Sacramento Utilities Rate Advisory Commission Meeting – November 9, 2016

The Utilities Rate Advisory Commission (URAC) of Sacramento, California, met on Wednesday, November 9, 2016, from 5:36 p.m. to 6:29 p.m. in the City Hall Council Chamber, 915 I Street, 1st Floor. Chair Timothy Horner presided, with Vice-Chair April Javist and Commissioners Keith Ellis and Andrew Day present; Commissioners Brian Biering and Ryan McManus were absent. Staff present included Erin Treadwell (Department of Public Works), Joe Robinson (Senior Deputy City Attorney), Patrick Sanger (Department of Utilities), Bill Busath (Utilities Director), Michael Malone (Operations Manager), Susan Goodison (Business Services Manager), and Terrance Davis (Integrated Waste General Manager). The meeting covered consent calendar approval, the 2017 meeting calendar, a Department of Utilities Accountability Plan update, and a Recycling and Solid Waste Report. All votes were unanimous among the four commissioners present.

Consent Calendar

• Approval of Minutes for September 28, 2016 – The commission approved the minutes of its September 28, 2016 meeting as presented. Action: Motion by April Javist, seconded by Keith Ellis; passed unanimously (4 yes votes; 2 absent).

Discussion Items

• 2017 URAC Meeting Calendar – Erin Treadwell presented the proposed 2017 calendar. She noted that the commission reserves the Council Chamber for the fourth Wednesday of every month, except November and December, when meetings are held on the second Wednesday due to holidays. Commissioner Andrew Day stated the schedule matched expectations. Action: Motion by April Javist, seconded by Keith Ellis; passed unanimously (4 yes votes; 2 absent).
• Department of Utilities Accountability Plan Update – Bill Busath, Michael Malone, and Susan Goodison provided an oral update. Malone highlighted the department's new "Always Working" branding and outreach campaign featuring DOU employees (e.g., ads on Sacramento RT buses and in the Sacramento Bee). The Utility Rate Assistance Program (URAP) had grown enrollment from roughly 1,700 to 9,114 customers through a partnership with SMUD, with 5 more nonprofits enrolled in October 2016. Watershed conservation remained at Stage 2 water shortage with a 20% reduction goal benchmarked against 2013 levels; the city achieved about a 25% water-use reduction for the calendar year. Storm drainage outreach is being launched because current revenues barely meet operational needs and cannot support a CIP program; the fund needs a rate adjustment, which would require voter approval. The department hired Corrilos engineers to study alternative rate structures for water and wastewater (including tiered rates, drought surcharges, and master-meter billing), aiming to begin the Proposition 218 process in late 2017 or early 2018. Goodison reported that the city's first-ever water and wastewater revenue bonds (issued in 2013) had been materially expended: $234.7 million of $239.5 million in water project funds and $28.6 million of $30 million in wastewater project funds spent as of November 1, 2016, meeting federal requirements to spend 85% of bond proceeds within three years.
• Recycling and Solid Waste Report – Terrance Davis presented a high-level overview of the Recycling and Solid Waste Division. The division has 163 employees and collects about 120,000 tons of garbage annually; last fiscal year (FY2015-16) disposal costs were about $7.2 million out of a $60 million budget, with a $3 million fund deficit (slightly above the ~$2.6-2.7 million deficit projected when the three-year rates were approved). Green waste tonnage was 64,000 tons, and recycling tonnage has been flat since the switch to biweekly recycling. Key cost drivers included disposal ($9.7 million), vehicle maintenance (up $1.8 million due in part to three vehicle fires and older fleet assets), and overtime (which was at its best-ever low level). The capital outlay is roughly $10 million, including a $5.5 million vehicle replacement program on a seven-year cycle and $1 million for container replacements. The division tracked key performance metrics: recycling contamination fell from 31% in 2011 to 18% in the most recent characterization (2017), and illegal dumping reports rose about 14% while average pickup time was under 2 days, exceeding the 72-hour service level. Davis outlined a roadmap for a potential rate adjustment: a detailed workshop in February 2017, a preliminary forecast in summer 2017, finalization in fall 2017, a 218 process in winter 2017, a public hearing in February 2018, City Council recommendations in March 2018, and an effective date of July 1, 2018.

Key Outcomes

• Consent Calendar: Approved minutes for September 28, 2016 (4-0, 2 absent).
• 2017 Meeting Calendar: Approved with no changes (4-0, 2 absent).
• Accountability Plan Update: Received and filed by staff; commission directed staff to provide a reminder before City Council appearances on the storm drainage rate adjustment and to bring updated URAP application materials to the next meeting.
• Recycling and Solid Waste Report: Received and filed; staff agreed to provide more detailed breakdowns of disposal costs, vehicle maintenance costs, and to add labor as a cost driver in the February 2017 workshop presentation.
• Public Comments: No members of the public provided comments during the meeting.
• Adjournment: Meeting adjourned at 6:29 p.m.