Utilities Rate Advisory Commission Meeting – February 10, 2016

The Utilities Rate Advisory Commission (URAC) continued a public hearing on the Department of Utilities' proposed four-year water and wastewater rate adjustments. Commissioners heard a staff presentation comparing the original accelerated meter program (4‑year) with an extended alternative (8‑year), received testimony from 17 members of the public, and ultimately voted to recommend the original rate proposal. A separate motion to explore expanding the Utility Rate Assistance Program (URAP) to cover renters and nonprofit organizations also passed.

Consent Calendar

• Approval of Minutes (January 27, 2016): The minutes were approved with a revision clarifying that the first motion at the January meeting was superseded by a substitute motion. The motion passed unanimously (6‑0).

Public Comments & Testimony

• Sandra Bauer called the proposed 9%–10% annual increases “extreme, excessive, and a burden on citizens.”
• Dennis Neufeld cited a specific example of a water‑main repair where a meter could have been installed but was not, arguing a lack of cost‑containment culture in the department.
• Craig Powell (ION Sacramento) presented data showing that deferring half the meter debt would save about $14 million per year in interest and that the department’s cost projections omitted future savings from delayed meter replacement.
• Rick Stevenson questioned the necessity of replacing backyard mains, citing public‑records evidence that leaks were not concentrated in old pipes.
• Erik Smitt (ION Sacramento) contrasted the department’s projected 4% annual cost increases with a 1.5% CPI over eight years, and said cost containment is lacking.
• Debra Desrosiers calculated that with flat rates, the city would lose $127 per meter per year under the accelerated program, and she questioned the lack of a sunset clause.
• Joshua Fogler (former DOU employee) raised concerns about fluoridation and potential lead leaching, referencing Flint, Michigan.
• Roxanne Fuentez warned that the combined rate increases (water, garbage, etc.) could push homeowners into poverty and increase homelessness.
• Andre Gauet asked about the life expectancy of meters (15–20 years) and whether future replacement costs were budgeted.
• Frank Slonek objected to fluoridation costs and questioned the department’s budget breakdown.
• John Hahn questioned the $28 million additional cost of the extended program, noting that only half the meter program would be deferred, and asked for better cash‑flow disclosure.
• Eric Rasmussen (Sacramento Association of Realtors) supported the original rate proposal, praising the department’s outreach and transparency.
• Steven Bourasa noted his own metered bill had not decreased and argued that the 40%+ increase was too high for many residents.
• Robin Corralejo said the commission had not fully disclosed that the increases also cover past mismanagement, pension debt, and backyard main replacements, and suggested borrowing at low interest rates instead.
• P. Anthony Thomas asked whether this would be the last increase and urged the commission to balance the city’s budget rather than burden ratepayers.
• DeAun Tollefson presented a comparative analysis of 30 metro areas, concluding that Sacramento’s combined water/wastewater/refuse bill was currently low, and that the proposed increases would bring it to a reasonable level; she also supported faster meter installation.
• Susan Gedestad argued that cramming the program into four years was unfair and that the city manager’s appearance amounted to lobbying; she also questioned the desire to move to a cash‑basis system.
• Charles Yarbrough said Sacramento was being punished for a state‑mandated meter law despite having a historical unlimited water supply, and that water was being sent to Southern California.
• Rick Castro advocated for tiered rates (variable charges) to encourage conservation and help low‑income users, noting that PG&E and SMUD use such structures.

Discussion Items

• Continuation of Public Hearing on Water and Wastewater Rate Adjustments:

  • Staff presented two scenarios: (1) the original proposal – 4‑year meter program (completion by 2020) with 10% annual water rate increases and 9% wastewater increases, using 266 million in debt; (2) an extended 8‑year meter program (completion by 2024) with 9% annual water increases for the first four years, but 10% increases in three of the next four years, plus 28 million in additional capital costs and greater interest‑rate risk.
  • City Manager John Shirey urged approval of the original plan, citing the need for water conservation, equitable billing, accountability, cost savings, and regulatory pressure. He noted that a letter from the State Water Resources Control Board chair expressed support for the city’s metering efforts.
  • Commission discussion included clarification of the $28 million cost increase ($9 million in soft costs, $19 million in inflation), and concerns about the minimal rate difference (1%) between the two scenarios. Commissioner Butcher proposed a middle‑ground approach (three years of 9% increases with a two‑year review), but this was not formally moved.
  • The public hearing was closed after the first vote.

• Utility Rate Assistance Program (URAP): Staff reported that written protests numbered 427 (below the 1% threshold), and that outreach efforts include a bill stuffer, partnership with SMUD to cross‑match customer databases, and a standard eligibility threshold of 200% of the federal poverty level.

Key Outcomes

• Motion 1 (Approve Four‑Year Rate Increases): Passed 4‑1‑1.

  • Yes: Brian Biering, Ryan McManus, Timothy Horner, Andrew Day
  • No: Carolyn Veal‑Hunter
  • Abstain: April Butcher
    The recommendation to the Mayor and City Council includes water rate increases of 10% per year for FY2017–FY2020 and wastewater increases of 9% per year for the same period.

• Motion 2 (Expand URAP Study): Passed unanimously (6‑0).

  • The motion recommends that the Mayor and City Council direct staff to report back on expanding the Utility Rate Assistance Program to cover renters and nonprofit organizations that house qualifying individuals, exploring models such as SMUD’s program.

• Public Hearing: Closed after the first motion.

• Next Steps: The commission’s recommendation will be forwarded to the City Council for final action. The commission also discussed improving web transparency and future public engagement, though no formal action was taken on those items.