Utilities Rate Advisory Commission Meeting - April 24, 2019

The Utilities Rate Advisory Commission (URAC) met on Wednesday, April 24, 2019, at 5:30 p.m. in the Council Chambers at 915 I Street. The meeting included approval of the consent calendar, a quarterly update on the Department of Utilities Accountability Plan, a director’s report, and discussion of upcoming solid waste rate setting. All six commissioners were present, and the chair opened with a reminder of the commission’s role.

Consent Calendar

• Item 1: The commission unanimously approved the minutes of the February 27, 2019 meeting. Motion by Melissa Lee, seconded, and passed 6-0.

Discussion Items

• Department of Utilities Accountability Plan Quarterly Update: Dan Sherry, Engineering Manager, presented the update covering community engagement (new drinking water quality website, water meter information packets, 9th Street project appreciation campaign), capital improvement financing (mix of cash and debt, $270.5 million for water, $57 million for wastewater, including a recent wastewater bond at 2.91% over 20 years), capital project dashboards, and updates on major projects:
  • Downtown combined sewer upsizing: All complete except 3rd Street (planned award in June 2019, construction through end of 2020).
  • McKinley Water Vault: 6-million-gallon below-ground storage, $28 million project, construction awarded to WM Lyles on April 23, 2019, with completion expected by end of 2021.
  • Drinking water reservoir at Bruceville and Imagination: 4 million gallons, two groundwater wells, treatment facility for manganese and methane, completion expected in May 2019, with testing and permitting over the following six months.
  • Accelerated Water Meter Program: 91% metered (over 120,000 meters installed), 30 miles of pipeline replaced, project cost $244 million (1% over budget but within contingency), 26.5% local hire (goal 20%), average response time to calls 22 hours (target <48 hours), average complaint resolution 4.6 days (target <7 days), average time to activate billing 38.3 days (target <90 days). Final bid package to be awarded in June 2019, with full completion by mid-2021.
• Director’s Update: Bill Busath, Utilities Director, reported on the Utility Rate Assistance Program (over 7,700 participants, $1.1 million spent through Q2, budget $2.6 million for FY18-19) and sustainability/conservation efforts including rebates for smart controllers (nearly 850 sold in FY19), transition from enforcement to education, and leak notification program. Water conservation trends showed increases in river-friendly landscape applications, turf replacement, irrigation rebates, and smart controller adoption.
• Commissioner Questions and Discussion:
  • Commissioner Brian Geary requested regular reporting of fund balances and operating reserves (target 120 days). Staff committed to provide fund balance information and a comprehensive budget picture at the next meeting.
  • Commissioner Geary asked about timing of future rate changes. Busath indicated a drainage rate adjustment is tentatively planned for 2020-2021 (now delayed by a year), and the last water/wastewater rate adjustment in the current series occurs July 1, 2019, with a planned lull of at least a year before any new rate proposal. The impact of metered billing on revenues will be analyzed.
  • Commissioner Anthony Thomas asked about the nature of complaints; staff noted they are minor (e.g., meter box settling) and handled quickly.
  • Chair April Javist clarified terminology ("paygo" means cash financing, "package" refers to bid packages of multiple projects). She noted McKinley Vault awarded to WM Lyles under alternative bidding.
  • Chair Javist expressed concern about the decline in rate assistance program enrollment (from 9,000) and asked about potential protections during billing system upgrade. Staff acknowledged the issue and said they would monitor.
  • Commissioner Megan Fidel asked about the solid waste rate setting calendar. Staff outlined: special URAC meeting on May 8, 2019, to review solid waste rate proposals; a June meeting for further review and 218 notice language; August public hearing; then City Council approval before implementation on January 1, 2020.
  • Commissioner Fidel also requested inviting the Product Stewardship Council and learning from Berkeley’s zero waste rate structure. The commission agreed to invite Doug Cobald (executive director) to the May 8 meeting for a 20-minute presentation, with staff facilitating coordination.

Key Outcomes

• The commission unanimously approved the February 27, 2019 meeting minutes.
• Staff will provide fund balance and operating reserve information at the next meeting and a full budget picture after adoption.
• A special URAC meeting is scheduled for May 8, 2019, at 6 p.m. to begin solid waste rate review; agenda to be posted by May 3.
• The commission agreed to invite the Product Stewardship Council representative to the May 8 meeting to present on rate structure innovations.
• The drainage rate adjustment is postponed to early 2021, with a new schedule to be discussed at a future meeting.
• No public comments were made on matters not on the agenda.