Utilities Rate Advisory Commission Meeting - November 12, 2014

The Utilities Rate Advisory Commission (URAC) met on November 12, 2014, at 5:34 p.m. in Council Chambers, 915 I Street, Sacramento. Commissioners present: Kevin Schubert, Douglas Brown, Timothy Horner, Scott Brown, Carolyn Veal-Hunter. Absent: Christopher Butcher, Steven Archibald. The meeting covered approval of previous meeting minutes, a presentation on proposed three-year rate adjustments for recycling and solid waste services, and discussion on selecting a new chair and vice chair. The meeting adjourned at 7:10 p.m.

Consent Calendar

• Approved the minutes of October 22, 2014, with a correction noted for calendar dates (March 26, 2014 and December 10, 2014 were Thursdays instead of Wednesdays). Motion by Scott Brown, second by Carolyn Veal-Hunter. Vote: 4 yes, 0 no, 1 abstention (Horner).

Public Comments & Testimony

• Mr. Neufeld, representing Ion Sacramento, raised concerns about the rate calculations: suggested that recent drops in fuel costs should be recalculated to potentially lower proposed rates. Also warned about upcoming labor contract negotiations (Local 39) with potential 9% increases, which would impact pension costs, and urged the commission to contact the City Council.
• Don McNurney, resident of Sacramento, compared Sacramento's solid waste rates ($30/month) to West Sacramento's ($19.56/month) and questioned why Sacramento's rates are higher despite economies of scale. He suggested investigating the difference.

Discussion Items

• Proposed Three-Year Rate Adjustments for Recycling and Solid Waste Services: David Levine, Business Planning Manager, presented the proposal for a three-year rate cycle starting July 1, 2015. The presentation covered organizational overview, five-year fund summary, operational review, cost allocation methodologies, and the need for rate increases due to revenue shortfalls in recycling ($2.1M), yard waste ($1.0M), and garbage ($678K). The recommended rate adjustments: 2% in FY16, 3% in FY17, and 2% in FY18. For a typical single-family home, monthly rates would increase by $0.75 (32-gallon), $0.82 (64-gallon), and $0.91 (96-gallon) per year. Additional rate changes include: a $28.60 fee for each additional household junk pickup beyond the two included; a revised rate for oversized junk piles (beyond 5 cubic yards) at $28.60 per additional cubic yard; and a container exchange fee of $21 per exchange for two or more exchanges in a six-month period.
  • Commissioner Questions: Commissioners discussed fuel cost assumptions, labor and pension costs, the 60% drop in recyclable commodity values, landfill costs related to McKinley Village development, and the cost allocation model. Staff clarified that the rate model uses conservative assumptions and that the three-year cycle smooths rate increases. No action was taken; the item will proceed to a Prop 218 public hearing in February 2015.
• Selection of New Commission Chair and Vice Chair: Staff informed the commission about ongoing changes to the URAC ordinance that would redefine membership categories (single-family, multifamily, business, at-large). Recruitment for new members likely to open in January 2015. Commissioners agreed to defer the selection until the January meeting, pending resolution of membership appointments.

Key Outcomes

• Approved the October 22, 2014 minutes with a correction.
• Received and discussed the proposed three-year rate adjustments; no vote taken. Next steps: additional discussion possible in December, Prop 218 mailer, public hearing in February 2015, City Council adoption in March 2015.
• Deferred selection of chair and vice chair to a future meeting (likely January 2015) due to pending recruitment and ordinance changes.