Utilities Rate Advisory Commission Meeting Summary – December 11, 2019

The Utilities Rate Advisory Commission met on December 11, 2019, at 5:30 p.m. in Council Chambers. The commission approved previous meeting minutes and received a quarterly update from the Department of Utilities on accountability, finances, water conservation, and rate assistance programs.

Consent Calendar

• Approval of Minutes for September 25, 2019: The commission unanimously approved the minutes.

Discussion Items

• Department of Utilities Accountability Plan Update: Business Services Manager Ryan Pham presented the quarterly update. Key components:
  • Community Engagement: The Consumer Confidence Report was released ahead of schedule. Construction began on the Third Street sewer upgrade in October 2019. Staff participated in multiple summer and fall events (e.g., First Friday, Chalk It Up, POPs in the Park, High Water Jamboree, Water Discovery Day).
  • Finance: Water capital finance includes a $173.1 million state revolving fund loan at 1.7% (accelerated water meter program), $62.6 million Series 2017 bonds (100% expended), and $32 million Series 2019 bonds at 2.91% (of which $13.6 million expended and $85,587 encumbered as of June 30, 2019). All three utility funds (water, wastewater, storm drainage) are projected to meet the minimum 120 days of working capital.
• Director’s Report: Director Bill Busath responded to prior commissioner requests:
  • Rate Assistance Program (SURI): Enrollment stands at 8,500 customers (approximately 55% of eligible). An additional 300 customers are being enrolled. Staff are verifying about 5,000–6,000 SMUD program customers to improve accuracy.
  • Rebate and Leak Programs: For the third quarter of 2019, leak letters, investigations, and site visits were detailed. The Leak-Free Sacramento program completed 18 projects in disadvantaged communities, saving an estimated 9 million gallons annually. For calendar year 2019, total estimated water savings from rebate activities (turf replacement, smart controllers, toilets, etc.) is about 30 million gallons.
  • Water Loss: Total water loss is 8.3% of water produced (approximately 2.2 billion gallons annually). Most loss occurs before the meter; post-meter leaks are billed and not counted in this figure. The loss rate is below the industry average of ~10%.
  • Reserves: Staff are considering three additional reserves (capital, emergency, major equipment) beyond the existing operating capital reserve.
  • Benchmarking: A survey of 12 other utilities on rate assistance programs yielded responses from 5–6 agencies. Common eligibility is 200% of the federal poverty level. Staff plan to study a more sustainable assistance model (e.g., income-based percentage) and bring a recommendation to City Council by June 2020.
• Commissioner questions included: clarifying data on the finance slide (encumbered amount corrected), requesting written inclusion of working capital in future reports, exploring whether Leak-Free program assists leak letter recipients, and confirming that water loss excludes post-meter leaks.

Key Outcomes

• Approved the September 25, 2019 minutes.
• Received and filed the Department of Utilities Accountability Plan Quarterly Update.
• Director Busath committed to including days of working capital in the written report for future meetings.
• Staff will further investigate restructuring the rate assistance program and present a proposal to City Council by June 2020.

No public comments were made. The meeting adjourned without member comments or additional business.