Utilities Rate Advisory Commission Meeting - September 28, 2016

The Utilities Rate Advisory Commission (URAC) met on Wednesday, September 28, 2016, at 5:39 p.m. (the agenda listed 5:30 p.m., but the transcript indicates a late start due to roll call). The meeting was held in the Council Chambers at 915 I Street, 1st Floor, Sacramento. Commissioners present included Keith Ellis, Brian Biering, Brian McManus, April Butcher, Andrew Day, Robert Carlson, and Timothy Horner (arrived late). The commission approved the consent calendar, introduced a new member, received updates on the Department of Utilities Accountability Plan and financial status, and elected a new Chair and Vice Chair.

Consent Calendar

• Approval of Minutes for May 25, 2016: The commission unanimously approved the minutes from the May 25, 2016 meeting. The motion was moved by Commissioner Butcher and seconded by Commissioner McManus, with all present members voting yes.

Discussion Items

• Introduction of New Commissioner: Keith Ellis was introduced as a new commission member. He stated he joined the commission to become civically engaged after moving to Sacramento, noting he is a renter who indirectly pays utility rates.
• Department of Utilities Accountability Plan Update (presented by Dan Sherry, Engineering Division Manager, in place of Director Bill Busath):
  • Utility Rate Assistance Program: Enrollment had grown to 9,015 customers, an increase of 7,400 since April 2016. An estimated 17,000 customers are eligible. The program has a $3 million budget, with $834,000 spent (including $700,000 in rate discounts). The city leveraged SMUD’s energy rate assistance database for auto-enrollment. A $87,000 contract with Crocker & Crocker was approved for outreach targeting seniors and multi-language communities. The five nonprofits already enrolled (via SMUD) are Loaves & Fishes, AIDS Housing Alliance, Preservation Greenfield, Volunteers of America, and TLCS. Commissioner McManus requested a list of nonprofits and suggested connecting with Life Steps, a wraparound services group for affordable housing.
  • Water Conservation: The city maintained a Stage 2 water shortage declaration with a 20% conservation goal. Precipitation in 2016 was 117% of average. Emergency regulations continue through December 2016, with potential new permanent conservation regulations in November. The accelerated meter program aims to complete universal metering by 2020. A new outreach campaign, “River to Tap,” will emphasize water value and efficiency.
  • Water Quality: The city meets all state and federal requirements. The Public Health Goal report was presented to council in June 2016, and the annual Consumer Confidence Report is available on the city website. No treatment changes are required, but new technologies are monitored.
  • Commissioner Day asked about the Crocker & Crocker contract cost ($87,000). Commissioner McManus requested future updates include infrastructure improvement metrics (e.g., pipe replacement progress) to demonstrate rate increase benefits.
• Department of Utilities Financial Update (presented by Daniel Cho, Supervising Financial Analyst, with Susan Goodison, Business Services Manager):
  • Water Fund: FY17 adopted budget includes a 10% rate increase approved in March 2016, generating $9.1 million in additional revenue. Assuming 20% conservation, revenue is reduced by $6 million. $8.2 million in pay-go capital improvement projects (CIP) supports the residential meter installation program. The net addition to fund balance is $5.1 million (excluding new debt to be issued).
  • Wastewater Fund: A 9% rate increase adds $2.7 million in revenue. The budget includes $9.2 million in pay-go CIP, with a $3.9 million draw from fund balance. Conservation does not materially impact wastewater revenue.
  • Storm Drainage Fund: No rate increase has occurred since 1996. The budget is conservative, with no dedicated CIP. The fund is not sustainable long-term. The department plans to partner with a consultant (starting November 2016) to develop an education and outreach program for the public and stakeholders. The schedule for a potential rate adjustment vote is to be determined in coordination with the new city leadership.
  • Commissioner Biering asked about the timeline for a drainage rate ballot measure; staff replied it is TBD. Commissioner McManus clarified that wastewater revenue is not significantly affected by conservation.
  • Commissioner Butcher requested an update on garbage and recycling financials; staff indicated an update is likely at the next meeting or early 2017 due to recent leadership transitions.
• Selection of New Commission Chair and Vice Chair:
  • Chair: Timothy Horner was nominated by Commissioner McManus and seconded by Commissioner Biering. He expressed willingness to serve, noting his four years on the commission and his background teaching hydrogeology at Sacramento State. The motion passed unanimously (all present members voted yes).
  • Vice Chair: April Butcher was nominated by Commissioner McManus and seconded by Commissioner Biering. She stated she has served two years and is interested in community engagement. The motion passed unanimously.

Key Outcomes

• Approved the minutes of May 25, 2016 (unanimous).
• Elected Timothy Horner as Chair and April Butcher as Vice Chair (both unanimous).
• Received and filed the Department of Utilities Accountability Plan Update and Financial Update (no formal vote required per agenda recommendation).
• Next steps: Staff will follow up on the list of nonprofits enrolled in the rate assistance program, incorporate infrastructure improvement metrics into future reports, and develop a drainage system education program with a consultant. An update on garbage and recycling finances is expected soon.