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Record of Proceedings

Utilities Rate Advisory Commission Meeting - August 25, 2010: Measure B Discussion

Utilities Rate Advisory Commission — Wednesday, August 25, 2010
BodySacramento, California
SessionUtilities Rate Advisory Commission
DateWednesday, August 25, 2010
StatusFILED
Video Record
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Transcript — Verbatim
0:09

Okay, the hour of 508 having arrived.

0:14

Call to order the uh Utility Rate Advisory Commission.

0:17

Uh let's take a roll call.

0:19

Stephen Arnchwell.

0:20

Here?

0:21

Karen McBride?

0:22

Here.

0:22

Douglas Brown.

0:24

Tess Kretschman.

0:25

Carolyn Dillhunter.

0:27

Ernest Lear?

0:29

The Commission has a quorum.

0:30

We have squeaked by with a quorum.

0:35

Sorry, what?

0:39

Sure.

0:40

Some announcements before we start.

0:43

This meeting is being video streamed and can be viewed on the city's website or viewed later from the archived files.

0:49

Please turn all of your cell phones to silent.

0:51

Speaker slips are located in the back of the room.

0:54

If you wish to speak, please complete one and turn it in to our secretary at the front of the room.

0:59

We also have cordless microphones and assisted listening devices available from the Secretary upon your request.

1:08

Well that was a good timing.

1:13

We have one item on the consent calendar, the approval of minutes from our May 12th hearing.

1:19

Do I hear a motion to approve the prior meetings minutes?

1:24

So move.

1:25

So moved by Commissioner Brown.

1:28

A second?

1:29

Ms.

1:29

McBride, Commissioner McBride seconds.

1:33

All in favor?

1:34

Say aye.

1:35

Aye.

1:36

That item is approved.

1:38

And we will move expeditiously to the star attraction tonight.

1:45

And that is a discussion of Measure B, the Utility Rate Hike Rollback Act of 2010.

1:52

And we will be hearing from a number of different folks.

1:58

The Commission will discuss possible actions on Measure B.

2:03

And I suspect we'll be hearing first from Ms.

2:05

Moon.

2:07

Or we actually have that to compose it.

2:11

Very good.

2:11

That makes sense to chronologically.

2:14

Mr.

2:14

Powell, would you like to present on behalf of the campaign for common sense utilities rates?

2:24

Welcome, Mr.

2:25

Powell.

2:26

Thank you very much.

2:27

Mr.

2:27

Archibald and members of the Commission, it's good to see you all.

2:32

Thank you for this opportunity to give a quick rundown on the utilities rate rollback initiative.

2:39

Measure B.

2:40

It will be on the November 2 ballot.

2:44

First of all, I want to give you a little bit of history with regard to rates in the City of Sacramento.

2:51

We actually have the overhead projector is working.

2:55

Is it working?

2:56

Yes.

2:57

Okay.

3:04

I don't know if we can hone in on that or tighten up the focus.

3:07

There we go.

3:08

Just for the chart.

Discussion Breakdown — Share of Meeting
Budget and Finance███████████████████19%
Water Management█████████████████17%
Utilities████████████████16%
Public Comments███████████11%
Utility Rate Assistance Program█████████9%
Procedural██████6%
Measure B███3%
Capital Improvement Planning███3%
Labor Relations██2%
Summary of Proceedings

Utilities Rate Advisory Commission Meeting - August 25, 2010

The Utilities Rate Advisory Commission met on August 25, 2010, at 5:08 PM (adjourned at 8:45 PM) to discuss Measure B, the Utilities Rate Hike Rollback Act of 2010, which would roll back recent rate increases and cap future increases to CPI. The commission heard presentations from proponents and city staff, received public comments, and ultimately voted to recommend that the City Council oppose Measure B.

Consent Calendar

  • Approval of Minutes for May 12, 2010: Motion to approve by Douglas Brown, seconded by Karen McBride. All present in favor, none opposed. Minutes approved.

Public Comments & Testimony

  • Dale Skoglund: Supported Measure B, expressed frustration with past rate increases and misuse of funds, and urged the commission to recommend the measure to voters.
  • Lee Middleton: Opposed rising utility bills (personal increase from $104.15 in January 2009 to $120.48 in August 2010) and complained about lack of storm drainage service on his block despite paying fees. Called the Department of Utilities "totally incompetent."
  • Stanley Benson: Strongly supported Measure B, called the utility department "crooks" and cited scandals and lack of storm drainage. Criticized the commission for being absent and not taking action.
  • Greg Hatfield (Co-president South Pocket Homeowners Association, co-sponsor of Measure B): Supported the measure, cited inefficiencies in the department (e.g., nine employees to fix a small water leak), praised potential for contracting out services, and asked the commission to take a stand.
  • Ray Garcia (Sacramento County Taxpayers League): Supported Measure B, citing the Grand Jury report on financial mismanagement and the burden on seniors and low-income residents.
  • Clyde Macdonald (Watermaster Plan Advisory Committee member, speaking as an individual): Opposed Measure B, argued that capping rates to CPI is no way to run a utility and would hamper long-term infrastructure investment and regulatory compliance.

Discussion Items

  • Measure B: Utilities Rate Hike Rollback Act of 2010 Impact Report
    • Proponent Presentation (Craig Powell, Sacramento County Taxpayers League): Presented history of rate increases far exceeding CPI, alleged scandals (scrap metal, lost meters, illegal fund diversions of $21–$35 million per Grand Jury), and argued the department can operate within a CPI cap by renegotiating labor contracts, contracting out services, and using federal stimulus funds. Claimed Sacramento has among the highest regional utility rates.
    • City Staff Presentation:
      • Marty Hanneman (Utilities Director): Introduced the department's role and emphasized that costs average about $3 per day per customer.
      • Dave Brent (Engineering Manager): Detailed aging infrastructure: 100+ year-old water pipes, 120 miles of distribution mains over 100 years old, $120 million needed for water treatment plant rehab. Highlighted regulatory mandates (water meters, combined sewer system, solid waste recycling) and consequences of non-compliance (fines, moratoriums, lawsuits).
      • Jamille Moens (Business Services Manager): Presented financial impacts of Measure B: $22 million immediate budget reduction (from rate rollback and cost increases), leading to workforce cuts, reduced services (e.g., bi-weekly recycling instead of weekly), closure of wells/pumping stations, and loss of matching grant opportunities. Noted current reserves are only 2–3% of budget (prudent level is ~12%). Presented regional rate comparisons showing Sacramento water and sewer rates are among the lowest, with solid waste being mid-range due to twice-weekly service.
    • Commission Questions & Discussion:
      • Commissioners asked about $40,000 in TV ads (staff clarified it was grant-funded water conservation PSAs), Prop 218 violations (staff stated issues are being resolved via phased settlement), and labor costs (staff noted union concessions not taken resulted in 70+ position cuts).
      • Debate over CPI as a cap: Supporters argued it provides fiscal discipline; city staff and some commissioners argued it fails to cover actual cost drivers (electricity up 6.1%/yr, chemicals up 22.9%/yr, labor up ~7%/yr).
      • Greg Hatfield responded for proponents, defending CPI cap as transparent and noting the city already uses CPI for some fees. He stated the department can find efficiencies and that voters should decide on increases above CPI.
      • Commissioner McBride (state-certified wastewater operator) expressed concern that CPI cap would hinder long-term planning and grant eligibility.
      • Commissioner Brown noted the burden of rate increases on residents but argued reliable utility service is essential for businesses.
      • Commissioner Lehr raised questions about fund transfers and asset management, indicating unanswered questions about budget execution.

Key Outcomes

  • Motion by Commissioner Brown: That the Utilities Rate Advisory Commission recommend to the City Council that the Council oppose Measure B on the November 2, 2010 ballot. Seconded by Commissioner Veal-Hunter.
  • Vote: Commissioners Archibald, Brown, McBride, and Veal-Hunter voted in favor. Commissioner Lehr abstained. Motion passed (4-0-1).
  • Action: The commission formally recommends that the City Council oppose Measure B.
  • Commissioner Announcements: Commissioner Lehr indicated he would submit written questions about specific budget items for future discussion.

Meeting Transcript

Okay, the hour of 508 having arrived. Call to order the uh Utility Rate Advisory Commission. Uh let's take a roll call. Stephen Arnchwell. Here? Karen McBride? Here. Douglas Brown. Tess Kretschman. Carolyn Dillhunter. Ernest Lear? The Commission has a quorum. We have squeaked by with a quorum. Sorry, what? Sure. Some announcements before we start. This meeting is being video streamed and can be viewed on the city's website or viewed later from the archived files. Please turn all of your cell phones to silent. Speaker slips are located in the back of the room. If you wish to speak, please complete one and turn it in to our secretary at the front of the room. We also have cordless microphones and assisted listening devices available from the Secretary upon your request. Well that was a good timing. We have one item on the consent calendar, the approval of minutes from our May 12th hearing. Do I hear a motion to approve the prior meetings minutes? So move. So moved by Commissioner Brown. A second? Ms. McBride, Commissioner McBride seconds. All in favor? Say aye. Aye. That item is approved. And we will move expeditiously to the star attraction tonight. And that is a discussion of Measure B, the Utility Rate Hike Rollback Act of 2010. And we will be hearing from a number of different folks. The Commission will discuss possible actions on Measure B. And I suspect we'll be hearing first from Ms. Moon. Or we actually have that to compose it. Very good. That makes sense to chronologically. Mr. Powell, would you like to present on behalf of the campaign for common sense utilities rates? Welcome, Mr. Powell. Thank you very much. Mr. Archibald and members of the Commission, it's good to see you all. Thank you for this opportunity to give a quick rundown on the utilities rate rollback initiative.

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