Utilities Rate Advisory Commission Meeting - April 27, 2016

The Sacramento Utilities Rate Advisory Commission (URAC) met on Wednesday, April 27, 2016, at 5:30 p.m. in the Council Chambers at 915 I Street. The meeting covered approval of the February 10, 2016 minutes and a detailed update from the Department of Utilities on its quarterly accountability plan, including community engagement, bond expenditures, capital improvement programs, rate proposal updates, and drought/water conservation efforts. The commission also discussed the Rate Assistance Program, the meter acceleration program, and future stewardship initiatives. The meeting adjourned at 6:10 p.m.

Consent Calendar

• The commission unanimously approved the minutes from the February 10, 2016 meeting (motion by April Butcher, seconded by Brian Biering; all six present members voted yes).

Discussion Items

• Department of Utilities Accountability Plan Update (Receive and file)
  • Director Bill Busath presented the quarterly update. Key elements included:
    • Community Engagement: The department focused outreach on neighborhood association meetings, which were deemed more effective than previous council-member-led meetings. The department intends to make annual visits to neighborhood associations moving forward. Outreach also included a website hub, non-English speaking communities via radio and publications, and a Prop 218 notification mailer.
    • Bond Expenditures: For water bonds, the department met the 85% spending threshold within the required three-year period; all water bond funds are expected to be spent by the end of calendar year 2016. The wastewater program must meet the 85% threshold by the end of June 2016, and staff expressed confidence in meeting that goal.
    • Rate Proposal Update: On March 29, 2016, the City Council approved the URAC recommendation for 10% water and 9% wastewater rate increases. The council also approved including nonprofits that provide housing in the rate assistance program, but did not move forward with a recommendation regarding tenants because tenants are not typically direct customers; the city could not verify that assistance to landlords would benefit tenants.
    • Rate Assistance Program: The department entered into an agreement with SMUD and cross-referenced its rate assistance database. Approximately 10,000 additional customers have been identified as potentially eligible, compared to the current 1,700 enrolled. The draft strategy is to automatically enroll these customers with an option to opt out. Staff confirmed adequate funding is available within the existing 1% set-aside for the estimated 10,000 new participants; cost estimates and funding for the nonprofit housing component are still being developed.
    • Meter Acceleration Program: The department aims to be 100% metered by the end of 2020. Key guiding principles include timely delivery, minimizing resident impacts, and cost efficiency. To reduce gas line hits (currently occurring at a rate of about 0.1% of excavation opportunities), staff are working on specification changes, contractor training, and a "gold shovel" certification program with PG&E.
    • Stewardship Initiative (FY17-20): Staff described an initiative to deliver the capital program at or under budget, reduce debt costs, and improve asset management, with the goal of reducing the need for future rate increases.

Public Comments & Testimony

• No public comments were made during the meeting.

Member Comments & Questions

• Commissioner McManus asked for future dashboard reports to include subtotals and totals for project categories, and to clearly state the time frame (e.g., fiscal year or calendar year) in the dashboard titles. He also encouraged tracking and publicly reporting gas line hits to show progress over time.
• Commissioner Butcher praised the SMUD cross-referencing effort as a major step and asked for clarification on why actual meter project spending exceeded estimates by more than 10%; staff explained that cost savings from the water treatment plant allowed them to accelerate the meter program, delivering more meters (21,000 vs. 18,000 anticipated) and more miles of pipe, while also achieving some efficiencies. She also asked about funding for the expanded rate assistance program—staff confirmed current funding is adequate.

Key Outcomes

• The commission unanimously approved the Consent Calendar.
• The commission received and filed the Department of Utilities Accountability Plan update.
• The commission directed staff to improve dashboard reporting by adding subtotals/totals and including time frames in titles.
• Staff committed to tracking and publicly reporting gas line hit metrics, and to continue developing the stewardship initiative and rate assistance expansion.