Utilities Rate Advisory Commission Meeting - June 27, 2018

The Utilities Rate Advisory Commission met on June 27, 2018, at 5:30 PM in the Council Chambers at 915 I Street, Sacramento. The meeting was called to order at 5:43 PM with four members present (Ellis, Garcia, Thomas, Javist) and two absent (Biering, Day). The primary agenda item was a financial update from the Department of Utilities, presented by Ryan Pham, Business Services Manager. The commission also approved the minutes from the May 23, 2018 meeting. No public comments or member comments were made.

Consent Calendar

• Approval of Minutes for May 23, 2018: Moved by P. Anthony Thomas, seconded by Keith Ellis. The motion passed unanimously (4-0) with no abstentions. The minutes were approved as presented.

Public Comments & Testimony

• No public comments were offered.

Discussion Items

• Department of Utilities Financial Update (Item 2): Presented by Ryan Pham. The update covered the FY2017/18 year-end budget projection and the FY2018/19 adopted budget. Highlights included:
  • Revenues are tracking $2 million higher than budgeted due to the conclusion of the unbilled partial audit.
  • The department anticipates $1.7 million in operating expense savings.
  • The FY2018/19 water budget reflects a 10% rate increase and includes nine new positions focused on regulatory programs, infrastructure maintenance, and customer service.
  • The wastewater budget reflects a 9% rate increase with no new positions.
  • The storm drainage budget has no increase since 1996 and includes five new positions to support state-mandated trash capture, security master plan, generator maintenance, regulatory compliance, and emergency response.
  • The department continues to rely on reserves to balance the funds; reserves will be depleted unless a voter-approved measure is passed.
  • Staff provided a new dashboard showing fund balances and days of working capital. The department maintains the minimum 120 days of working capital.
  • The water fund has a robust balance (~$50 million, nearly a year of working capital) because the department borrows from the state revolving fund and does not begin repayment until after the accelerated water meter program finishes in 2020. The fund balance will later be drawn down for debt service.
  • The storm drainage fund balance is being preserved because expenditures are projected to exceed revenues by about $2 million in FY2019 until a drainage rate adjustment can be enacted.
  • In response to a commissioner's question, staff stated they are reluctant to give a date for a storm drainage ballot measure, but a tentative schedule exists; it is likely a couple of years out and will not be discussed publicly until after the next election.

Key Outcomes

• The commission unanimously approved the minutes from May 23, 2018.
• The commission received and filed the Department of Utilities Financial Update.
• Staff will continue to provide fund balance and working capital dashboards at future meetings.
• No further action was taken.

The meeting adjourned at 5:54 PM.