Sacramento Budget and Audit Committee Meeting: October 13, 2026

The Budget and Audit Committee, chaired by Roger Dickinson, met to review an independent fiscal stability assessment of the Department of Utilities' Storm Drainage Funds. Note on time discrepancy: The provided meeting metadata indicates a time of 7:15 PM UTC, whereas the official meeting minutes and transcript consistently record the meeting as starting at 11:00 AM / 11:05 AM local time on the same date. The meeting included a single substantive discussion item, the Storm Drainage Funds Review, presented by the City Auditor's office and consultant RAFTELUS, and featured comments from two public speakers.

Consent Calendar

• Approved the meeting minutes from September 15, 2026 (File ID: 2026-01818). Motion by Vice Chair Karina Talamantes, seconded by Councilmember Eric Guerra. Passed unanimously (3-0, with Caity Maple absent).

Public Comments & Testimony

• Lambert Davis expressed gratitude to Chair Dickinson for requesting a specific 80-year program for the Del Paso Heights area and confirmed that a related resolution is being prepared by the city.
• L.R. Roberts (District 5) criticized the city's funding priorities, citing the lack of an ADA coordinator, insufficient parking for disabled individuals, a focus on policing traffic and homelessness over community needs, and issues with park management at McClatchy Park.

Discussion Items

• Storm Drainage Funds Review (File ID: 2026-01706) City Auditor Farishta Ahrary introduced the review, conducted by RAFTELUS (partnered with West Yost Associates). Consultant Jennifer Tvanis presented the findings remotely due to a weather-related flight cancellation.
• System Assessment: The storm drainage system encompasses over 1,000 miles of pipelines (serving 88% of the city by acreage), 107 sump pump stations, 76 detention basins, and extensive levee and creek networks. Key findings include a significant data gap—only 20-25% of pipes have been inspected by CCTV—and growing deferred maintenance, with over 5,800 work orders deferred since 2016. The current capital plan ($13.5 million per year through FY2031) is likely insufficient, with pipe renewal rates below 1% annually, implying a theoretical 100-year replacement cycle.
• Financial Scenarios: Two scenarios were modeled.
  • Status Quo (Current Service Levels): Fund 6011 (1996 Storm Drainage Fee, $41M/yr, never increased) faces an average annual shortfall of $4.8 million from FY2027-2031 and is projected to exhaust its balance by FY2033. Fund 6021 (2022 Storm Drainage Property Related Fee, $20M/yr) is similarly projected to be depleted by FY2033. Modeled rate adjustments include a 20% increase for Fund 6011 in FY2029 and a 120% increase for Fund 6021 in FY2031.
  • Level of Service: This scenario adds staffing and capital investment to address backlogs. Fund balances are depleted approximately three years sooner. Required rate adjustments are higher: a 40% increase for Fund 6011 in FY2029 and a 205% increase for Fund 6021 in FY2031.
• Council & Staff Deliberation:
  • Councilmember Eric Guerra asked about the potential for Proposition 4 grant funding to offset capital costs. DOU confirmed they are pursuing grants, but the model only assumes a small, consistent amount ($5M annually) as grants are historically inconsistent and primarily for capital, not operational, expenses.
  • Chair Dickinson questioned whether converting from a combined to a separate sewer system could be done incrementally to reduce long-term costs. DOU stated full separation was previously estimated in the billions of dollars and remains highly disruptive and challenging, but small-scale separation could occur with new development.
  • Chair Dickinson advocated for smaller, more frequent rate increases rather than large spikes after long gaps. DOU affirmed this is the intent, aligning with the strategy used for water and wastewater, and noted that the 218 process allows for a five-year rate plan to spread out adjustments.
  • Councilmember Guerra sought to identify the primary cost drivers in the combined system and expressed concern about the impact of significant rate increases on seniors and low-income households on fixed incomes, particularly those in older neighborhoods served by the combined system.
  • Vice Chair Karina Talamantes expressed a preference for in-person presentations for major consultant reports to City Council in the future, though she acknowledged the virtual presentation was necessitated by the consultant's flight cancellation.

Key Outcomes

• The committee voted unanimously (3-0, Member Maple absent) to accept the Storm Drainage Funds Review and forward it to the City Council for consideration. (Motion by Councilmember Guerra, seconded by Chair Dickinson).
• The Department of Utilities will use the review to develop a formal rate-making proposal. This process is expected to include engagement with the Utility Advisory Commission starting in January 2027 and a subsequent 218-rate approval process.
• The discussion emphasized moving towards a long-term financial strategy with incremental rate increases to stabilize the drainage funds and avoid severe spikes in customer bills.