's an empty buzz word if ever there was one. But reporters don't care. "Typical" in a messy life is a word guaranteed to safely obscure a lot of loose ends that, if pursued, would only increase the burden on an already complex story. Best of all, the estimate with its "typical" house came from City Hall. Reporters had an authoritative source in their corner.
But how did City Hall come up with a "typical" single-family house?
There are 112,000 single-family houses in Fresno, give or take a few. Half of them (56,000) use 18 HCF (hundred cubic feet) or more of water in a month. Half of them (56,000) use 18 HCF or less in a month.
City Hall had its key weapon in the communications battle: The typical single-family house in Fresno uses 18 HCF of water in the average month.
You ask: What's all this chatter about HCF? Well, the city bases its consumption charge on the concept of "hundred cubic feet." One hundred cubic feet of water is 748 gallons.
The mayor's rate plan revolves around "HCF" as a unit of measurement. If you used two HCF in a month, then you used 1,496 gallons. If you used four HCF, you used 2,992 gallons.
Now, keep in mind what I wrote earlier in this blog. I wrote that the Swearengin rate plan pitched to the council in late 2014 estimated that the typical single-family house's bill would jump from $24.49 to $52.18 in five years.
The math went like this:
* The monthly meter charge under current rates for this house is $13.51.
The current charge per HCF is 61 cents.
The house uses 18 HCF per month.
18 x 61 cents is $10.98.
$13.51 plus $10.98 is $24.49. That's what this typical house pays per month for water.
* The monthly meter charge in five years in the mayor's plan of late 2014 would have been $18.70.
The charge per HCF in five years would have been $1.86.
The house uses 18 HCF per month.
18 x $1.86 is $33.48.
$18.70 plus $33.48 is $52.18. That's what this typical house would have paid per month for water in Swearengin's plan of late 2014.
We will now take a deep breath.
Next we'll do the same work on the mayor's new plan.
You see, Swearengin on Thursday (Feb. 19) held a news conference in front of downtown's historic Water Tower. Council Members Steve Brandau and Paul Caprioglio were there. So, too, were state officials.
Swearengin announced that Fresno has qualified for nearly $200 million in low-interest state loans for the water project. She had based her late 2014 rate plan on a mere $50 million in state loans. The good news from Sacramento means lower interest costs for the project. This, in turn, means savings for ratepayers.
So, Swearengin on this day pitched new meter and consumption charges for the next five years.
The math going to the City Council on Feb. 26 for this typical single-family house now looks like this:
* Current charges -- blah, blah, blah. Monthly bill: $24.49.
* The monthly meter charge in five years in the mayor's plan of February 2015 is $17.90.
The charge per HCF in five years will be $1.74.
The house uses 18 HCF per month.
18 x $1.74 is $31.32.
$17.90 plus $31.32 is $49.22.
Bottom line: The state's generosity (Swearengin made sure everyone at the news conference knew that local assembly members and state senators helped mightily with the bigger loan) means this typical house will pay $2.96 less per month for water.
I've heard some of the mayor's opponents ridicule the size of this savings. "Three bucks is nothing," they say. Actually, the $2.96 represents a discount of 5.7% for this typical single-family house's monthly water bill five years down the road.
If three bucks is a piddling figure, perhaps it's because, when you get right down to it, we're dealing with nothing but piddling figures at the individual consumer level. Under Swearengin's late 2014 rate plan, the typical house would see its monthly bill rise $27.69 in five years ($24.49 currently; $52.18 in five years -- the difference is $27.69).
Take $2.96 from that $27.69 and the consumer discount generated by the state's generosity is actually 10.7%.
I've heard no one complain about $24.49. I heard many say the sky would fall at $52.18. The mayor's critics can't have it both ways. The critics can't say the world would end if the typical house in five years paid $27.69 more per month for water, then turn around and claim the state's generosity is cutting that increase by nearly 11% is utterly worthless.
That brings us to another key point about the mayor's five-year rate plan, one that applies to my original question: Are critics of Swearengin's rate plan using fake concern for the poor as cover to kill the project so the well-heeled have more money to spend on themselves?
The odd thing about a five-year rate plan is that it covers five years.
No one (and I'm the most guilty of this) looks at how rate hikes for years one through four will impact customers.
As we take a look at each of the five years in both the late 2014 rate plan and the newest rate plan, please keep this proposal in mind: The mayor on Feb. 26 will pitch to the City Council a consumer assistance program totaling $1 million per year. This plan would knock an additional $5 per month off the bill of about 17,000 low-income ratepayers in single-family houses.
Back to the rate plans.
Swearengin proposed this monthly rate plan in late 2014:
* Current charges: 61 cents per HCF; $13.51 meter charge; $24.49 bill for 18 HCF.
* Year 1: 95 cents per HCF; $11.20 meter charge; $28.30 bill for 18 HCF.
* Year 2: $1.19 per HCF; $12.70 meter charge; $34.12 for 18 HCF.
* Year 3: $1.39 per HCF; $14.60 meter charge; $39.62 for 18 HCF.
* Year 4: $1.67 per HCF; $17.20 meter charge; $47.26 for 18 HCF.
* Year 5: 1.86 per HCF; 18.70 meter charge; $52.18 for 18 HCF.
There was no $1 million consumer assistance program at this time. This is what the folks in the typical house would pay. End of discussion.
Here's what things look like as of Feb. 19, with Swearengin's new rate plan:
* Current charges: 61 cents per HCF; $13.51 meter charge; $24.49 bill for 18 HCF.
* Year 1: 92 cents per HCF; $11.20 meter charge; $27.76 for 18 HCF.
* Year 2: $1.09 per HCF; $12.30 meter charge; $31.92 for 18 HCF.
* Year 3: 1.28 per HCF; $13.80 meter charge; $36.84 for 18 HCF.
* Year 4: $1.50 per HCF; $15.80 meter charge; $42.80 for 18 HCF.
* Year 5: $1.74 per HCF; $17.90 meter charge; $49.22 for 18 HCF.
Unlike late 2014, there is now a $1 million consumer assistance program on the table. Let's say someone living in the typical single-family residence qualifies for this program. That person gets a $5 discount each month for five years. What does that typical customer's monthly bill look like under the mayor's Feb. 19 plan?
* Current charges (no subsidy): $24.49.
* Year 1 ($5 subsidy): $22.76. (That's right -- a 7.1% drop in the bill.)
* Year 2 ($5 subsidy): $26.92.(9.9% higher than current charges.)
* Year 3 ($5 subsidy): $31.84. (30% higher than current charges.)
* Year 4 ($5 subsidy): $37.80. (61.4% higher than current charges.)
* Year 5 ($5 subsidy): $44.22. (80.6% higher than current charges.)
My point: The monthly bill for the typical single-family house doesn't double immediately. It rises incrementally. The amount in dollars isn't dramatic. That $5 monthly subsidy is a difference-maker.
But, someone might say, the person living in that typical house has almost no chance of getting the $5 subsidy. After all, the typical single-family house with its habit of consuming 18 HCF per month sits right in the middle of the consumption pattern. There are 56,000 houses using more than 18 HCF per month and 56,000 houses using less than 18 HCF per month. The $5 subsidy goes to the poor, and the program can handle only about 17,000 accounts. Chances are the poorest ratepayers are those using less than 18 HCF per month.
In other words, the assistance program's pot of money probably goes dry long before the person living in typical house gets any.
I agree. But this brings me to my points about the role of the rich and poor in this issue.
A monthly consumption of 18 HCF is the halfway point among the 112,000 single-family residences. That's the median.
But that's not the average monthly water consumption among those 112,000 houses. The average monthly consumption in 2014 was about 22 HCF.
Let's take this one step further.
The average monthly consumption among the top 56,000 houses was 31 HCF. The average monthly consumption among the bottom 56,000 houses was 12 HCF. This is according to City Hall.
Keep in mind that the city's water division is an enterprise division. It gets nothing from the general fund, which is money spent at the discretion of elected officials. The water division must pay all of its bills with money from things like grants and ratepayer checks. The water division can't make a profit. It can only charge customers what it costs to operate.
Swearengin's proposed rate plan is designed to generate enough money to 1.) cover current operating expenses; 2.) cover the relatively small pay-as-you-go portion in the big project; 3.) cover debt service in the big project; 4.) fund a prudent reserve -- but not a penny more.
Here are a few thoughts:
* The average monthly water bill for the bottom 56,000 houses under the current rate plan is $20.83 (12 HCF x 61 cents is $7.32 plus $13.51 meter charge).
* The average monthly water bill for the top 56,000 houses under the current rate plan is $32.42 (31 HCF x 61 cents is $18.91 plus $13.51 meter charge).
* The average monthly water bill for the bottom 56,000 houses in Year 1 of the mayor's plan is $22.24 (12 HCF x 92 cents is $11.04 plus $11.20 meter charge). At this point, we are getting into the universe of houses likely to get the $5 monthly subsidy. That means such a subsidized house using 12 HCF would see its monthly water bill drop to $17.24.
* The average monthly water bill for the top 56,000 houses in Year 1 of the mayor's plan is $40.32 (31 HCF x 92 cents is $28.52 plus $11.20 meter charge). I'm guessing relatively few ratepayers among the top 56,000 houses will qualify for the $5 subsidy.
* The average monthly water bill for the bottom 56,000 houses in Year 2 of the mayor's plan is $25.38 (12 HCF x $1.09 is $13.08 plus $12.30 meter charge). If the ratepayer qualifies for the assistance program, the monthly bill drops to $20.38. In other words, under the mayor's plan the ratepayer using the average amount of water for the bottom 56,000 houses would, with the help of the assistance program, actually pay less per month for the next two years than she is currently paying.
* The average monthly water bill for the top 56,000 houses in Year 2 of the mayor's plan is $46.09. (31 HCF x $1.09 is $33.79 plus $12.30 meter charge).
* The average monthly water bill for the bottom 56,000 houses in Year 3 of the mayor's plan is $29.16 (12 HCF x $1.28 is 15.36 plus $13.80 meter charge). With the $5 monthly subsidy, a ratepayer in the third year would have a monthly water bill of $24.16 -- 33 cents less than that proverbial "typical" single-family residence that I've been writing about for nearly two years.
* The average monthly water bill for the top 56,000 houses in Year 3 of the mayor's plan is $53.48 (31 HCF x $1.28 is $39.68 plus $13.80 meter charge).
* The average monthly water bill for the bottom 56,000 houses in Year 4 of the mayor's plan is $33.80 (12 HCF x $1.50 is $18.00 plus $15.80 meter charge). With the $5 monthly subsidy, the bill drops to $28.80. That is $7.97 per month more than the customer was paying four years earlier, when the mayor's plan had yet to go into effect.
* The average monthly water bill for the top 56,000 houses in Year 4 of the mayor's plan is $62.30 (31 HCF x $1.50 is $46.50 plus $15.80 meter charge).
* The average monthly water bill for the bottom 56,000 houses in Year 5 of the mayor's plan is $38.78 (12 HCF x $1.74 is $20.88 plus $17.90 meter charge). With the $5 monthly subsidy, the bill drops to $33.78. That's just a few bucks more than the monthly bill that Fresno houses pay for city-operated trash service, for which Fresnans can thank that great exercise in egalitarianism and economic justice, Measure G. Council Member Lee Brand is fond of saying anyone can pick up your trash but you can't go to the Yellow Pages and find a spare 180,000 acre feet of river water.
* The average monthly water bill for top 56,000 houses in Year 5 of the mayor's plan is $71.84. (31 HCF x $1.74 is $53.94 plus $17.90 meter charge).
Here's the way I see these numbers.
The top 56,000 house under the current rate plan pay $1,815,520 per month in water bills. The bottom 56,000 houses pay $1,166,480. The top 56,000 houses pay 60.9% of the total monthly water bill.
The top 56,000 houses in Year 5 of the mayor's plan will pay $4,023,040 every month in water bills. The bottom 56,000 houses in Year 5 of the mayor's plan will pay $2,171,680 every month in water bills. Subtract $83,300 per month from the assistance program and the amount is $2,088,380. The top 56,000 houses will pay 65.8% of the total monthly water bill.
The gap between the top 56,000 houses and the bottom 56,000 houses in this big project's funding responsibility widens rather dramatically in the first five years of the 30-year loan period. I'm guessing the gap will only grow in years 6 through 30.
This project's bills won't be paid by the woman who owns an 1,100-square-foot house on a 5,000-square-foot lot in central Fresno. The bills will be paid by the woman who owns a 2,500-square-foot house on a 12,000-square-foot lot in north Fresno.
Yet, it's the woman in the small 80-year-old house in central Fresno who, if Swearengin is right, stands to gain the most from the mayor's project.
This $429 million water project stacks up to be third and perhaps final piece in City Hall's epic campaign of asset redistribution.
This campaign started in earnest in January 2001 when Alan Autry was sworn in as mayor. He beat Dan Whitehurst in November 2000 by promising to put an end to Fresno as the "tale of two cities." The rich north and the impoverished south would become one, equal in fact as well as theory. Perhaps more importantly, Autry vowed, sprawl would finally pay its fair share to revitalize the urban core it had left behind in the 55 years since the end of World War II. It didn't matter if this suburban growth was in northwest Fresno or southeast Fresno, Autry said. It didn't matter if the homeowners in this suburban growth were Hispanic, African-American, Hmong, white or whatever, Autry said. Sprawl, he said, would fulfill its long-neglected duty to older neighborhoods.
Autry's historic success was a reform of the city's system of development fees in 2004-2005. It's enough here to note that Autry got developers to agree that building fees from fringe developments could, in some situations, be used to improve services such as parks and public safety in the urban core. Of course, the money wasn't coming from the developers. It was coming from the developers' house-buying customers.
The fallout from this reform wasn't all positive. City Hall, being in a hurry, decided to borrow millions for inner-city projects. The idea was that money from the new development fees would always flow. Then the Great Recession hit. The system of development impact fees to this day has bugs. The administration and the City Council in 2015 are expected to reform Autry's reform. But there's no denying that Autry (with the council's help) took a big and much-needed step a decade ago toward the fair redistribution of community assets from suburbs to urban core.
Then, in January 2009, Ashley Swearengin took office as mayor. Like Autry, she focused from the start on older neighborhoods. Her first big idea was a sweeping (some might say revolutionary) reform of the city's general plan, Fresno's blueprint for growth. It's enough here to note that the general plan approved last year by the City Council is redistributive, too. But instead of money, Swearengin is using the general plan to redistribute people. It's all voluntary, of course. No forced marches from Fig Garden Village to Fulton Corridor. Her aim is to use incentives and land-use policy to convince people with options that Fresno's urban core is a good place to call home.
The momentum builds from there.
But progressive fee systems and idealistic general plans don't mean squat if a city has no water. That's especially true in older parts of Fresno, where aging infrastructure, water insecurity and poisoned wells bedevil policy-makers and citizens alike. So, Swearengin came up with the $429 million system upgrade. Based as it is on consumption, it is as redistributive in nature as Autry's developer impact fees and the 2035 general plan. The big green lawns in the sprawl that (according to legions of community activists) caused such unjust grief for inner-city Fresnans will, if the mayor's plan survives, generate the money to pay for a water system that creates a solid foundation for inner-city Fresno's revitalization.
At least that's what I'm told by some folks at City Hall.
Then again, maybe all this talk about the poor and their water bills will be enough to kill Swearengin's water project.
I'm a cynic. I'll appreciate the show.
So will the sprawl.