Utilities Rate Advisory Commission Meeting - November 28, 2012
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Utilities Rate Advisory Commission Meeting - November 28, 2012
The Utilities Rate Advisory Commission (URAC) met on Wednesday, November 28, 2012 from 5:32 p.m. to 7:15 p.m. at New City Hall in Sacramento. The commission received updates on the Rate Increase Revenue Accountability Plan (including bond financing, capital improvements, and a new utility rate assistance program) and the Solid Waste & Recycling Division Business Plan (including service changes, rate reallocation, and a Prop 218 process). No formal votes were taken on the discussion items; both were received and filed. A public comment was made by a student from a high school project, though the minutes state "None" for public comments.
Consent Calendar
- Approval of Minutes for September 26, 2012: Moved by Karen McBride, seconded by Scott Brown. Approved by a vote of 6-0-1 (Christopher Butcher abstained; Carolyn Veal-Hunter arrived after the vote and later affirmed approval).
Public Comments & Testimony
- One member of the public, a student from a high school project, spoke during the "Matters Not on the Agenda" portion. No specific issue was raised. Commission minutes note "None" for public comments, but the transcript indicates a brief comment occurred.
Discussion Items
Rate Increase Revenue Accountability Plan Update (Item 2)
- Staff (Dave Brent, Susan Goodison, Bill Busath, Shelley Smallwood) presented updates on three components:
- Bond Financing: Two series of bonds (water and wastewater) expected to be issued in early 2013. Water bonds targeted for February 2013. City Council resolution planned for January 2013. Wastewater bonds to follow on a separate schedule.
- Capital Improvement Program: Water treatment rehabilitation (bid award late Feb 2013, completion summer 2016). Meter program: eight projects installing 15,000 new meters over three years at an estimated $56 million. Groundwater well rehabilitation: 20 of 27 wells assessed and rehabbed by 2015 for ~$7 million. Wastewater: Oak Park Regional Storage Project ($12 million) plus 40 sewer pipe projects totaling ~$10.4 million. A public-friendly version of the CIP guide is under development.
- Utility Rate Assistance Program: City Council allocated $1.1 million (from general fund utility tax increment) to offset FY13 rate increases for low-income customers. The program offers $3.50/month discount on water and $2.50/month on wastewater for customers at or below 100% federal poverty level. Estimated participation based on 17.8% poverty level and 68% penetration rate (based on SMUD data). Program effective January 2013; first 90-120 days allow retroactive enrollment. Administration costs estimated at 15-20% of budget. Commissioners questioned the 100% poverty threshold vs. 200% used by other utilities, and the potential for lower-than-expected participation due to renter ineligibility. Staff noted the program will be evaluated and may be adjusted in future budget cycles.
Solid Waste & Recycling Division Business Plan and Rate Stabilization Update (Item 3)
- Steve Harriman presented an implementation plan following approval of Measure T (passed with 51.37% yes). Key changes:
- No net change in monthly rates through June 30, 2015 (last increase in 2010).
- Service changes: garbage (weekly, unchanged); recycling (switched from weekly to every-other-week); yard waste (citywide containerized weekly, replacing subscription-based loose-in-the-street); loose-in-the-street program reduced to November–January only; neighborhood cleanup (appointment-based bulky item pickup) reinstated for February–October; dump coupon program for additional disposal.
- Rate rebalancing to match costs (Prop 218 process): garbage rate unchanged but now funds neighborhood cleanup; recycling rate unchanged but service reduced; yard waste rate unchanged but now funds 3 months loose-in-the-street. Additional container rates reduced: recycling extra can from $5.13 to $1.76; yard waste extra can from $5.70 to $3.34. Overage charge for >5 cubic yards: $28.60 per additional 5 yards.
- Reserve: $14 million in FY13, projected to drop to $7.3 million by FY16 if rates remain flat. A rate increase likely needed after FY15; staff will bring rate scenarios in ~18 months. Commissioners discussed the trade-off between adding services and preserving reserves, the prudence of the 20% reserve target, and potential risks (fuel costs, bad debt, catastrophic events).
- Implementation: Phase 1 begins April 2013 (education, container delivery June, service starts July 1). Phase 2 (private streets, condos, etc.) after July 1. Prop 218 notice to be mailed December 21, 2012; public hearing scheduled for February 6, 2013 (special URAC meeting).
Key Outcomes
- Approved minutes of September 26, 2012.
- Received and filed the Rate Increase Revenue Accountability Plan Update and the Solid Waste & Recycling Division Business Plan Update.
- Next steps: City Council consideration of Solid Waste implementation plan on December 4, 2012; Prop 218 notice mailed December 21, 2012; special URAC public hearing on solid waste rates on February 6, 2013; water bond sale expected February 2013; rate assistance program begins January 2013.
Meeting Transcript
Christopher Buscher? Here Brown. Here. Here. Here. And just a couple of announcements. This meeting is being video streamed and can be viewed on the city's website or viewed later from the archive files. Please silence all cell phones and mobile devices. If you wish to speak tonight, please complete a speaker slip located at the back of the room and return it to me at any time. And should you need assisted listing devices, they are available from me upon request. Thank you. All right. Thank you, Petri. And our first item on the agenda, it's my pleasure to introduce our new commissioner, Christopher Butcher. And Christopher, if you wanted to say a few words about yourself or not. Whatever. I don't want to put you on the spot. Thank you. I'm really excited to be here. I sat in on my first from down there meeting last uh time in November and was extremely impressed both by the staff and by the commission, and I'm excited to be a part of it. I'm an environmental uh and my unuse attorney here in Sacramento in that capacity. I've worked on uh a number of different utility projects with different clients and become intrigued with these issues and look forward to putting on a different hat and continuing to work with them. So thank you. Well, we're glad to have you on board and uh we're impressed that you actually came and sat in on one of our meetings before being on the commission. So good to have you here. Next item on the agenda is a consent calendar. And uh I don't know if anyone has any comments on the consent calendar or if we want to uh offer up a motion. I'll motion to uh approve you. All right, do we have a second? All right, we have uh a motion to approve the minutes and a second. Uh all in favor? Say aye. Aye. All right. Anyone opposed? All right, the motion passes. Well, that's so that passes. And we're moving on to the first uh main item on the agenda, which is the rate increase revenue accountability plan update. And with that, uh Mr. Brent, I think we'll be presenting to us. Good evening, Chairman Brown and members of the commission. Dave Brent, director for the Department of Utilities, and I'm just gonna do a brief introduction and hand it over to the staff who's gonna provide updates and the staff you'll you'll hear from tonight, or are taking the lead on these on these topics they're gonna address tonight as part of our accountability plan. As you know, when when you recommended approval of our rate increase, you also recommended that we have an accountability plan. Council also approved that, so this is part of that, and we're doing quarterly reports to the rate advisory commission. Tonight we're gonna focus on on really three things. We're gonna give you an update on our financing plan uh on on going to the bond market and where we are with that. Susan Goodison will be briefing you on that. The second item we're gonna brief you on is our capital improvement program, Bill B. Safe, our engineering manager will talk about that. And then the third item is one that we took to council last week, and that is again the the rate advisory commission also requested that there be a rate assistance program developed with the general fund tax money increment that we would be generating with this rate increase.
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