A Thirst for Change

A Thirst for Change

April Issue 2012: By Robert Link, SFAA President

A drier than average rainy season leads to new thoughts on getting tenants to share the burden of water conservation.

It is likely to be a drought year for the Northern Californian water supply. I know this because the snow/ski season is way past its usual apex point and I have yet to use my Squaw season pass. Sunny and warm days in January are nothing to complain about, yet the effects of these warm days will be felt throughout the year.

La Nina, the reciprocal of last year’s bountiful El Nino, is sure to incite discussion of water conservation in the near future. By late spring, after the final snowpack data is examined, hydrologist forecasters will give us the likely grim news that the surplus built up last year has been negated by the shortfall in this year’s snowpack.

This issue of water conservation seems to go into temporary hibernation in good years and then inevitably resurfaces in lean years. It begs the question: “whose problem is this anyway?” There certainly appears to be enough water to meet everyone’s needs without the need for rationing; however, there exists an irony with most people’s perception of the water supply and more importantly the cost of water.

The disconnect is from the fact that 67% of San Francisco residents are renters, most of whom do not have to pay a water bill or any portion thereof. Most residential apartment buildings were built with one master meter and that expense has been typically borne by the building owner thus creating a gap of ambivalence towards water usage in the City.

We have come to define part of our City’s identity by our environmental awareness towards many of our other natural resources ranging from alternative power to recycling. Yet, much consideration is not paid to what is arguably the most precious resource next to sunlight: water.

A Threat to Hetch Hetchy

San Francisco’s water supply comes directly from the Hetch Hetchy Reservoir, located at high elevation in the Yosemite foothills which is fed clean, pristine runoff water from the Tuolumne River. The water is then piped directly, unfiltered from the source reservoir to the Bay Area without any exposure to the external environment, agricultural waste or other factors that may affect its purity.

The delivery system is so efficient that it runs off gravity, requiring no pumps to move the water. In fact the system produces a net positive of 1.6 billion kilowatt hours of hydroelectric power that supplements the City’s electric power needs. The piping system has been reinforced in recent years to hedge against potential seismic activity; accordingly, its asset value to the County of San Francisco is enormous.

Recently, an environmental group launched a campaign to restore the reservoir back to its pre 1930 condition. The campaign calls for restoration of the reservoir back to the Yosemite Valley “making it whole again.” The group is now gathering signatures to support a ballot measure , which, if passed by San Francisco voters, would require the City to craft a plan to both conserve more water and stop using Hetch Hetchy Valley for water storage by 2035. The plan would need final approval from San Francisco voters in 2016.

Draining the reservoir, restoring the valley ecosystems and expanding other reservoirs would require a massive public works project that the California Department of Water Resources, estimated in 2006, would cost at least $3 billion. Current estimates by the San Francisco Public Utilities Commission (“SFPUC”), which operates the reservoir, state the costs could exceed $10 billion, clearly necessitating another bond measure to fund the massive public work.

By way of comparison, a $4.6 billion overhaul of the pipes and water treatment facilities that carry water from Hetch Hetchy Reservoir to the Bay Area is nearing completion after more than a decade of work. The original estimate of that project forecasted a tripling of the average SF user’s water bill which again is calculated on per capita usage not the actually number of people who are sharing in the costs.

If the reservoir is drained, San Francisco would also face a shortage of hydroelectric power, forcing it to purchase additional electricity on the open market or invest heavily in alternative green energy resources. The Mayor has voiced his strong disapproval of this movement and has made inferences that the Hetch Hetchy water source and rights would be vehemently defended by the San Francisco.

RUBS the Right Way

The SFPUC imposes water rate increases every July and the rate increases toward mitigating the rising cost of treated of waste water which typically is approximately 90-95% of total water usage in an urban setting. Approximately, all apartment buildings have a 95% flow factor.

The water service portion of an owner’s SFPUC bill is grouped into two pricing tiers: (1) Tier One which is the first 6 units of water per unit ( 1 Unit=748 gallons) and is currently priced at $3.50/unit, and effective July 1, that will increase to $3.90/unit reflecting an 11% increase; and (2) Tier 2 pricing which reflects 6 or more units of water per unit in a given billing period (2 months). Tier 2 is going up from $4.60 per unit of water to $5.20/unit reflecting a 13% increase.

Water usage accounts for approximately one third of the total bill. The sewer bill is an entirely different beast. The second component of a water bill is comprised of water treatment, i.e., the sewer service. Since most apartment complexes in the City do not have large landscaping expenses on their annual expense projections, they are calculated at 95% flow factor. As with water usage, the sewer expense is also tiered into two groups as water usage: (1) Tier 1 is billed at $7.16 per unit increasing to $7.52, a 5% increase; and (2) Tier 2 which is billed at $9.55 and increasing to $10.03, also a 5% rate increase.

This means the annual services increases far outpace the regional Consumer Price Index and Cost of Living Index. This annual increase essentially insures that even with modest conservation, the water charges will continue to escalate because the rate increases outpace rate of conservation.

Is there any available relief for property owners? There are some remedies for property owners but there exists some question as to these remedies’ effectiveness and fairness to residents.

Rationed Utilities Billing Service (“RUBS”) is a method of recovering the cost of utility services, water, and/or garbage by division of the expense by the number of doors, square footage and/or number of people to determine a shared per unit cost. Tenants in the system are then billed in arrears for their pro rata usage. This system provides incentives to residents to be mindful of their water usage by creating a shared responsibility.

However, implementation of this shared system can only be done at the inception of new tenancies because implementation at any other point would be construed as either a reduction in services or more likely, an illegal rent increase. RUBS can also create a division between newer, market rate paying tenants, conscious of their own usage and usage around them and existing, longer term tenants, unaware of their usages. The rationale is that RUBS tenants can influence the other tenants to conserve through education and outreach. I frankly think those successes would be marginal at best, although I may be altogether incorrect.

The second method of recovering water costs is through water revenue bond pass through petitions available through the Rent Board. This pass through allows for building owners to pass through 50% of the portion of their bill attributable to the 2002 Water System Improvement Bond. They do not require Rent Board certification but must be well documented. They are fairly easy to calculate and it is best to complete them by calendar year. More information on the process is available at the San Francisco Rent Board’s website: www.sfrb.org.

The moral of the story is that water conservation needs to be a shared responsibility for all people. The current system enjoyed by the majority of San Francisco residents is broken and needs to be fixed at fundamental level. Water is a precious resource and we need to have all residents of this City embrace this as a civic duty.

Link to SFAA article.